Things to keep in mind while processing payroll in Germany: Employer of record services Germany
Germany is a wonderful alternative for a global firm wishing to develop into the area. It is strategically positioned for foreign investment and has one of Europe's largest economies. Germany was placed 22nd in the World Bank's Ease of Doing Business Index. In addition, the country has enjoyed rapid economic growth and has one of the lowest unemployment rates on the continent. One element that is consistent across sectors, from aerospace to healthcare, is payroll requirements. An employer of record services Germany can help you with such payroll processing requirements. Here are some requirements they focus on:
1. Collective bargaining agreement and work contracts
The regulations governing payroll are governed by German labour laws. In Germany, for example, an employee's freedom to join a labour union, council, or other collective bargaining agreement is protected. Work contracts are required for all employees upon hire, regardless of whether they are covered by a collective bargaining agreement.
2. Wages and benefits
A normal German workweek is 40 hours, however it cannot be more than 48 hours, and overtime cannot be more than 12 hours each week. In 2021, the German minimum wage will be EUR 9,50 per hour ,with a few exceptions for students, minors, and those who have been unemployed for more than six months. In the future years, the minimum wage will be raised. There are a number of industry minimum salaries in addition to the statutory minimum wage. These are negotiated in a collective agreement between trade unions and employers, and then proclaimed generally binding by legislators. Minimum industry salaries apply to all enterprises in the sector, even those that are not covered by collective bargaining agreements.
3. Taxes and social security
In Germany, all employees are taxed on their earnings. Employers having a registered office or place of business in Germany are required to deduct wage tax from employees' salaries and pay it to the tax office on their behalf.
4. Vacations, leaves and brakes
Employees have the right to a thirty-minute break after four hours if they have worked for more than six hours in a row, and employers must grant time off for vacations, maternity and paternity leave, and sick leave. A 45-minute break must be taken after nine hours.
Payroll requirements in Germany are constantly changing, and businesses who fail to comply risk facing penalties or punishments. PEO Germany can help you remain on top of regulations. They submit wage tax and social security contributions filings and accompanying payments to the appropriate authorities straight from their payroll system.
It's simple to see why many German businesses choose to outsource their payroll. Employer Of Record Germany saves you money and time while ensuring that your employees are paid, tax returns are submitted, and social security responsibilities are met completely and on time.