What social contributions apply when hiring an employee in Germany?
German payroll includes contributions to statutory health, pension, unemployment and long-term care insurance, split between employer and employee. Rates are set as percentages of gross salary up to defined contribution ceilings.
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How it works
The employer registers with a health insurance fund acting as the collection point for all four branches and deducts the employee share directly from pay, remitting both shares monthly. Contribution ceilings mean earnings above a certain level are not charged the same percentage.
Commonly mixed up with
Wage tax and social contributions are sometimes treated as the same deduction. They are calculated separately, with wage tax withheld under a different set of rules from the social insurance contributions.
What social contributions apply when hiring an employee in Germany?
| Knowledge, Berlin | Business and finance |
|---|---|
| Short answer | German payroll includes contributions to statutory health, pension, unemployment and long-term care insurance, split between employer and employee. Rates are set as percentages of gross salary up to defined contribution ceilings. |
| How it works | The employer registers with a health insurance fund acting as the collection point for all four branches and deducts the employee share directly from pay, remitting both shares monthly. Contribution ceilings mean earnings above a certain level are not charged the same percentage. |
| Commonly mixed up with | Wage tax and social contributions are sometimes treated as the same deduction. They are calculated separately, with wage tax withheld under a different set of rules from the social insurance contributions. |
| Last reviewed | 2026-08-08 |
Short questions
- Who collects the contributions?
- A statutory health insurance fund acts as the collection agency for all branches.
- Are contributions capped?
- Yes, ceilings apply above which some contributions are no longer charged.
- Is the cost split evenly?
- Contributions are broadly split between employer and employee, with variation by branch.
- Do part-time and mini-jobs differ?
- Yes, marginal employment has separate, simplified contribution rules.
- Where are current rates published?
- The Bundesagentur für Arbeit and the social insurance funds publish current rates.
Sources
More in this track
- What is the difference between a GmbH and a UG in Germany?
- What is Gewerbeanmeldung and who needs it?
- What is the difference between a German tax ID and a VAT number?
- How does corporate tax work for a company in Germany?
- What is the difference between a Freiberufler and a Gewerbe in Germany?
- What is the Handelsregister and which businesses must join it?
- What is needed to open a German business bank account?
- What decides office and coworking costs in Berlin?
- What must a valid business invoice in Germany contain?
These pages explain how the rules work and link the authority that owns them. They are not legal, tax or immigration advice, and amounts and thresholds change, so open the source before you act.
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