Employees in Germany are subject to social insurance obligations, even if they work for foreign companies not based in Germany. Here are some tips for correct registration.
Key Points to Remember:
- EU Regulation: Employees working in an EU member state are subject to that country’s social insurance laws, regardless of where their employer is based. This is based on Article 21 (1) of EU Regulation VO (EG) 987/09.
- Exceptions:
- Temporary assignments (posting) from a foreign employer.
- Exception agreements between the social insurance agencies of the countries involved, managed by the German Liaison Office for Health Insurance Abroad (DVKA).
Steps to Register Employees for Social Insurance in Germany:
1. Apply for an Employer Number:
- Companies need an employer number from the Federal Employment Agency to employ workers in Germany.
- This number is essential for registering employees with the German social insurance agencies.
2. Choose a Health Insurance Provider:
- Employees in Germany can choose their health insurance provider.
- The employee must inform the employer of their chosen provider before starting employment.
3. Register with German Social Insurance:
- Use specific online registration procedures via payroll software approved for data exchange with health insurers.
- If no payroll software is available, use the SV-Meldeportal.
- Obtain the activity code from the Federal Employment Agency, required for registration.
4. Pay Contributions and Submit Proof:
- Employers must submit contribution proofs and payments on time using certified payroll software or tools like sv.net.
- Contribution proof must be submitted by the fifth last business day of the month.
- Payments are due by the third last business day of the month.
Further Information on Contribution Payments:
- Access a list of current due dates.
- Use the salary calculator to compute social insurance contributions.
- Learn how to send reports and contribution proofs via the SV-Meldeportal.
1. Appoint an Authorized Representative:
- From January 1, 2021, foreign employers must appoint an authorized representative in Germany to manage payroll records in German.
- The representative can be the employee or a third party (e.g., a tax advisor).
2. Submit Annual Reports:
- By February 15 of each year, submit a report of the employee’s previous year’s earnings to their health insurance provider for further submission to the pension insurance.
3. Transferring Contribution Payment to the Employee:
- Foreign employers can agree with the employee that the employee will handle the social insurance registration, submission of proofs, and payment of contributions.
- The employer remains liable for the payment of contributions to the social security agencies.
4. Register with ELSTER and SV-Meldeportal:
- Foreign companies can apply for a German tax number from the Neubrandenburg tax office.
- Use the tax number to obtain an ELSTER organizational certificate, then register with the SV-Meldeportal.
5. A1 Applications Without a German Tax Number:
- Foreign companies or self-employed individuals can use the BundID to submit A1 applications via the SV-Meldeportal.
- BundID is a central account for identity verification for online applications.
Our Recommendation
Managing social insurance obligations in Germany can be complex for foreign employers. It’s essential to follow the correct procedures to ensure compliance. For any questions or further assistance, feel free to contact us at info@payrollgermany.de.