Since 1 January 2026 an important change came into force for all employers: the old paper-based procedure for reporting contributions to private health and private care insurance was replaced by a completely electronic data exchange procedure. The aim of this transition is to simplify the processes involved with payroll deduction, reduce sources of error and make the tax treatment of premiums for privately insured employees more efficient and legally certain.
What exactly is changing?
Until now employers had to record the contribution information of their employees that were privately insured from paper forms and enter it in the payroll statement manually. From 2026 this step will completely be replaced. Instead, private insurance companies will now report the relevant information directly to the Federal Central Tax Office (BZSt).
The sent data will be integrated by them into the Electronic Wage Tax Deduction Data (ELStAM). Employers will receive the information in an automated way through their payroll software and are obliged to accept the reported figures. Adjusting contribution data at the employee’s request is not permitted. Corrections may only be made by the insurance company as part of the data exchange procedure.
The annual wage tax certification is also being modified: the fixed pension amount will no longer shown. In future, the contributions for the last payroll period will be presented in new fields instead.
Benefits and potential challenges of the new procedure
Automated data transmission means manual recording of contribution figures will be replaced. This considerably reduces the administrative burden on personnel departments and payroll accountants and at the same time minimizes the risk of entry errors. Changes in contributions are quickly provided via ELStAM so the pay slip is always based on current and final data. This procedure also contributes to a calculation of the tax-free employer’s allowances and premiums for private insurance that is legally compliant.
At the same time the new procedure is heavily dependent on technical implementation running without errors. 2026 and 2027 will therefore be considered as a transition period. If technical problems occur during this phase, employers may continue to use paper forms. But as soon as electronic submission has worked, these replacement forms will lose their validity.
It should also be noted that special cases, such as foreign insurance companies or institutions not participating in the procedure, may make it necessary to continue using the manual processes.
What should employers do now?
Employers should firstly ensure that the payroll software they use supports the new requirements of electronic data exchange. It is also recommended to modify internal processes and to inform privately insured employees of the changes in a timely manner.
As per our experience, it was already possible to identify errors after checking the first batch of electronic data received. We therefore recommend continuing to request paper forms at the turn of the year as well and comparing them with the contribution information received electronically. In this way potential errors can be quickly identified.
It is also particularly important to note that the contribution figures sent are final and that the employee cannot have them changed on request. If data is incorrect, the insured person must inform the private insurance company, which is obliged to correct the figures and resend them.
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Michael Schäfer Michael Schäfer has specialized in all aspects of employee taxation for over 15 years. His main focus is on payroll services for companies across nearly all industries and sizes — both nationally and internationally and across multiple jurisdictions (multi-country payroll).View Profile -
Sophie Römer Sophie Römer is a Payroll Manager and onboarding expert at Grant Thornton in Leipzig. She has been part of the company since 2016 and has many years of experience in payroll using DATEV.View Profile