Bradford Jacobs specialise in providing a full-service payroll and human resources solution in Germany, both for foreign employers and for companies planning to send workers to Germany.

With the German government holding an employer liable for mistakes made in the payroll administration, many organisations, have found that they can reduce costs and reduce their risk of liability by outsourcing their payroll services to a dedicated German payroll service company.

German Payroll Services for Contractors

We offer a dedicated German Payroll solutions specifically for contractors which can be tailored to meet your specific requirements- saving you time and money. The less time you spend thinking about German payroll the more time you’ll have to concentrate on your business, so let our dedicated team of professionals handle it all on your behalf. Contact us today to find out how.

As part of our client facing service, we can also assist with registration of your contractors with the German Tax & Social Security system. Bradford Jacobs can not only help with this process but can navigate the complex and knowledge-intensive administration of the German payroll system for you. As part of our service, we can administer the returns and associated payments for wage tax and social security contributions directly from our payroll system to the tax authority.

Payroll Services Germany for Employers

If you are planning to send workers in Germany, compliance with relevant employment regulations is essential. Whilst employers with an understanding of the regulations do have an advantage, new rules that regulate the payroll process continue to be developed and implemented. Bradford Jacobs can not only help with this process but can navigate the complex and knowledge-intensive administration of the German payroll system for you. As part of our service, we can administer the returns and associated payments for wage tax and social security contributions directly from our payroll system to the tax authority.

As part of our client facing service, we can also assist with registration of your contractors with the German Tax & Social Security system. Bradford Jacobs can not only help with this process but can navigate the complex and knowledge-intensive administration of the German payroll system for you. As part of our service, we can administer the returns and associated payments for wage tax and social security contributions directly from our payroll system to the tax authority.

  • Registration with the German Tax Office.
  • Registration with the Sozialversicherungen (Social Security Organisations).
  • Creation of Employment Contracts.
  • Application of the Special Expatriation Status (if applicable).
  • Calculation of Monthly Salary and Creation of Payslips.
  • Advice about the Available Tax Free Allowances.
  • Submitting of Wage Tax Returns and Forms for National Insurance.
  • Correspondence with Involved Parties.
  • Annual Accounts, Administration and Year End Statements.
  • Creating Payment Schedule for Wage Tax, National Insurances, and Net Wages.
  • Personal Income Tax Returns.

Outsourcing your German Payroll

Outsourcing your payroll can serve as a more cost-effective, simpler method of paying your employees and filing your wage tax returns on time and in full. By outsourcing payroll, you can also benefit by gaining peace of mind knowing that you are paying the correct wage tax and social security obligations in full and on time.

You won’t have to worry about incurring tax penalties for late or incomplete filing and payment. Your company and your employees can focus solely on your business goals, without ever having to worry about the complexities of payroll management.

German Income Tax

You can find general information on income tax rates here, in relation to Germany. This guide also covers the income tax base for residents and non-residents, allowable tax credits and deductions, the special expatriate tax regime, capital income tax rates and information on double-taxation treaties.

Income Tax Base For Residents and Non-Residents of Germany

Residents of Germany

are subject to personal income tax on their total income, from all sources worldwide.

Non-residents of Germany 

are subject to personal income tax on German sourced income only.

Individuals will be regarded as tax residents if:

  • Their main home or centre of economic interests is in Germany.
  • They are registered within the civil register.

A surcharge must be added, of 5.5% of the amount of income tax, if it concerns a solidarity contribution. Within Bavaria and Baden-Württemberg there is also a 9% Church Tax.

Allowable Deductions and Tax Credits

Insurance bonuses, education and training expenses, retirement expenses, alimony, donations and expenses related to disability are all deductible.

Special Expatriate Tax Regime

Germany has signed avoidance of double taxation agreements with many countries in the world. For more information refer to the Ministry of Finance (German only).

Capital Tax Rate

  • No special capital gains tax.

Double Taxation Treaties

Countries With Whom a Double Taxation Treaty Have Been Signed

Centre for German Legal Information (CGerLI), Access the list of Double Taxation Treaties signed by Germany

Withholding Taxes Dividends:

Dividends: 26.3%, Interest: 0%/26.3, Royalties:15.8%

Filing Date

Tax returns are due by 31st May the following year.

Figures Based on Sources

Tax Authorities

Other Domestic Resources

Country Guides

German Social Security

Residents and Non-residents working within Germany are required by law to pay social security contributions on their gross salary and all earnings in Germany.

Social Security contributions are deducted automatically, when employed through EAFS Consulting GmbH and paid directly to the Social Security office employees in German are subject to both employer and employee social security deductions.

Social Security Rates

  • Health Insurance – 15.6% – Employer pays 7.4% and Employee pays 8.2%
  • Unemployment Insurance (3.0%) – Employer and Employee pay 1.5% each
  • Nursing care Insurance – Employer and Employee pay 2.55%, an extra 0.25% paid by any childless employee
  • Pension Insurance (18.6%) – Employer and Employee pay 50% each

The German Social Security Contributions are made to the following funds:

  • Health Insurance (Krankenversicherung)
  • Unemployment Insurance (Arbeitslosenversicherung)
  • Nursing care Insurance (Pflegeversicherung)
  • Pension Insurance (Rentenversicherung)

Employees whose income exceeds EUR 45’900 per year are entitled to elect whether to be insured by public or private health insurance. Therefore, you can opt out of the state contribution and register for private medical insurance, depending on your circumstances.

 Contact us to arrange an initial consultation with our team.