Social security contributions for employees: This is how they are calculated

Compensation earned by employees in an employment relationship is generally subject to social security contributions.

What do I need to know about this?

Employers are obligated to accurately remit social security contributions, both the employee and employer shares.

How are social security contributions calculated, what special regulations apply to low-income earners, what does the March clause mean? What about special payments or periods without earnings? Are employee and employer contributions always equal? These are questions that employers must address. The key is the correct assessment of the earned compensation. If errors occur in the calculation, social security institutions can retroactively claim contributions. Claims against the employer expire no earlier than four years after the end of the calendar year in which they are due.

Where can I find information on the correct calculation?

The German Pension Insurance (Deutsche Rentenversicherung) carriers are responsible for conducting social security audits in companies. To assist employers on this topic, the German Pension Insurance provides the brochure "To the Point: Contributions" (Broschüre „Auf den Punkt gebracht: Beiträge“).
The brochure contains fundamental and comprehensive information on how social security contributions are calculated based on the relevant compensation. This helps prevent errors that could lead to audit objections in advance. The procedures and calculation principles are explained using many examples, making the processes easily understandable. Important terms are highlighted in blue throughout the text and are sometimes repeated at the margins with the same or a similar term. A compensation catalog at the end of this brochure lists frequently occurring types of compensation and helps employers assess them correctly from a social security perspective. The brochure is also extensively linked, allowing easy access to all cited paragraphs, Federal Social Court rulings, issues of the magazine "summa summarum," or other exciting and informative content with just one click.

Note

The German Pension Insurance provides additional guides for companies with information on insurance obligations and exemptions for various groups of individuals, which are updated annually:

• Auf den Punkt gebracht: Meldungen (To the Point: Reports)

• Auf den Punkt gebracht: Prüfung von A – Z (To the Point: Audit from A to Z)

• Auf den Punkt gebracht: Versicherung (To the Point: Insurance)

2023-11-24