German payroll — and everything attached to it.

The payroll month follows a fixed sequence:

1. Master and movement data — changes such as joiners, leavers, salary adjustments, absences and variable pay are with us by an agreed cut-off date.
2. Payroll run — gross pay, statutory deductions, net pay. You receive the payslips, the posting journal and the payment list for approval.
3. Filings — the contribution statement to the health insurers acting as collection agencies, and the wage tax return to the Finanzamt.
4. Payments — social security contributions fall due at the latest on the third-to-last banking day of the month in which the work is done (§ 23 Abs. 1 SGB IV), wage tax by the 10th of the following month (§ 41a Abs. 1 EStG).

Social security contributions are therefore payable before the month of employment has even ended. The first calculation is accordingly made on an estimated figure, which is trued up in the following month.

We need personnel master data, employment contracts, details of social security status, tax identification numbers and any A1 certificates. We check all the documents for completeness and then take care of the filings with the competent bodies.

The relevant forms are available under downloads — for new hires, mini-jobs, apprentices, immediate notifications and terminations.

The entitlement to a payslip follows from § 108 GewO: it has to be provided in text form when the pay is made, and it has to state the pay period and the make-up of the remuneration. The detail is governed by the Entgeltbescheinigungsverordnung, the regulation on pay statements.

Among other things, that includes:

• name and address of employer and employee, date of birth, social security number
• start and, where applicable, end of employment, the pay period and the number of tax days
• tax class, child allowances, religious affiliation and further tax characteristics
• the contribution group key and the competent collection agency
• each element of pay separately, marked as recurring or one-off, and as taxable or contributory or exempt
• the deductions, split between taxes and social security contributions

Pay statements in other countries follow a different logic and do not carry these details. We produce the payslip to the German pattern, on request with an explanation in French or English for your staff.

In Germany, wage tax and social security contributions are calculated, shown and remitted separately — wage tax to the Finanzamt, contributions to the health insurer acting as collection agency, and on two different dates. Systems in which a single deduction covers everything, or in which income tax is withheld at a personal rate carried over from the tax return, work differently.

The second distinctive feature is the number of bodies involved: five branches of social security, plus the Berufsgenossenschaft and the Bundesagentur für Arbeit, each with its own filing route and its own deadline.

We run the German side in full and align it with the payroll in your own country, so that the figures match where they have to — for postings, for cross-border commuters and for group reporting. On request we take on the payroll in both countries: accurate, compliant and on time.

The wage tax deduction follows tax classes and further characteristics that the employer retrieves electronically — not an individual rate carried over from a tax return.

• Tax class, child allowances, religious affiliation and allowances are made available by the tax authorities as ELStAM data. The employer registers the employee and retrieves them; the tax identification number and date of birth are needed.
• Wage tax, the solidarity surcharge and, where the employee belongs to a church, church tax are withheld.
• The wage tax return is due by the 10th day after the end of the filing period; the tax is payable on the same date (§ 41a Abs. 1 EStG).

The deduction is a payment on account. The final liability follows only from the employee's own income tax return; the employer is nevertheless liable for deducting the correct amount.

There are two separate deadlines:

• Social security — contributions fall due at the latest on the third-to-last banking day of the same month in which the work is done (§ 23 Abs. 1 Satz 2 SGB IV). The contribution statement has to reach the collection agency before that.
• Wage tax — return and payment by the 10th day after the end of the filing period (§ 41a Abs. 1 EStG).

The filing period for wage tax depends on the previous year's total (§ 41a Abs. 2 EStG): above EUR 5,000 monthly, above EUR 1,080 quarterly, below that annually. For newly formed businesses the wage tax of the first full calendar month is extrapolated.

Social security is therefore due before the end of the month, wage tax only afterwards. We monitor the deadlines and come back to you in good time where an approval is outstanding.

There are five branches. With the exception of accident insurance, contributions are as a rule borne half and half by employer and employee. For 2026:

• Health insurance — general contribution rate 14.6 %, plus a supplementary rate set by each insurer (2.9 % on average).
• Pension insurance — 18.6 %.
• Long-term care insurance — 3.6 %, with a supplement for the childless and reductions from the second child onwards.
• Unemployment insurance — 2.6 %.
• Statutory accident insurance — borne by the employer alone, through the Berufsgenossenschaft, and not through the payroll.

