There are several specific rules for payroll and taxation in Germany, depending upon whether a business employs overseas people or local one. The main concern for an overseas company that requires to comply with tax laws here are IIT (individual income tax) for employees, social and health insurance costs, sales tax and payroll tax, withholding and business tax, accident insurance and permanent concerns.
In Germany, a remote payroll is where an overseas company such as a non-resident company or payrolls a resident employee here. For a non resident company, one option is to payroll its employees is to use a completely outsourced service.
Local payroll administration
You have to register your company here under one of the forms available but want to have another company administrator it's payroll. It can be done through payroll service provider and note that your company is still completely responsible for compliance with employment, payroll and tax in Germany, immigration regulations. You can outsource the payroll calculations, payment and fillings to the payroll company.
Internal payroll
Bigger companies that want to run their local payroll for all employees and workers both local and foreign. They have to complete incorporation, register their business and then hire the required staff so as to accomplish this. Also, there will be a need for in country human resource personal who has the background required to manage a payroll in Germany and can fulfill all tax, payroll and withholding needs. It carries a considerable cost and needs some knowledge of local employment and payroll regulations. Your company need a local accounting service firm and local counsel to make sure complete compliance with employment laws of Germany.
Working days and hours
In Germany, the working week id Monday to Friday and is usually a 40 hours week. But some businesses work a 37.5-38 hour week depending on some union agreements.
Completely outsourced payroll and employment
As a business owner, you can outsource the payroll and employees to a GEO here like shield GEO. This is possible for both local and overseas workers. This is easiest and fastest way to payroll staff in Germany. Do you know shield GEO manages all aspects of payroll for employees such taxes, social security payments, withholding and many other needs. Workers or employees are paid monthly with tax and social security deducted at source as well as paid to local authorities. Also, shield GEO will invoice the client monthly in advanced.
Reporting in Germany
Monthly- social security statements, withholding tax statements
Yearly- certificate of wages for each worker latest by February payroll of the following year, social security statement for each employee with January payroll of the following year but latest by 15 February of the following year, statutory accident insurance - employer - February following year, statement for persons with disabilities- employer statement-31st March following year.
