What are vermögenswirksame Leistungen?

Vermögenswirksame Leistungen — usually shortened to VL or VWL — is essentially a small salary supplement that the employer pays directly into a savings product on your behalf. The product can be a fund-based VL contract, a building-society savings plan (Bausparvertrag), or a bank savings plan, depending on what you choose.

Eligibility and contribution amounts depend on your employer or collective agreement. Many employees in Germany are entitled to VL but never activate it — often simply because nobody told them it exists. Common employer contributions go up to around €40 per month. You can top up the contract with your own contributions up to a defined annual cap if you want.

For lower- and middle-income employees, the state may add an Arbeitnehmer-Sparzulage (employee savings allowance) on certain VL products — a small additional subsidy claimed through the annual tax return.

The right product depends on what you want to use the money for. Fund-based VL is usually preferred for long-term wealth building, while Bausparvertrag fits better if you might use the funds for a property purchase later.

The single most important step is also the simplest: ask HR whether your employment includes VL, choose a product, and submit the contract to payroll so contributions actually start. The amounts are modest individually, but they compound meaningfully over a long career — and any VL you don't claim is just employer money you're handing back.