Contributions are levied only up to the contribution assessment ceiling: in 2026 that is EUR 5,812.50 per month for health and long-term care insurance and EUR 8,450 per month for pension and unemployment insurance.

On top of these come the levies U1, U2 and U3, which the employer bears alone. For costing a German position we work the total burden through in concrete terms.

The threshold is tied to the minimum wage. For 2026, at a minimum wage of EUR 13.90:

• Mini-job — up to EUR 603 a month. The employee as a rule pays no contributions (pension insurance can be opted out of on application), while the employer pays flat-rate charges to the Minijob-Zentrale.
• Midi-job (transitional band) — from EUR 603.01 to EUR 2,000 a month. The employee's share rises on a sliding scale, and full insurance cover applies from the outset.
• Regular employment — from EUR 2,000.01, with full contributions split in half.

The minimum wage, working time records, holiday entitlement and continued pay during sickness apply to mini-jobs too. What counts is the regular monthly pay: exceeding the limit occasionally is harmless subject to conditions, while doing so permanently brings compulsory insurance retrospectively. We check the classification before the first payroll run.

Compulsory membership of the statutory health insurance revives in principle where the regular annual income falls below the relevant threshold — for 2026: EUR 77,400, or EUR 69,750 under the special threshold.

In that case the voluntary membership ends and compulsory insurance takes effect again. The health insurer then classifies the person as a compulsorily insured member. Contributions are no longer calculated under the rules for voluntary members but under those for compulsorily insured employees.

Important: voluntary membership continues only for as long as no compulsory insurance arises. There is no grandfathering for the voluntary membership.

For 2026 the following adjustments apply:

• Maximum amounts: contributions to a funded Pensionskasse, a pension fund or a direct insurance policy are exempt from tax up to 8 % of the contribution assessment ceiling in the general pension insurance — for 2026 that is EUR 8,112 a year. Contributions are exempt from social security up to 4 %, that is EUR 4,056 a year, or EUR 338 a month.
• Employer contribution: where pay is converted into pension contributions, the employer has to add 15 % of the converted amount to the extent that it saves social security contributions by doing so. This applies to direct insurance, pension funds and Pensionskassen.
• Subsidy for lower earners: for employees earning up to EUR 2,575 a month, employers receive a subsidy of 30 % on additional contributions. If the limit is exceeded during the year, the subsidy ceases from that point; no retrospective correction is required.
• Commutation of small entitlements: the thresholds have been raised. Commutation is possible where the monthly pension does not exceed 1.5 % of the monthly reference figure.
• Flat-rate taxation under § 40b EStG (old version): for commitments given before 2005, flat-rate taxation at 20 % remains possible where the conditions are met.

As a rule the place-of-work principle applies: social security contributions are paid where the work is actually carried out. Where someone works in more than one country, an A1 certificate can establish which national law applies.

We apply for the certificates, see the procedure through and reflect the outcome in the German payroll.

The Deutsche Rentenversicherung audits every employer at least every four years to check that filing and contribution duties have been met correctly (§ 28p Abs. 1 SGB IV). It runs independently of the tax audit.

What is examined above all:

• the assessment of employment status, particularly for freelancers and managing directors
• the line between contributory and non-contributory elements of pay
• mini-jobs, the transitional band and multiple employments
• the U1 and U2 levies and the artists' social security contribution

If a contractual relationship is reclassified as employment after the event, the employer owes the contributions for the past, including the employee's share; recovering that from the employee is possible only within narrow limits.

We assess the status before the contract is signed, prepare the audit, conduct the correspondence and see the auditor through it.

The contributions are borne by the employer alone and paid directly to the competent Berufsgenossenschaft. Employees pay nothing towards them — which is why accident insurance does not appear on any payslip.

Because no individual employee contributions arise, the statutory accident insurance is paid separately, on the annual assessment notice from the Berufsgenossenschaft — not through the monthly payroll run.

Set out in full under statutory accident insurance.

Both are governed by statute; only more favourable terms can be agreed by contract.

Holiday (§ 3 BUrlG): the statutory minimum holiday is 24 working days a year. Working days are all days other than Sundays and public holidays — on a five-day week that comes to 20 days of holiday. Collective agreements and employment contracts frequently provide for 25 to 30 days.

Continued pay (§ 3 EFZG): where an employee is unfit for work through no fault of their own, pay continues for up to six weeks. After that the health insurer pays sickness benefit. The entitlement arises once the employment relationship has run uninterrupted for four weeks.

