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Nexia Ebner Stolz

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 BranchContribution Rate
Statutory Health Insurance14.6% plus surcharge per insurance (Employee contribution 7.3% plus surcharge / Employer contribution 7.3%)
Statutory Nursing Care Insurance2.55% (Employee contribution 1.275% / Employer contribution 1.275%)
Pension Insurance18.6% (Employee contribution 9.3% / Employer contribution 9.3%)
Unemployment Insurance3% (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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