Payroll in Germany

The first employee changes what a German company owes the authorities each month. The employer withholds wage tax (Lohnsteuer) and pays it to the tax office, registers each employee for social insurance, and pays the contributions that employer and employee share. Payslips, the monthly reports and the year-end certificates all follow fixed formats, and they belong to the records the tax code requires a company to keep: eight years for accounting vouchers and ten for the books. A foreign owner also has to decide early whether a managing director who lives abroad is on the German payroll at all, since that question touches tax and social insurance in two countries.

Firms offering payroll in Germany

87 more firms offering payroll in Germany

What to ask a payroll provider in Germany

Ask which payroll software the firm uses and whether it registers the company as an employer with the health insurance funds. Ask how it handles staff who move between Germany and your home country, and whether it can apply for the certificate that keeps an employee in the social security system of another EU country. Find out when each month it needs the hours, bonuses and joiners and leavers, and what the fee per payslip covers, including year-end work and queries from an inspector.

Firms on Accountanty

Accountanty lists 111 firms that run payroll in Germany: 102 accounting firms, five law firms and four corporate service providers. Sixty-three are small, 34 medium-sized and 14 part of large networks. Of the 111, 107 work in German and 91 in English. Every one of them also keeps accounts, so salaries and the ledger can sit with the same firm. The largest groups are in Berlin with 33 and Frankfurt with 26, followed by Munich with 25 and Hamburg with 20. If you are bringing staff from outside the EU, see residency and visas in Germany.

Frequently asked questions

Can a foreign company employ staff in Germany without a German entity?

Sometimes, but the employer still takes on German wage tax and social insurance duties, and a permanent establishment may arise. Ask a payroll firm and a tax adviser to look at your case before the contract is signed.

Do German payroll firms on Accountanty work in English?

Most do. English is offered by 91 of the 111 firms that run payroll in Germany. Ask whether payslips and the monthly summary can be produced in English, since the official reports stay in German.

What does a payroll provider in Germany need for a new hire?

The signed contract, the tax identification number, the health insurance fund, the social insurance number, bank details and the start date. Send them before the first month closes so the registration is on time.

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General information, not legal or tax advice. Rules, rates and fees change: check them with the official sources linked on this page or with a qualified adviser before you act.