German companies pay record 85.6 billion euros in sick pay

German companies paid a record 85.6 billion euros for continued wage payments during employee sickness last year, according to a study by the German Institute of Economic Research (IW). This figure represents more than a doubling of nominal costs over the past 15 years, up from 81.2 billion euros in 2024.

The total amount includes approximately 72.5 billion euros in gross wages as reported by the Federal Ministry of Labour and Social Affairs, plus an estimated 13.1 billion euros in employer social security contributions. The IW attributes the rise to several factors, including higher wages, increased employment levels, and a higher rate of sick leave.

While statistical sick leave rates have risen significantly since the introduction of electronic certificates in 2022, it remains unclear if actual workplace absences have increased at the same rate. The rising costs highlight a tension between social protection systems that prevent income loss for workers and the direct economic burden placed on businesses, particularly those with limited capacity to absorb staff absences.