- Michael Clarke
Introduction to German Payroll
A question that comes up frequently in Germany is the concept of the 13th month bonus, there are comparable features of this in Belgium and the Netherlands. It is though something of cultural expression versus an actual requirement as such.
Specifically for Germany the 13th month can be an annual bonus but the employment contract will specifically express such terms and conditions, hence the essential need for a local employment contract consistent and compliant with German law.
Employer social taxes as a general guide are at 20% of the employee base salary. Employee social taxes generally equal the employer contribution but are paid separately to the four different elements that the social taxes are intended to cover, namely health insurance, pension, unemployment insurance and nursing care. There are caps at each level.
Michael Clarke, Managing Partner
V-Sub International Payroll