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.
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.