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Germany Employee Savings Allowance Guide (Vermögenswirksame Leistungen)

Vermögenswirksame Leistungen (VL) are contributions your employer pays into a savings or investment plan on your behalf, typically up to €480 per year. The Arbeitnehmersparzulage (employee savings bonus) is a state subsidy of 20% on contributions up to €480 for Bausparen (building savings) or €1,200 for investment fund savings — subject to income limits of €20,000 (single) / €40,000 (married).

VL is one of Germany's most valuable employee benefits. While the employer contribution itself is part of your gross salary (and subject to tax and social contributions), the state bonus is pure subsidy. Many employees leave money on the table by not setting up a VL contract. Your employer may offer VL automatically — check your Arbeitsvertrag or ask your HR department. For related reading, see our Savings Allowance Guide → and ETF Tax Guide →.

Investment Forms for VL

  • Bausparvertrag (building savings contract): A classic VL option. Contributions earn interest and eventually qualify you for a low-interest mortgage loan. The state bonus (Arbeitnehmersparzulage) is 20% on up to €480/year = max €96/year. Income limit: €20,000 single / €40,000 joint.
  • Investment fund savings (Investmentfonds): VL contributions can be invested in equity or mixed funds. The state bonus is 20% on up to €1,200/year = max €240/year. Same income limit: €20,000 single / €40,000 joint. Funds must be VL-approved (VL-fähige Fonds).
  • Bank savings plan (Banksparplan): A simple savings account with a 7-year lock-in period. No state bonus, but employer contributions are still tax-advantaged. Lower returns than fund-based VL.
  • Life insurance (Lebensversicherung): Certain old-style life insurance policies qualify for VL contributions. New policies since 2020 generally do not qualify due to changes in insurance regulation.

Key Rules and Deadlines

  • Employer obligation: Some collective bargaining agreements (Tarifverträge) guarantee VL payments. Check your contract — if VL is not mentioned, ask your employer. The typical maximum employer contribution is €480/year (€40/month).
  • Blocking period (Sperrfrist): VL funds are locked for 7 years (except for certain hardship withdrawals). After 7 years, you can access the funds plus returns tax-free (for Bausparen) or subject to Abgeltungsteuer (for fund savings).
  • Applying for the bonus: You must claim the Arbeitnehmersparzulage through your tax return (Anlage VL). The Finanzamt checks your income and credits the bonus directly to your VL contract. Do not forget — the bonus is not automatic without filing.
  • Income calculation: The income limit is based on zu versteuerndes Einkommen (taxable income), not gross salary. If your gross salary is near the limit, deductions may bring you under the threshold. Always calculate carefully — many people qualify even if they think they earn too much.