Foreign companies employing staff in Germany must stay up to date with annual changes in payroll-related regulations. In 2025, several important adjustments regarding wage tax (Lohnsteuer) and social security contributions have taken effect. Employers are required to consider these changes when calculating salaries and updating their payroll systems.
Germany remains an attractive location for international companies expanding their operations or hiring remote employees. However, German labor law and payroll regulations are complex and require thorough preparation. Especially in 2025, some new regulations affect the hiring process.
The ongoing economic downturn in Germany in 2025 is putting pressure on many companies, including subsidiaries and branches of foreign enterprises. In some cases, reducing personnel becomes unavoidable. However, German labor law provides employees with strong protection against dismissal. Employers must carefully observe legal requirements when terminating employment contracts to avoid disputes and legal consequences.
Short-time work (in German: Kurzarbeit) is a well-known instrument in Germany that allows companies to temporarily reduce the working hours of employees due to economic difficulties. The goal is to prevent dismissals during periods of lower workload. The German Federal Employment Agency (Bundesagentur für Arbeit) compensates part of the employee’s lost income through the so-called Kurzarbeitergeld (short-time work allowance).
When employers implement personal protection measures or security installations for their employees, careful attention must be paid to the associated tax implications. Recently, the German tax authorities issued updated guidance on the treatment of such expenses. This article provides an overview of the key points for employers and employees.
As Germany faces economic challenges in Autumn 2024, many companies are experiencing reduced demand and are considering implementing short-time work, known as „Kurzarbeit,“ to mitigate financial strain while retaining their workforce. Understanding the current regulations and procedures is crucial for employers aiming to utilize this measure effectively.
The current economic situation in Germany is challenging. With the downturn in the economy during Autumn 2024, many companies are facing reduced revenues and are compelled to lay off employees to remain viable. For employers, navigating the legal and financial requirements during this period is critical, particularly in relation to the payment of severance packages and compliance with termination regulations. Below, we provide an overview of the key aspects employers must consider
As the festive season approaches, employers in Germany often consider organizing Christmas parties, distributing Christmas bonuses, and giving gifts to employees. It’s essential to understand the tax and social security implications of these gestures to ensure compliance and optimize benefits for both the company and its staff
Managing travel expenses correctly is an essential aspect of payroll and tax compliance for businesses …
In the context of international employee assignments, the timely flat-rate income taxation („Zeitnahe Pauschalierung der …