HR & Labor
Simultaneous to the GDPR taking effect on May 25 2018, Germany has put in place their federal data protection act "Bundesdatenschutzgesetz".
Effective January 6 2018, employees may request confirmation of:
a) Salaries of other employees
b) The business criteria of how pay rates are determined.
*Access is granted only for workers in the same comparable service who are of the opposite sex.
The deadline for 2018 tax filing has been extended from December 31 (in previous years) to February 28.
Rise in the threshold for health insurance, pension and unemployment.
Health Insurance: 53,100 EUR annually (from 52,200 EUR).
Pension & Unemployment: 78,00 annually (from 76,200 EUR).
Pension contribution rate drops from 18.7% to 18.6% (from the employee contribution).
The minimum wage is 1,473 EUR.
January 1: New Years Day
January 6: Epiphany
March 30: Good Friday
April 1:Easter Sunday
April 2: Easter Monday
May 1: Labor Day
May 10: Ascension Day
The employer contributes 9.35% of the gross income up to 78,000 EUR.
The employee contributes 9.25% of the gross income up to 78,000 EUR.
Half month of the regular wages are paid for every year the employee was in the company.
Advance notice must be minimum 4 weeks.
Must notify the employee with a written notice 4 weeks prior. If the employee has been in the company for over 20 years, the termination notification period becomes 7 months.
Employee is entitled to 6 weeks of paid sick days. Following, health insurance covers 70% of your last salary until you either return to work or have to retire because of your health.
Mothers are entitled to 6 weeks leave at full pay prior to their child's birth, and eight weeks at full pay after birth. In the case of premature or multiple births, 12 weeks paid leave is permitted.
Leave for both parents fall under the same system of "elternzeit" (parental leave), allowing both mothers and fathers job protection until their child turns 3. This includes step-parent sharing in the child's care.
There are 10 official paid public holidays.
Employees are entitled to 5 to 6 weeks paid vacation annually.
Members of officially recognized churches pay church tax as a surcharge on their income tax. The rates are either 8% or 9%, depending on the federal state where the individual resides.
Surcharges On Income Tax
To improve the economic situation and infrastructure in the five 'new' eastern states of Germany, the German government is levying a 5.5% solidarity surcharge tax for an indefinite period. The surcharge is imposed as a percentage on all individual income taxes.
In Germany, expats have few types of ways they can receive their salaries. Most of the companies pay their expats salaries based on their home country. However, there are companies that offer options for the expats - such as whole salary paid in host country or home country currency. Expats are also entitled to cost of living allowance by their companies which is the price difference between the goods and services in expat’s home country and Germany. Depending on the company’s policy, some expats are entitled to “hardship allowance” which is meant to cover any hardships faced by expats in Germany. Expats are also entitled to receive help with housing, depending on the company it can be assistance with rent, the difference between rent in the host and home country and some even offer free housing. Lastly, besides receiving social security allowances and benefits, expats in Germany are entitled to Germany Social Aid payments which includes child allowance.
Additional Employee Withholdings
1. Health care- Employer contributes 7.3% .
2. Unemployment - Employer contributes 1.5% of the regular wages.
3. Long term care- Employer contributes 1.025% of the regular wages.
1. Health care- Employee contributes 8.2%, salary ceiling for employee contribution is 48,600 EUR.
2. Unemployment - Employee contributes 1.5%. The salary ceiling is 71,400 EUR.
3. Long term care- Employee contributes 1.025%. The salary ceiling is similar as the one for health care.
VAT is 19% standard rate.