Sick pay in Germany: Entgeltfortzahlung im Krankheitsfall, Krankengeld, and the U1 refund

An employee in Germany who is too ill to work keeps 100% of their pay from the employer for up to six weeks per illness. That obligation is Entgeltfortzahlung im Krankheitsfall (continued pay during illness). From the 43rd day, the employee's health insurer (Krankenkasse) pays Krankengeld (sickness benefit) instead. Employers with up to 30 staff recover part of the six weeks' pay through the U1 Umlage, a levy-funded refund scheme. Each long illness gives the payroll team three jobs: count the six weeks, hand the employee over to the insurer on time, and claim the refund.

Entgeltfortzahlung im Krankheitsfall: six weeks of full pay from the employer

The Entgeltfortzahlungsgesetz (EFZG, the Continued Remuneration Act) gives an employee who cannot work because of an illness they did not cause up to six weeks of continued pay, counted as 42 calendar days (EFZG §3(1)). The right starts after four weeks of uninterrupted employment (§3(3)). If a new hire falls ill in the first four weeks and stays ill, the six weeks start at the beginning of week five.

The amount is the full pay for the employee's regular working hours, not a reduced sick rate (§4(1)). Overtime pay and expense allowances are excluded (§4(1a)). If the employee worked part of the first day of illness, the count starts the next day; otherwise that day is day one.

Same illness or new illness: when the six weeks start again

• A new, unrelated illness after the first one has ended starts a new six weeks.
• A second illness that begins during the first does not extend the period: 42 days in total cover both.
• A return of the same illness counts against the same 42 days. An employee off for 22 days with a back condition in March and again with it in May has 20 days of continued pay left. The six weeks restart only after at least six months without an absence for that illness, or 12 months after the first absence for it began (§3(1), second sentence).

The employer receives dates, not diagnoses, so to check earlier absences it sends the employee's Krankenkasse a prior-illness enquiry (Vorerkrankungsanfrage) through the electronic data exchange, and the insurer answers whether each earlier absence counts.

The eAU: the employer retrieves the sick note from the insurer

The employee must report the illness and its expected length immediately. If the illness lasts more than three calendar days, a doctor must confirm it by the following working day, and the employer may require that confirmation sooner (§5(1)).

Since 1 January 2023, for employees in statutory health insurance, the doctor sends the incapacity data to the Krankenkasse. The employer must retrieve the electronic certificate (elektronische Arbeitsunfähigkeitsbescheinigung, eAU) through certified payroll software or the SV-Meldeportal, the social insurers' online reporting portal. The eAU shows the dates of the incapacity, the date of the doctor's finding, whether it is a first or follow-up certificate, and whether an accident may be involved (Social Code Book IV, SGB IV §109). The employer may request the eAU only after the employee has reported the illness. Paper certificates are still used for privately insured employees, for minijobbers (marginal, low-paid employees) in private households, and when the doctor is outside the statutory system, including doctors abroad.

From day 43: Krankengeld from the Krankenkasse

Krankengeld is 70% of the employee's regular gross pay, capped at 90% of net pay (Social Code Book V, SGB V §47). The benefit is paid per calendar day, and a full month counts as 30 days. Pay above the 2026 health contribution ceiling of €5,812.50 a month is ignored, which sets a maximum of €135.63 a day. On a €3,500 monthly salary, 70% of the daily €116.67 is €81.67, before the 90%-of-net cap. Pension, unemployment, and long-term-care contributions are deducted from the Krankengeld.

Krankengeld is paid for up to 78 weeks within three years for the same illness (§48). The six weeks of continued pay count toward them, so the insurer pays for at most 72 weeks.

As soon as it is clear the six weeks will end, the employer sends the Krankenkasse an electronic pay certificate (Entgeltbescheinigung) so the insurer can calculate the benefit, without waiting for the next payroll date. The employer stops the salary and, if a full calendar month passes without pay, files an interruption notice (Unterbrechungsmeldung, reason code 51). Since January 2026, the Krankenkasse reports the start and end of Krankengeld to the employer automatically.