Part of the cost of continued pay is reimbursed through the U1 levy to businesses with, as a rule, up to 30 employees. We carry holiday entitlements, remaining holiday and continued pay periods forward on an ongoing basis and show them on the payslip.

Yes, provided § 616 BGB has not been expressly excluded or limited in the employment contract or the collective agreement. There is then an entitlement to paid leave for a comparatively short time in order to care for a sick child — even without any specific provision in the contract.

• The entitlement follows from § 616 BGB: a personal reason for absence, through no fault of the employee, for “a comparatively insignificant period” (in practice roughly 3 days to 2 weeks, often up to 5 days as a guide).
• § 616 BGB can be excluded or reduced by contract. Only where such an exclusion exists is no pay due.

What decides the payroll treatment: where § 616 BGB applies, the employer continues the pay and no child sickness benefit is paid for those days. Where it is excluded, unpaid leave under § 45 SGB V applies, with child sickness benefit from the health insurer where the conditions are met.

That businesses with an entirely male workforce take part in the U2 scheme looks contradictory at first sight — but it is exactly as intended. The levy does not attach to the composition of the workforce; it attaches to being an employer.

All employers take part in the U2 scheme, regardless of size and of the gender balance. What counts is the pensionable pay of all employees — expressly including that of the men.

The reason: the U2 levy is not a surcharge on businesses with female employees but part of a solidarity-based equalisation scheme. The cost of maternity protection is not meant to fall on individual employers or sectors but to be spread across all of them. That prevents businesses with a higher proportion of women from being structurally disadvantaged.

There is also this: the make-up of a workforce is not static. A business that employs only men today can hire women at any time. The obligation to pay the levy therefore arises with the employment relationship, not only when a case of maternity protection actually occurs.

Anyone who has reached the statutory retirement age (as a rule 67, with transitional rules for those born up to 1963) can earn up to EUR 2,000 a month, or EUR 24,000 a year, free of tax as an employee subject to social security.

• The tax-free monthly amount cannot be carried over: whatever is not used in a month lapses.
• The exemption applies from the month following the month in which the retirement age is reached.
• The income remains subject to social security: contributions to health and long-term care insurance continue to arise. Pension contributions can be made voluntarily.
• Earnings above EUR 2,000 a month are taxed in the ordinary way.
• The rule applies only to income from employment under a contract of service — not to mini-jobs, the self-employed, freelancers, farmers and foresters or civil servants.
• The relief is granted alongside the basic allowance and is not subject to the progression proviso.
• Where there is more than one employment, the allowance may be used in one only. In tax class VI a written confirmation from the employee is required that the exemption is not already being applied elsewhere.

The Aktivrente has no effect on the rate applied to other income; pensions already in payment continue to be taxed as before.

The applicable double taxation treaty — the Germany–France treaty, for instance — determines which country has the right to tax. As a rule the tax is levied in the country where the work is carried out, with relief in the country of residence.

We handle the German deduction and the German filings and reconcile them with the treatment in the country of residence, so that the same income is not taxed twice.

Under the frontier worker rules of the applicable treaty, cross-border commuters are as a rule taxed in their country of residence, while social security contributions are paid in the country where they work. Tax and social security therefore come apart, and the payroll has to reflect that.

We prepare the payroll so that both obligations are met, and we apply for the certificates the arrangement requires.

Yes. We look after companies with cross-border teams and take on the complete German payroll process, including the payslips, the filings with the German authorities and the correspondence with them.

Your staff can come to us directly with their questions, in German, French or English.

In DATEV LODAS — the standard widely used in Germany for payroll. For you that means tested filing routes to the collection agencies, to the Finanzamt and to the Berufsgenossenschaft: contribution statements, the wage tax return and the social security filings all run through the interfaces provided for them.

The output — payslips, posting journal, payment list — is supplied so that it can be taken into your accounting and your group reporting. Which system you use yourself makes no difference to that.

Yes. A change during the year is possible, provided the cumulative year-to-date figures are carried over in full.

That includes gross pay, taxes, contributions, allowances and the holiday and continued pay periods. Without them, the contribution assessment ceilings and the annual calculations would reset, which leads to incorrect deductions and a faulty annual wage tax certificate.

We request the data from the outgoing provider, take the year-to-date figures over and reconcile them, re-register the ELStAM data and register with the collection agencies. On request the first month runs in parallel as a check.

How a change of adviser works in general is set out under changing advisers.