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Pay Subject to Social Security Contributions in Germany

Whe­ne­ver em­ployees are sent ab­road by their em­ployer, the is­sue of so­cial se­cu­rity pro­tec­tion must al­ways be cla­ri­fied.

In stan­dard ca­ses, the an­swer to the ques­tion is easy: em­ployees of an em­ployer re­si­dent in Ger­many who work in Ger­many are sub­ject to the so­cial se­cu­rity ob­li­ga­tion here. Howe­ver, if an em­ployee is em­ployed ab­road for a li­mited pe­riod of time by an em­ployer re­si­dent in Ger­many, it must be cla­ri­fied whe­ther the ob­li­ga­tion to pay so­cial se­cu­rity in Ger­many con­ti­nues to exist, or whe­ther the em­ployee will be co­vered by so­cial se­cu­rity in the coun­try of em­ploy­ment and thus contri­bu­ti­ons are to be made in that coun­try. And even in the re­verse case of tem­porary em­ploy­ment of an em­ployee in Ger­many whose em­ployer is re­si­dent ab­road, the so­cial se­cu­rity re­gu­la­ti­ons of the other coun­try may still ap­ply, or it may be ne­cessary for the em­ployee to switch to so­cial se­cu­rity in Ger­many.

Pay Subject to Social Security Contributions in Germany© Thinkstock

Key Data on Mandatory Social Security Contributions in Germany in 2018

Social Security Branch

Contribution Rate

Statutory Health Insurance

14.6% plus surcharge per insurance (Employee contribution 7.3% plus surcharge / Employer contribution 7.3%)

Statutory Nursing Care Insurance

2.55%

(Employee contribution 1.275% / Employer contribution 1.275%)

Pension Insurance

18.6%

(Employee contribution 9.3% / Employer contribution 9.3%)

Unemployment Insurance

3%

(Employee contribution 1.5% / Employer contribution 1.5%)

Contri­bu­ti­ons to health and nur­sing care in­surance are le­vied on a monthly salary of up to 4,425 eu­ros. Monthly pay of up to 6,500 eu­ros (in the West Ger­man sta­tes) and 5,800 eu­ros (in the East Ger­man sta­tes) is sub­ject to pen­sion and un­em­ploy­ment in­surance.

This is­sue of in­surance pro­tec­tion, which is of vi­tal im­port­ance to the em­ployee and can also cause con­side­ra­ble ad­di­tio­nal costs for em­ploy­ers who get it wrong, can only be de­ci­ded on a case-by-case ba­sis. In ad­di­tion to the time frame of the pos­ting, the is­sue also turns on the ques­tion of who is to be re­gar­ded as the em­ployer of the pos­ted em­ployee, and this ques­tion in turn in­ter­acts with the du­ra­tion and struc­ture of the pos­ting.

In or­der to save time and costs in de­ter­mi­ning the so­cial se­cu­rity ob­li­ga­tion of pos­ted em­ployees, it is a good idea to set up stan­dard pro­ce­du­res in your com­pany (a com­pli­ance sys­tem). This will al­low you to ap­ply re­sults al­re­ady ob­tai­ned from au­dits to the same or si­mi­lar ca­ses and thus to make the le­gal de­ter­mi­na­tion more quickly. Sour­ces of er­ror are eli­mi­na­ted.

We would be happy to as­sist you in cla­ri­fy­ing the so­cial se­cu­rity is­sues that arise in your spe­ci­fic case. In or­der to en­sure com­pli­ance with the le­gal re­qui­re­ments at home and ab­road when you have pos­ted a num­ber of em­ployees over­seas, we can also help you de­ve­lop and im­ple­ment a com­pli­ance sys­tem.

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