PAYROLL ACCOUNTING AND SOCIAL INSURANCE

Payroll accounting includes preparing monthly salary statements for the employees, filing the monthly wage returns for the tax authority and the social insurance returns.

If required we send the pay check to the employee or wire the money on behalf of the client.

Taxes and social security contributions are deducted from the gross income at source by the employer. Gross and net income are listed in the salary slip (Gehaltsabrechnung).

The right to have insurance in times of sickness, accidents at the workplace, unemployment, old age and when there is need for care or in times of invalidity, is financed by the payment of social contributions from employees and employers and as well as state subsidies.

The money paid monthly for health, pension and care insurance are called social contributions. The amount paid depends on the level of income. They are paid half by the employer and half by the employee. The employee part is deducted from the gross wages and is then paid by the employer along with their contribution to the insurers.

The payments into the German social security system are calculated as a percentage of the employee's earned income. However, the contribution is capped for salary amounts indicated below.

The current rates for German social security contributions are:

Retirement Insurance: 19.5 percent of your monthly salary but not on that part of the salary which exceeds € 5,150.00 (€ 4,350.00 in the Eastern German states).

Health Insurance: around 14.0 percent. This rate may vary by region but will not be applied on that part of your monthly salary which exceeds € 3,487.50. You can get out of the government's health insurance plan and buy your own private insurance if your annual salary exceeds € 41,850.00.

Long-Term Care Insurance: 1.7 percent of the gross salary. The caps are the same as those for health insurance.

Unemployment Insurance: 6.5 percent of the gross salary. The caps are the same as those for retirement insurance.

Total the social security contribution is 41,7% of the gross income, payable half by the employer and half by the employee.

	PAYROLL ACCOUNTING AND SOCIAL INSURANCE Payroll accounting includes preparing monthly salary statements for the employees, filing the monthly wage returns for the tax authority and the social insurance returns. If required we send the pay check to the employee or wire the money on behalf of the client. Taxes and social security contributions are deducted from the gross income at source by the employer. Gross and net income are listed in the salary slip (Gehaltsabrechnung). The right to have insurance in times of sickness, accidents at the workplace, unemployment, old age and when there is need for care or in times of invalidity, is financed by the payment of social contributions from employees and employers and as well as state subsidies. The money paid monthly for health, pension and care insurance are called social contributions. The amount paid depends on the level of income. They are paid half by the employer and half by the employee. The employee part is deducted from the gross wages and is then paid by the employer along with their contribution to the insurers. The payments into the German social security system are calculated as a percentage of the employee's earned income. However, the contribution is capped for salary amounts indicated below. The current rates for German social security contributions are: Retirement Insurance: 19.5 percent of your monthly salary but not on that part of the salary which exceeds € 5,150.00 (€ 4,350.00 in the Eastern German states). Health Insurance: around 14.0 percent. This rate may vary by region but will not be applied on that part of your monthly salary which exceeds € 3,487.50. You can get out of the government's health insurance plan and buy your own private insurance if your annual salary exceeds € 41,850.00. Long-Term Care Insurance: 1.7 percent of the gross salary. The caps are the same as those for health insurance. Unemployment Insurance: 6.5 percent of the gross salary. The caps are the same as those for retirement insurance. Total the social security contribution is 41,7% of the gross income, payable half by the employer and half by the employee.
[ HOME ] [ ABOUT ] [ ADVANTAGES ] [ SERVICES ] [ GERMANY ] [ CONTACT ]
[ © by Bauer&Merkel ]