Country Payroll Guide Germany
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Key Facts
- Capital
- Berlin
- Date format
- dd/mm/yyyy
- Currency
- Euro (EUR)
- VAT
- the standard rate is 16%
Contributions
Employers
- Health Insurance - general contribution rate
- Health Insurance - General Contribution Rate - 7.3%
- Individual TK additional
- Individual TK additional - 7.9%
- Pension Insurance (RV)
- Pension Insurance - 9.3%
- Unemployment Insurance (AV)
- Unemployment Insurance (AV) - 1.2%
- Nursing Care (LTC) Insurance (PV)
- Nursing Care (LTC) Insurance (PV) - 1.525%
- LTC contribution if childless
- LTC contribution if childless - 0.25%
- Insolvency Charge (2021)
- Insolvency Charge (2021) - 2.8%
- Accident Insurance
- Accident Insurance - 1.19%
- Total Employment Cost
- Total Employment Cost - +/- 28.665%
Employees
- Health Insurance (KV)
- Health Insurance (KV) - 7.3%
- TK maximum rate
- TK maximum rate - 7.9%
- Pension Insurance
- Pension Insurance - 9.3%
- Unemployment Insurance
- Unemployment Insurance - 1.2%
- LTC Insurance
- LTC Insurance - 1.525%
- Total Employee Cost
- Total Employee Cost +/- 27.225%
Minimum Wage
- Minimum Wage
- The minimum wage in Germany is 9.60 EUR per hour.
Payroll
- Payroll Cycle
- Monthly
- 13th Salary
Varies employer to employer. All benefits subject to income tax.
Income Tax
- Employee Income Tax (1)
- Employee Income Tax (2)
- 9,744 - 14,754 EUR - 14-24%
- Employee Income Tax (3)
- 14,754 - 57,919 EUR - 24-42%
- Employee Income Tax (4)
- 57,919 - 272,613 EUR - 42%
- Employee Income Tax (5)
- Greater than 274,613 EUR - 45%
Working Hours
- General Working Hours
36-40 hours per week.
- Overtime
Must conform to maximum working hours (60 per week) and usually compensated with time off. Varies with employees contracts.
Leave
- Paid Time Off
20 days of paid holiday per year or 25 if you work a 6 day week.
- Public Holidays
9 national – 19 total which vary region to region.
- Sick Days
6 weeks of sick pay.
- Maternity Leave
Fully paid for 6 weeks before and at least 8 weeks after birth.
- Paternity Leave
Fathers are not entitled to paid paternity leave.
- Parental Leave
Unpaid up to 3 years – new parents can apply for parental allowance, which is a state funded program that pays up to 1,800 euros a month.
Termination
- Termination Process
In Germany an employee who has been employed for more then six months may be terminated only if one of the particular reasons for termination permitted by the German Termination Protection Act, Kündigungsschutzgesetz (KSchG) exists.
- Notice Period
The basic dismissal notice period is four weeks counting back from the 15th or the last day of a calendar month. This notice period increases depending upon the seniority of the employee.
- Severance Pay
There is no statutory severance in Germany. Employees are only entitled to severance payments under a social plan with the works council (often agreed on in the case of mass layoffs) or under a collective bargaining agreement.
However, in practice, many employers and employees will agree on severance pay provisions to avoid lengthy court proceedings. This severance will often amount to 50% of the monthly salary per year of service. However, this can vary significantly depending on the strength of the case for dismissal and the previous practice of the employer.
- Probation Period
There is no law that stipulates that one has to have a probation period, so for some jobs it’s possible to have none. Probation period usually runs for a maximum of 6 months. A longer period is also possible but rarely happens in Germany.
Visa
- Employment Visa
The Germany Employment Visa gives to its holder the chance to enter and work in Germany for up to two years, with the possibility of extending the visa, and later applying for an EU Blue Card, or other types of residence permits.
