The U1 and U2 pay-as-you-earn system within the statutory health insurance system ensures that the financial burdens of a company due to illness or maternity leave are cushioned. It is a mandatory inter-company compensation process for employers.
The topic briefly explained by Luke Lohnexperte:
Overview of the U1 and U2 pay-as-you-go system
Employers pay a monthly % rate of the employee's gross amount subject to pension insurance to the health insurance fund, and the fund then steps in if the employer must continue to pay wages. The employer must carry out the equalization procedure via the health insurance fund as the responsible collection agency, with which the respective employee is insured or to which pension and unemployment insurance contributions are deducted.
Pay-as-you-earn system for continued payment of wages in the event of illness (U1)
The employer uses the U1 apportionment to protect itself against excessive costs in the event of continued payment of wages to employees in the event of sickness. The pay-as-you-go system is therefore intended to prevent smaller companies from being overburdened financially.
All companies that regularly employ no more than 30 employees take part in this apportionment procedure. With our apportionment calculator you can easily check whether you participate in the U1 compensation procedure.
Some groups of persons are not taken into account when determining the number of employees:
– Trainees and interns – Severely disabled persons – Recipients of early retirement benefits – Employees who are family members of a farm – Military and civilian service – Home workers – Employees in the release phase of partial retirement
Part-time employees are credited proportionally:
Since 2006, the amount of the levy has been based on the income of all employees in a company. Each employer pays a contribution rate specific to the health insurance fund and receives a certain percentage of the continued payment of wages made in the event of illness again. The amount of the reimbursement rate depends on the apportionment rate of the respective health insurance company chosen by the employer.
Contribution rate U1 Reimbursement rate Reduced 50 % General 60 to 65 % Increased up to 80
Depending on the employer's wishes, the health insurance funds reimburse up to 80 percent of the legally required continued payment of wages during the first six weeks of illness (42 calendar days).
At the beginning of a calendar year, each employer must check whether the employer expenses for incapacity for work are fulfilled. The health insurance funds provide worksheets for determining the apportionment obligation U1 for the respective calendar year. An employee is entitled to continued payment of remuneration only after 4 weeks of uninterrupted employment. The U1 levy is only payable if the employment relationship lasts more than four weeks.
Then there is an entitlement to continued payment of wages in the event of illness for six weeks. The six-week period begins with the day after the start of the incapacity for work. However, if the incapacity to work occurs on a working day before the start of work, this day is included in the calculation.
If an employee falls ill during a working day, the remuneration to be paid for the remaining day is not reimbursed by the continued payment of remuneration. The reimbursement period always starts with the first completely lost working day.
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Who is excluded from the U1 levy obligation??
– Lander – municipalities – associations of municipalities, associations of municipalities and municipal companies – federal government – family members working in an agricultural company – participants in voluntary service – umbrella organizations of the voluntary welfare sector – companies bound by collective agreements of the public sector – companies that regulate the compensation procedure themselves (voluntary compensation procedure) – foreign seasonal employees
Reimbursement U1
Employer expenses for continued payment of wages in the event of illness are reimbursed.
Reimbursement is based on gross pay.
The amount of the employer's expenses for continued payment of remuneration in the event of illness is determined by §4 Para. 1 EFZG according to the loss of earnings principle. The employee thus receives continued payment in excess of the remuneration to which he or she is entitled for the regular working hours applicable to him or her.
→ this includes the full remuneration including supplements
According to §1 AAG, the health insurance funds must reimburse employers for up to 80 percent of the continued remuneration, including the social security contributions attributable to the continued remuneration (to be borne by the employers).
Social security contributions:
– Employer's share of contributions to the Federal Employment Agency – Employer's share of contributions to statutory health and pension insurance – Employer's share of contributions to social long-term care insurance – Employer's share in the case of exemption from pension insurance (§172 para. 2 SGB VI) – contribution subsidies for health insurance for voluntary members of the statutory health insurance and privately insured persons according to §257 SGB V – contribution subsidies for nursing care insurance for voluntary members of the statutory health insurance and privately insured persons according to §61 SGB XI
According to §9 Abs. 2 AAG, the statutes of the health insurance fund may determine the amount of reimbursement pursuant to §1 para. 1 AAG limit and provide for different reimbursement rates.
Pay-as-you-go maternity scheme (U2)
The U2 levy is a procedure for employers to compensate for financial burdens arising from maternity leave. This apportionment procedure applies to all employers. The employer pays a currently applicable apportionment rate. Reimburses 100 percent of expenses incurred. Until the end of 2005, only companies with up to 30 employees were included in the maternity pay-as-you-go system (U2). Following a ruling by the Federal Constitutional Court, the legislature has lifted the limit. The constitutional judges feared that larger companies might discriminate against women in hiring compared to men. Since 1. From January 1, 2006, all companies, regardless of the number of employees, must participate in the U2 procedure. For employees who go on maternity leave, the health insurance funds pay an income-independent maternity allowance of €13.00 per calendar day. Employers initially pay the difference incurred up to the amount of the previous average net salary. This benefit is then reimbursed at 100 percent via the apportionment procedure. In the event of a ban on employment, the employer's contributions to social insurance are also reimbursed in addition to the gross remuneration continued to be paid.
Reimbursement U2
The following expenses are reimbursed:
– the maternity allowance paid by the employer – the pay paid by the employer in the case of employment prohibitions (maternity pay) – the employer's social security contributions attributable to the continued pay
Employers must take into account statutory protection periods:
– 6 weeks before delivery, expectant mothers may not be employed – 8 weeks after delivery, expectant mothers may not be employed – 12 weeks after delivery, in the case of premature and multiple births, expectant mothers may not be employed
In the event of a ban on employment, female employees receive a "maternity wage" from the employer. This is calculated from the amount of the average earnings of the last three months before pregnancy. If overtime pay or other bonuses were paid during this period, these must be included in the maternity pay. Even if a salary increase has been promised within these three months, this must also be included in the calculation if it takes effect during the pregnancy.
Vacation days may not be lost due to a ban on employment.
An employee receives a so-called "maternity allowance" from the health insurance fund. This amounts to 13.00 euros per day. If an employee earns more, the maternity benefit is subsidized by the employer. This is how the difference to the previous net income is compensated for. How do I have to pay the apportionment obligation in a wage-. Consider payroll? You will find further helpful information in our Online course on payroll accounting in the chapter Pay-as-you-go. When calculating the apportionment U1. U2 are according to §7 Abs. 2 sentence 2 AAG one-time paid wages according to §23a SGB IV not to be considered.
The basis for the calculation is the salary up to the contribution assessment ceiling in the pension insurance scheme.
The U1 and U2 contributions must be reported and paid to the respective health insurance companies with the monthly contribution statement.
The calculation can be done by the employer with a wage program, or by a service company for payroll accounting such as lohnexperte AG.
Maturity of the reimbursement claim
The employer is reimbursed for expenses in accordance with §2 para. 1 sentence 1 AAG is granted by the health insurance fund with which the respective employees are insured.
If an employer has failed in the past to get reimbursed for sick pay – it is not yet too late. Because the reimbursement claim only becomes time-barred after 4 years.