The U1 Umlage: how employers with up to 30 staff recover sick pay

Under the Aufwendungsausgleichsgesetz (AAG, the Employer Expenses Compensation Act), the Krankenkassen reimburse smaller employers 80% of continued pay and 80% of the employer's social-security contributions on that pay (AAG §1(1)). Each Krankenkasse may lower the refund in its statute (its own rules) and offer several reimbursement levels, none below 40% (§9(2)). The employer picks a level, and a higher refund costs a higher levy. Two insurers' published 2026 schedules are dated examples of the spread; each Krankenkasse sets and revises its own:

• BARMER (2026): 50% for a 1.90% levy, 65% for 2.50%, 80% for 4.00%, with no refund of the employer's contributions.
• DAK-Gesundheit (2026): 50%, 60%, 70%, and 80% for levies of 1.3%, 1.9%, 2.4%, and 3.9% from January to August, reduced to 0.8%, 1.0%, 1.3%, and 1.8% from September.

The employer alone pays the levy, as a percentage of each employee's pay subject to pension contributions, up to the 2026 pension contribution ceiling of €8,450 a month and excluding one-off payments (§7). The levy goes to each employee's own Krankenkasse, which also pays the refund (§2(1)), so staff spread across five Krankenkassen mean five sets of rates and five reimbursement choices. For minijobbers, the Minijob-Zentrale (the minijob collection agency) charges a fixed 0.8%.

An employer qualifies for a calendar year if it employed no more than 30 people for at least eight months of the previous year (§3(1)). Apprentices and severely disabled employees are not counted. Part-timers count as 0.25 (up to 10 hours a week), 0.5 (up to 20), or 0.75 (up to 30). The employer claims the refund electronically once the sick pay has been paid (§2).

Worked example: six weeks of sick pay and the U1 refund on €3,500

A company with 12 employees pays one employee €3,500 a month. Her Krankenkasse is DAK-Gesundheit, and the company uses its 70% U1 level, at 2.4% from January to August 2026.

1. Levy. The levy is 2.4% of whatever pay she receives: 2.4% × €3,500 = €84 on a full month, and €33.60 on July's €1,400 of continued pay. No levy is due for months paid only by Krankengeld. From September 2026 the rate for this level is 1.3% (€45.50 a month).
2. Illness. She falls ill on Monday 1 June 2026 before starting work, so day one counts, and stays ill through August.
3. Continued pay. The 42 days cover 1 June to 12 July. June is paid in full at €3,500; 1 to 12 July, pro-rated at 12/30 for illustration, is €1,400. The six weeks cost €4,900 in gross pay, subject to the usual tax and social-security contributions.
4. Handover. From Monday 13 July she receives Krankengeld. The employer pays no salary for 13 to 31 July, sends the Entgeltbescheinigung, and files an Unterbrechungsmeldung because August passes without pay.
5. Refund. The Krankenkasse refunds 70% × €4,900 = €3,430. The employer's own cost of the six weeks' gross pay is €4,900 − €3,430 = €1,470. The employer's contributions on the €4,900 are an additional cost, refunded at the same share only if the insurer's statute covers them (BARMER's does not). At an 80% level the refund would be €3,920; at 50%, €2,450.

Summary

German employers pay full salary for the first 42 days of each illness once an employee has four weeks of service. A returning illness restarts the six weeks only after six months free of it or 12 months from its first onset. From day 43 the insurer pays Krankengeld: 70% of gross, capped at 90% of net and at €135.63 a day in 2026, for up to 78 weeks including the employer's six. Employers with up to 30 staff recover 40% to 80% of the sick pay through U1, at a levy each Krankenkasse sets per reimbursement level.

U1 rates can change during the year: DAK-Gesundheit cut its rates from September 2026. Flux helps payroll teams keep track of these rules, so the firm running payroll can tell its client how much the Krankenkasse will refund.