German Companies Pay Record Sum for Employee Sick Leave

German businesses incurred unprecedented costs for employee sick leave in 2025, reaching a total of 85.6 billion euros. This figure, calculated by the Institute of the German Economy (IW), represents a significant increase and more than doubles the expenditure from just 15 years prior. The costs include not only gross wages paid during illness but also employer contributions to social security.

The IW attributes this sharp rise to several factors, including higher overall wages and increased employment levels within the country. Additionally, a rise in reported sick days has contributed to the escalating expenses. Notably, the institute points out a statistically significant increase in reported sick leave since the introduction of electronic recording of sick certificates in 2022.

However, the IW cautions that it remains unclear whether actual workplace absences have proportionally increased alongside the reported sick days. While the current level of sick leave is significantly higher than pre-pandemic figures, the precise impact on operational absenteeism requires further clarification. The study also offers a reserved outlook on the proposed mandatory sick note from the first day of illness, suggesting it may not be widely implemented due to administrative burdens and potential strain on employer-employee relations.

In 2024, the total expenditure for sick pay was 81.2 billion euros. The 2025 figure of 85.6 billion euros comprises 72.5 billion euros in gross wages, as reported by the Federal Ministry of Labour, and an estimated 13.1 billion euros in employer social security contributions calculated by the IW. This trend highlights a growing financial burden on German companies related to employee health.