Contents
Legal Framework for payroll accounting
A pay slip or salary statement is the right of every employee. Every employer is therefore obliged to issue a monthly payslip. The legal basis of the payroll system has three pillars:
- GewO: The remuneration components are regulated in the so-called remuneration certificate regulation in Section 108 of the German law on trade, commerce and industry regulation.
- EStG: The law on income tax, naturally, sets out how income tax classes are determined.
- SGB: The social security code governs the statutory contributions for health, aged care, pension, and work and accident social insurance.
What info must a payslip in Germany contain?
Section 108 (1) of the GewO (trade, commerce and industry regulation law) sets out all the information that a payslip must contain. This includes general information on the employee as well as individual remuneration components (listed according to the order in the payroll):
The header of the payslip
- Name and address of employer
- Name, address and date of birth of the employee
- Insurance number, tax class and tax ID Employee
- Start and, if applicable, end of employment
- Period of certification
The central part of the payslip
- Gross wage or salary
- Remuneration in kind or benefits in kind
- Capital-forming benefits
- Contribution to the company pension scheme, if applicable
- Tax allowances
- Church tax, if applicable
- Employee’s social security contributions
- Personal deductions
- Expense allowances
- Amount paid out
Frequently asked questions about payslips in Germany
Quite a few employees need help deciphering their payslips and finding the information they need. So we’ve put together a guide on all the abbreviations here and the answers to some common queries below:
Where can the pension insurance number be found?
The Rentenversicherungsnummer (pension insurance number) doesn’t appear on employee payslips, but on the social security notification letter they receive once a year. This number consists of twelve characters (one letter and eleven digits). The Rentenversicherungsnummer (which also appears as RV) is often confused with the Sozialversicherungsnummer (national social security number). Most of the time, the RV number includes, among other things, an employee’s date of birth.
Where on the payslip can I find my tax ID?
The Steuer-ID (tax ID) can be found in the centre of the header of the payslip. It consists of 11 digits and is consists of data such as first and last name, date of birth, place of residence and other personal information.
Where is my social insurance (SV) number?
The Sozialversicherungsnummer (social insurance number) is made up of numbers and letters and can be found in the top left-hand corner of the payslip in the “SV-Nummer” box. The Sozialversicherungsnummer is often confused with the Rentenversicherungsnummer (pension insurance number), as this also contains the date of birth and the first letter of the name at birth and can be found on the same documents.
Where are my leave days listed?
Employees can find their accounted leave days on their payslips in the main section directly under gross pay, above deductions.
More about payslips for:
When will I receive my annual statement?
The employer must prepare an annual statement once a year from each employee who has to pay compulsory insurance. This statement should ideally be completed by 31 December, but the hard deadline is 15 April of the following year.
Where on my payslip can I find travel expenses?
Travel costs include travel, accommodation, subsistence and incidental travel costs. Since 2008, all these travel expenses have been grouped as “business-related out-of-town activities”. In principle, different flat rates apply to the reimbursement of travel expenses, which is why they do not necessarily have to be shown on the payslip.
How are wages or salaries calculated?
Each payslip is structured according to a scheme in which allowances and other payments are first added to the gross earnings. The gross amount is what is subject to tax and social security contributions. That is, income tax, church tax and social insurance contributions are deducted from this total. Then the employee’s contributions, advances, benefits in kind or other payments are deducted from the net remuneration. The final result is the amount paid to you. All the elements that lead to the calculation of your paid remuneration are set out below:
Breakdown of a gross salary or wage:
+ Employer capital-forming benefits (vermögenswirksame Leistungen)
+ Supplements (Zuschläge), e.g. overtime, night work
+ Bonuses, sales commissions (Prämien, Umsatzprovisionen)
+ Other remuneration (sonstige Bezüge), e.g. christmas or holiday bonus, etc.
= Gross salary or wage subject to tax and social insurance contributions
– Wage tax (Lohnsteuer)
– Church tax (Kirchensteuer), if applicable
– Solidarity surcharge (Solidaritätszuschlag), if applicable
– Social insurance/security contributions (Sozialversicherungsbeiträge)
– Health insurance (Krankenversicherung)
– Pension insurance (Rentenversicherung)
– Unemployment insurance (Arbeitslosenversicherung)
– Nursing care insurance (Pflegeversicherung)
= Net salary or wage
– Employee capital-forming benefits (vermögenswirksame Leistungen)
– Advances (Vorschüsse)
– Benefits in kind (Sachbezüge)
– Other deductions, e.g. payments on account, garnishments, etc.
= Amount to be paid out
The starting point for every payslip is the outsourced or in-house bookkeeper. If something doesn’t make sense or there is a mistake, your employer’s payroll accountant should be the first point of contact.
Want to know more?
We have a master list of all our articles about accounting in Germany: Master list: Accountancy
