Payroll in Germany

Church tax, solidarity surcharge, health insurance contributions and social security contributions, all of them are part of the salary in Germany.

What do I have to take into account regarding payroll accounting in Germany?

Is your employee data up-to-date?

The contract, personal data, address, bank details, social security number, tax code, child allowance and the current health insurance data must be checked every month for changes.

Wage or salary?

Wages are calculated based on the hours worked and can therefore vary from month to month. Salary is paid out as a fixed amount monthly, regardless of actual working hours. As an employer, you must clearly state in each statement whether it is salary or wages.

Notification of illness?

In the case of a sick report, you may be entitled to a proportionate financial support from the health insurance fund and thus get back cash.

How does payroll work in Germany?

Payroll in 3 stages - preparatory payroll, payroll, and the delivery of payroll documents

1. prepared payroll

All necessary payroll data must be prepared by the middle of the month. New employees must be created and reported to the health insurance and tax office. A contribution must be signed and data such as church affiliation must be collected. Existing employee files must be checked for changes. For example, if one of your employees has married, this also affects the tax code. The preparation of payroll is only completed when all employee data is currently available

2. Payroll

Your personal HeavenHR payroll accountant will now create the payroll. The ratio of gross and net wages varies according to the tax code, child allowance and all data recorded in the contract. The payroll clerk also pays attention to whether the employee, for example,pays part of the company pension or is currently on parental leave. After the payroll is completed, you will receive the disaggregated amounts that you will need to transfer to your employees, health insurance funds and social insurance.

3. Payslips

As soon as payroll accounting is completed, companies are obliged to show their employees the amount that is key-worthy and to send a payroll receipt. These so-called payslips can be delivered digitally, by post or by hand. The abbreviations that can be found on the payslips can be a little bit confusing.

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