A sweeping reform of Germany’s mini-job system is set to eliminate the long-standing opt-out option for low-wage earners, forcing nearly all of the country’s 6.8 million marginal employees into the statutory pension insurance scheme. The changes, proposed by the government’s pension commission, mark one of the most significant shifts in the country’s labor market since the Hartz reforms.
Under current rules, mini-jobbers — those earning up to €603 per month since January 2026 — can apply for an exemption from pension contributions. Data from the first quarter of 2026 shows that roughly 79.1 percent of those eligible have taken that route. The commission now wants to scrap that freedom of choice entirely.
Going forward, only school pupils would be exempt. Every other mini-job holder would be required to pay into the pension system. At the same time, the flat-rate tax for employers would rise from 2 to 5 percent. Lawmakers are also discussing whether to introduce a long-term care insurance contribution.
Chancellor Merz has made clear that the government has no plans to abolish mini-jobs outright. Since July 1, 2026, employees have been allowed to cancel their existing exemption once — irrevocably and effective from the following month.
What It Means for Workers
Take a typical case: someone earning €603 a month in a commercial sector mini-job would pay €21.71 out of pocket — equivalent to 3.6 percent of their wage. In the private household sector, the employee share jumps to 13.6 percent. In return, their annual pension entitlement would rise by roughly €5.68.
The impact will be felt most acutely in labor-intensive industries. The retail sector employs around 1.04 million mini-jobbers, the hospitality industry 872,900, and the broader services sector 774,400. In Thuringia alone, the state social ministry counts roughly 124,000 marginal workers — 27,000 of whom are of retirement age.
For people already receiving a disability pension, the new rules could create hardship. Experts point out that mandatory contributions from a mini-job generally do not increase the current disability pension payout. They do, however, improve future claims for a standard old-age pension.
Employers Warn of €40 Billion Hit
Business groups are sounding the alarm. BDA president Dulger warned on July 24 and 25 that the reform could saddle companies with an extra €40 billion in annual costs. He argued that scrapping the tax and social security exemptions is misguided, since mini-jobs do not displace regular employment.
Thuringia’s CDU parliamentary leader Bühl fears the changes could push work into the shadows. He warned that if the barriers become too high, more people will turn to undeclared labor. State social minister Schenk, by contrast, welcomed the initiative as a necessary step to combat old-age poverty. The DEHOGA hospitality association is also demanding corrections.
Part of a Broader Pension Overhaul
The mini-job reform is just one piece of a much larger pension package. From 2028, the government plans to introduce a capital-funded pension: 2 percent of gross wages as an additional contribution, split evenly between employers and employees. The BDA estimates that the total contribution rate could climb from 18.6 to 22 percent within five years.
Other commission proposals include:
- A gradual increase of the retirement age to 67.5 by 2041
- Abolishing the penalty-free early retirement option after 45 contribution years
- Ending the block-model form of phased retirement
The government intends to adopt most of these proposals. Unions are already mobilizing against them. The DGB has announced a national day of action in September to protest the looming financial burdens.
