Costs of Continued Remuneration in Case of Illness: 85.6 Billion Euros in 2025

The costs for continued remuneration in case of illness reached a record high of 85.6 billion euros for German employers in 2025. This is shown in a short report by the German Economic Institute (IW) Cologne from August 2026. Since 2020, this burden has increased by more than 21 billion euros. The total consists of 72.5 billion euros in continued gross wages and an estimated 13.1 billion euros for the corresponding social security contributions. Managing directors who want to secure their company's profitability must precisely model these downtimes and the resulting costs for replacement personnel in their own profit and loss statement.

Why the costs for continued remuneration are rising massively

The increase in costs for continued remuneration during illness results from a combination of wage developments, employment growth, and demographic change. Because wages have risen, every sick day costs the employer nominally more. At the same time, the number of eligible employees is growing due to higher overall employment. The IW Cologne also points out that older employees suffer more frequently from musculoskeletal disorders, which entail longer periods of absence. The increase in mental illnesses is also driving up the duration of absenteeism. Compared to 2010, when costs were still at 36.9 billion euros, the financial burden on companies has more than doubled.

Which legal requirements under Section 3 EFZG drive costs

The entitlement to continued remuneration exists according to Section 3 of the Continued Remuneration Act (EFZG) for six weeks, i.e., 42 calendar days, per illness. A widespread misconception in many companies is that this entitlement is limited to six weeks per calendar year. However, the law links the period to the respective case of illness. If a new, independent illness occurs, the six-week entitlement starts again. In the case of a continuation of the same illness, the periods are added together, provided there were not six months between the episodes. The burden of proof that it is a continued illness lies with the employer. A waiting period applies to new employees: the entitlement only arises after four weeks of uninterrupted employment.

Why the sick note requirement from day one is not yet a law

A general legal obligation to submit a certificate of incapacity for work from the first day of illness does not currently exist, even if a coalition resolution from July 2026 demands it. Currently, the three-day rule under Section 5 EFZG still applies, according to which a medical certificate must only be submitted from the fourth day. However, under current law, employers already have the option of demanding a certificate from the first day in individual cases or via a works agreement. The IW Cologne doubts that a legal tightening would bring about significant changes. Medical associations also warn of overloaded practices and an increased risk of infection in waiting rooms.

How partial sick leave works from 2028

Independent of the debate on the sick note requirement, the legislator decided to introduce partial sick leave with the GKV Contribution Rate Stabilization Act (BStabG) in July 2026. From January 1, 2028, employees can be put on sick leave in steps of 25, 50, or 75 percent. This mechanism aims at gradual reintegration and must not be confused with the discussion about sick leave from day one. The law has already been promulgated and its essential parts are coming into force, while the abolition of telephone sick leave remains a purely political project without a draft law so far.

How companies calculate the margin effect of downtimes in the Analysis Center

Isolated HR dashboards that only show sickness rates in percent are not sufficient for commercial management. The actual costs arise not only from continued remuneration but also from the use of expensive external or leased personnel to maintain operations. An analysis center turns scattered data from many systems into a single, actionable truth. It pulls data from the ERP system, time tracking, and financial accounting and makes it joinable.

In practice, this looks like this: A system reports, for example, a high occupancy rate of 94 percent for a clinic location, but at the same time shows that the contribution margin per care day is six percent below the group average. The analysis center identifies the drivers: increased energy costs and a high proportion of external personnel due to illness-related absences. Instead of a pure data display, the system provides concrete, justified recommendations, such as switching from leased staff to internal pool staff. Every key figure remains traceable back to the source, so that decisions are based on an auditable foundation and not on a black box.