Payroll taxes
in Germany.

SALARY PAYMENT IN Euro (EUR, €)

CONTRACT LANGUAGES German / English

PAYROLL TAX 20.66%

PAYROLL CYCLE Monthly

TIME TO HIRE 48 hours

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Germany

What is the average employer tax rate in Germany?

The corporate tax rate in Germany is 15%, but additional charges such as a solidarity surcharge and trade tax make the total level of contribution around 30%.

Horizons’ Germany Employer of Record & PEO can provide assistance to your business as you navigate the complicated tax laws in the country.

What is the average employee tax rate in Germany?

Germany has a progressive tax rate system for workers. The average employee tax rate in Germany ranges from 0% to 45% based on income level.

Germany – Individual Income Tax

Taxable Income (EUR)	Tax rate 2023
0 – 10.908	0%
10.909 – 62.809	14% – 42%
62.810 – 277.825	42%
277.826 +	45%

Employer contributions in Germany

Employer contributions in Germany can reach around 19% of the employee’s salary.

A typical breakdown of employer contributions is:

Germany – Employer contributions

Contribution item	Contribution rate
Pension Insurance	9.3%
Unemployment Insurance	1.2%
Health Insurance	7.3%
Long-term Care Insurance	1.5%

Employee contributions in Germany

Employee contributions in Germany can reach around 19% of the salary. And they are the same as the employer contributions

A typical breakdown of employee contributions is:

Germany – Employee contributions

Contribution item	Contribution rate
Pension Insurance	9.3%
Unemployment Insurance	1.2%
Health Insurance	7.3%
Long-term Care Insurance	1.5%

Hiring in Germany, Made Easy

Your business can easily hire employees in Germany without opening a local entity. We handle local employment law, complex tax regulations, and international payroll in 180+ countries worldwide. All you need to do is focus on your business.

FAQs

What is the tax bureau of Germany called?

The Tax Info Center (Steuerliches Info-Center – SIC) at the Federal Central Tax Office (Bundeszentralamt fur Steuern – BZSt) is the entity that provides tax information and works as the tax bureau of Germany.

Is there an employer payroll tax contribution in Germany?

In Germany, the payroll tax is called solidarity tax, and this is 5.5% of the employee’s salary.

How does the payroll tax system of Germany work?

Payroll tax in Germany is tax that comes out of the employee’s salary every pay check. The employer will withhold the correct amount on behalf of the employee.

Germany has a progressive tax rate system, meaning the more income someone makes, the more they will be taxed. In Germany the tax rate for employees Is between 0% and 45%.

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Client Testimonials

"As a seed-stage, London-based startup, we were initially hesitant to expand internationally due to the administrative workload involved. Horizons took the headache out of the process, allowing us to hire a team of software engineers in Germany."

Gabor SzedlakCo-founder & COO at MindLabs (UK)

"I truly appreciated the thoroughness and the professionalism of Horizons personnel while we hired internationally with them. They were knowledgable on all subject matters pertaining to international employment."

Gary PaskyVP Software Development, PICS ITech (USA)

"On deciding to begin commercial activities in Asia Pacific, we needed a provider to handle the employment and remuneration of our workforce. With Horizons the result was fast, efficient, and fit-for-purpose. We recommend Horizons as an EOR provider.”

Chris MorrellManaging Director, Schaeffler Group (Germany)

"The collaboration with the Horizons team is excellent. Both our local employee as well as our HQ in Germany are more than pleased with the support provided and the simplicity of the service. We can highly recommend the Horizons solution to anyone."

Christoph EngelbertCo-Founder & CTO, Clevabit (Germany)

"We needed an EOR that could provide expert support for payroll in APAC. We are pleased with Horizons’ expertise and the fact that they are flexible, responsive, and easily accessible from Belgium. They were able to provide services within the short timeline we required."

Katia FlamandHuman Resources, Devian Chemicals (Belgium)