Payroll Services in Germany (English-Speaking, GmbH-Ready)

What an employer really pays on top of gross salary

Beyond the gross salary, the employer pays its share of four social-security branches. The contributions are split broadly half-and-half between employer and employee.

Added together, social security comes to roughly 40% to 42% of gross before the assessment ceilings, with an employer add-on of roughly 21% of gross. Treat these as indicative headlines "before ceilings", not as a per-payslip figure: the actual number depends on the fund's Zusatzbeitrag, the employee's childless status, the ceilings (income above them is contribution-free) and any Minijob/Midijob rules. On top of this sits the statutory minimum wage (Mindestlohn) of €13.90 per hour from 1 January 2026, rising to €14.60 per hour from 1 January 2027; this is a national floor, and some industries set higher minimums. The full cost of an employee is therefore the gross plus the employer add-on, which feeds into the wider German corporate taxes picture of running a company here.

2026 contribution-assessment ceilings (Beitragsbemessungsgrenze)

Social-security contributions are only charged on income up to an annual ceiling (the Beitragsbemessungsgrenze); income above the ceiling is contribution-free.

The Versicherungspflichtgrenze is the income level above which an employee may opt out of statutory health insurance into private cover. The Knappschaft (miners') pension ceiling is higher, at €10,400 per month. These ceilings are uprated annually by ordinance, so confirm the current-year figures before relying on them.

Wage tax, solidarity surcharge and church tax

The employer withholds Lohnsteuer, the solidarity surcharge and church tax from each salary and remits them with the Lohnsteuer-Anmeldung, due by the 10th after each registration period (§41a EStG). The filing period is monthly by default, but quarterly if the prior year's wage tax was more than €1,080 and up to €5,000, and annual if it was €1,080 or less.

The solidarity surcharge (Solidaritätszuschlag) is 5.5% of the assessed wage tax, but since 2021 only a minority of earners actually pay it: the exemption thresholds are high (for 2026 a single Freigrenze of roughly €20,350 of assessed income tax, with a sliding mitigation zone above it). Do not assume every employee pays soli. Church tax (Kirchensteuer) is 8% of the wage tax in Bavaria and Baden-Württemberg and 9% in the other federal states, and it is withheld only for registered church members, driven by the ELStAM church-tax feature.

ELStAM, electronic wage-tax features

ELStAM (elektronische Lohnsteuerabzugsmerkmale) is the set of electronic wage-tax deduction features the employer retrieves for each employee. It holds the employee's tax class (Steuerklasse), child allowances (Kinderfreibeträge), any registered allowances (§39a EStG) and the church-tax feature, and the employer pulls this data electronically each month to calculate the correct withholding. From 1 January 2026, private health and long-term-care insurance contribution data is also transmitted into ELStAM, so that privately insured employees' contributions are reflected automatically in the monthly run.

Employer registration, the Betriebsnummer

Before you can file social-security reports, you need a Betriebsnummer, an 8-digit employer identifier issued by the Betriebsnummern-Service of the Bundesagentur für Arbeit. It is required from your first hire. You apply online, and it is usually assigned automatically, with the number issued by post in around three working days. The Betriebsnummer appears on all social-security notifications and contribution statements, and it can be requested by the employer or by an authorised representative such as a tax advisor. Crucially, it is its own identifier: a Betriebsnummer is not the same as a Steuernummer and not the same as a VAT ID (USt-IdNr). If you also need those tax numbers, see VAT registration in Germany.

What gets filed every month

Each payroll run produces a defined set of outputs:

1. The Lohnsteuer-Anmeldung to the Finanzamt by the 10th (§41a EStG).
2. Beitragsnachweise (contribution statements) to each employee's health-insurance fund, which acts as the collecting agency for all four branches.
3. DEÜV / SV-Meldungen (social-security registrations and notifications).
4. The net-pay transfer to each employee.
5. A payslip for each employee.

New hires must be registered with the first payroll run, and at the latest within six weeks of starting. Missing these is where small employers most often run into trouble.

Do you need a German entity to run payroll?

To file social-security reports you need a German employer presence and a Betriebsnummer. A GmbH, a branch or a registered subsidiary qualifies. A foreign company without a German establishment typically runs German payroll through a local provider or an employer-of-record instead. Be aware that the precise obligation depends on permanent-establishment and posting rules: simply having staff working in Germany can create German payroll duties even without a formal entity, so a Steuerberater or legal review is warranted before you decide the route. If you are still forming the entity, that step comes first; see company formation in Germany, because you need a GmbH or branch and a Betriebsnummer in place before payroll can start.

DATEV, the German payroll standard

DATEV is a Nuremberg-based cooperative (Genossenschaft), founded in 1966, of tax advisers, auditors and lawyers. Its payroll product, DATEV Lohn und Gehalt, is the de-facto standard in German payroll, used by the large majority of tax-advisory firms, with more than 14 million monthly salary calculations processed on a DATEV basis. Working with a DATEV-based provider keeps payroll integrated with German bookkeeping and tax filing, which matters because payroll data feeds straight into the company's financial statements. That integration with general bookkeeping is covered in our accounting and bookkeeping services.

Why outsource, and why English-speaking?

German payroll mixes three bodies of law: tax law (Lohnsteuer under the EStG), social-security law (multiple funds and DEÜV reporting), and labour law (minimum wage, contracts), all conducted in German and all penalty-bearing on a tight monthly cadence. For a handful of employees, building an in-house Lohnbuchhaltung is usually more expensive and more fragile than outsourcing. An English-speaking provider removes the language barrier on Finanzamt and Krankenkasse correspondence, transfers the compliance risk to a specialist, and gives you a single point of contact who understands both German rules and your reporting needs in English.

Our payroll service (the offer)

We run your German payroll as an English-speaking partner across the full GmbH lifecycle: setting up the Betriebsnummer, running the monthly calculation, producing payslips and Beitragsnachweise, filing the Lohnsteuer-Anmeldung as your clerical agent and handling the DEÜV reporting. Here the division of labour is firm and non-negotiable: we run your German payroll (the mechanics) and work with a licensed German Steuerberater for reserved wage-tax matters. Under the StBerG, advice on wage tax and the legally reserved acts belong to the licensed Steuerberater; we do not hold ourselves out as a Steuerberater and do not give reserved wage-tax advice. For that reserved advice, the engagement runs through our English-speaking tax advisor in Germany relationship.

Author: Anna Müller, Legal Consultant.

Next steps / get a quote

• For reserved wage-tax advice through a licensed Steuerberater, see our English-speaking tax advisor in Germany.
• For bookkeeping and financial statements that payroll feeds into, see accounting and bookkeeping services.
• For the employer-side cost-of-employment context, see German corporate taxes.
• If you still need an entity, start with company formation in Germany.

To get a payroll quote in English, book a consultation.