Payroll Service

Salaries are paid at the end of each month after the payroll service had been rendered. Since the deadline for social security contributions is around the 25^th of every month, the payrolls have to be prepared by then. The social security data will be sent electronically to the public health insurance by the tax consultant. Wage taxes have to be paid to the local Financial Authorities.

The German payrolls look pretty much alike:

1. Payroll Service – Personal data

At the top you will find the personal data: address, birthday, social security number, tax class, religion, tax number etc. The employer and his tax consultant will need these details to prepare the payroll.

2. Payroll Service – Wage

At the center of the payroll you will find the wage, including benefits such as direct insurance, private part of company car usage and taxfree benefits such as payments for public transportation to get to work.

After each amount you can see if it is tax or social security free. In most cases this is identical.

3. Payroll Service – Wage tax and social security amounts

Next, you will find listed the wage tax which is subtracted from your gross wage and your social security amounts.

4. Payroll Service – Result (net payment)

After the wage tax and the social security amounts are subtracted the non-cash benefits (e. g. car usage) that were added at the top to get to the gross wage have to be deducted because the employee had received those already. If former payrolls had been corrected the differences will be found in this part as well.

The amount at the right side of the bottom will be paid to the employee.

On the left side of the bottom you can find the summary for the whole year.

If you prefer German explanations please click here to get forwarded to my German homepage.