Employer Payroll Reporting Requirements in Germany

Does an employer relocating employees or sending employees on secondment to Germany have an obligation to register as an employer and pay payroll taxes in Germany?  If so, what are the filing requirements?

An Irish employer does have to register in Germany as employer in the following cases:

• In case the Irish employer does have its management, a permanent establishment or a permanent representative based on §§ 10 - 13 AO (German General Tax Code) in Germany as he qualifies then as domestic employer.
• A foreign employer does have to register as well in case of the supply of temporary workers within Germany (foreign lender).

The payroll accounting has to be in general electronically filed until the 10th day of the following month. Please note that the social security contributions are already due on the 3rd latest working day of the month.

What are the income tax rates in Germany?

In Germany the income tax rate is an increasing marginal tax rate within a progressive zone of 14 % up to 45 %.

How would travel and subsistence expenses from home country be treated if employee is required to be in Germany?

Expenses for the second residence are tax deductible with its actual costs, but limited to a maximum amount of €1,000 per month. Moving expenses are job-related expenses and therefore tax deductible when a second household is established, given up or changed provided that they are not privately motivated. Please note that maintenance of two households only applies if the employee maintains his own household outside the place of his primary place of employment and works at the place of his primary employment.

A trip back home is tax deductible once per week at 0,30 Euro per km distance between the taxpayer’s own household and the work location. This does not apply for journeys by air as these are usually tax deductible with its actual costs.

Please note that there exist additional job-related expenses that are tax deductible but this has to be checked in each case separately as there exist several requirements that have to be fulfilled. Therefore, we highly recommend to check that with us before doing something.

Are there any exemptions for workers coming from abroad? 

There do not exist any specific exemptions for workers coming from abroad.

For further information, please contact Daniela Kemmer Pape & Co. GmbH:

E: Daniela.Kemmer@pape-co.de

W: www.pape-co.de