Tax & Payroll Processing

Dwyer Legal Law Firm assist its Company clients with the determination of income taxes to be paid and social security registrations to be made.

In Germany the employee’s income taxes and contributions must be deducted and paid directly by the employer to the German tax authority. The calculation of the same (and also the additional contributions to be paid by the employer directly) is usually done through a payroll or shadows payroll processing.

  • Income taxes:
    In Germany, the percentage of taxes depends on the income. The tax range varies from 14–45%. Solidarity tax is additional.
  • Social contributions:
    In Germany, each employee must be registered with the German social security system, which contains different branches: health insurance; long-term care insurance; accident insurance; pension fund insurance; unemployment insurance.

The German social security system is not financed by taxes but by separate contributions.

  • Contributions are about 40% of the gross salary
  • 50% is paid by the employee (salary deduction)
  • 50% is paid by the employer, on top of the gross salary

Further information can be found in our FAQ Knowledge Base.

Please do not hesitate to contact us, should you need any additional information on our services in the area of Tax & payroll.