Wage costs are an important cost item for most companies.
In addition to the employee’s gross salary, certain social security contributions must be paid by the employer. The so-called immediate reporting obligation is also prescribed for certain industries.
The following is an overview of the individual cost items. The values can change from year to year; the rates for 2022 are listed here.
The following social security contributions must be paid compulsorily for employees:
– Unemployment insurance (2.4%)
o Employee/employer 1.2% each
– Pension insurance (18.6%)
o Employee/employer 9.3% each
– Health insurance (14.6% + additional contribution to be paid by the employee)
o Employer/employee 7.3% each
– Long-term care insurance (3.05% + 0.35% for childlessness)
o Employee/employer 1.525% each
The additional contribution for childless persons in long-term care insurance concerns insured persons who have reached the age of 23 and do not yet have children. The latter bears the additional contribution alone. If he is a member of a religious community, church tax may be compulsorily withheld from the employee’s gross salary.
In principle, the net salary is paid to the employee after deduction of the wage tax, the solidarity surcharge and, if applicable, the church wage tax and the social security contributions, which are to be borne by the employee.
In addition, the employer must pay the so-called insolvency allowance levy, U1 for continued payment of wages in the event of illness and U2 for maternity expenses.
Contributions are also made to the statutory accident insurance scheme.
These are levied by the employers’ liability insurance associations (Berufsgenossenschaften), which are organised according to industry.
Upon commencement of commercial activity, the business must be registered with the responsible employers’ liability insurance association. The contributions to this Berufsgenossenschaft
are levied annually in arrears on a pay-as-you-go basis and must be paid by the employer alone.
For marginally employed persons (mini-jobs), as well as for short-term employed persons (seasonal employment), special
(seasonal employment), special regulations apply.
The contribution rates are set anew from year to year.
There is a so-called contribution measurement limit for health and pension insurance, which is also adjusted every year. Those who earn above this limit only pay health insurance and pension contributions up to this limit. Employees who are above the limit for health insurance can choose whether they remain voluntarily insured under the statutory scheme or whether they switch to private insurance.
In addition, other factors can also cause additional personnel costs, such as paid public holidays (statutory), continued remuneration in the event of illness (statutory), voluntary special payments (e.g. 13th month’s salary, bonuses), company pension schemes or other additional personnel costs (e.g. reimbursement of travel expenses).
Immediate reporting obligation
Since 1 January 2009, there has been an immediate reporting obligation for certain branches of the economy, i.e. in these branches the employer must additionally submit a report directly to the Data Centre of the Pension Insurance (DSRV) at the latest when employment commences.
Among others, employers in the following economic sectors are affected by the additional immediate notification:
- Construction,
- catering and accommodation industry,
- passenger transport,
- freight forwarding, transport and related logistics,
- showmen’s trade,
- forestry enterprises,
- building cleaning industry,
- enterprises involved in the construction and dismantling of fairs and exhibitions, and
- meat industry.