Forming A Company And Running A Payroll In Germany

1. Forming A Company And Running A Payroll In Germany Tel: +49 (0) 2173 / 2039568, Fax: +49 (0) 2173 / 206963 mail@payroll-services-germany.com

2. Forming A Company And Running A Payroll In Germany Forming a Company : There are several ways in which one can start a company in Germany. One of the most common ones is the ‘Limited Liability company’, the GmbH. The second way is to establish a ‘German public limited Company’ (AG) . Some more legal entities are the Sole proprietorship and Partnerships. The Germany LLC company (GmbH) is the most common way to start a company, particularly if an international company is setting up a subsidiary. Tel: +49 (0) 2173 / 2039568, mail@payroll-services-germany.com

3. Forming A Company And Running A Payroll In Germany There is no restriction about the sector for such a company. In Order To Start An LLC Company, It Should : 1. Have one director and one shareholder 2. the corporate bank accounts. Deposit a minimum share capital of 25,000 Euros in 3. Enter the company in the German Trade register. Tel: +49 (0) 2173 / 2039568, mail@payroll-services-germany.com

4. Forming A Company And Running A Payroll In Germany About Starting A Partnership Company : This type is commonly used for small and family-owned businesses. Also, foreign investors tend to prefer limited- liability KG partnerships. • partnership two partnership types; general oHG or limited KG • GmbH company must have two partners, one of which also can be a Tel: +49 (0) 2173 / 2039568, mail@payroll-services-germany.com

5. Forming A Company And Running A Payroll In Germany The Main Features Of A Sole Trader/Proprietor For An Enterprise : This is the most simple and least regulated business entity in Germany. • Has unlimited liability for all debts • Profits are subject to individual income tax rates Tel: +49 (0) 2173 / 2039568, mail@payroll-services-germany.com

6. Forming A Company And Running A Payroll In Germany Running Payroll in Germany : Germany is an active European Union country, it is also the 4thlargest economy in the world. It consists of 16 federal states which are further divided into 20 regions. There are specific rules for payroll and taxation in Germany, depending upon whether your company employs foreign nationals or local Germans. Tel: +49 (0) 2173 / 2039568, mail@payroll-services-germany.com

7. Forming A Company And Running A Payroll In Germany The primary concerns for a foreign company that needs to comply with tax laws in Germany are : Individual income tax (IIT) for employees in Germany, social and health insurance costs, payroll tax, sales tax, accident insurance, withholding tax, business tax and permanent establishment concerns. There are several factors involved in running Payroll. We are highlighting some important ones: Tel: +49 (0) 2173 / 2039568, mail@payroll-services-germany.com

8. Forming A Company And Running A Payroll In Germany 1. is € 8.84. If this is violated then there are fines of between €30,000- €500,000. Minimum Wage : Per hour, the minimum wage there 2. week are 48 hours. Generally, this doesn’t go beyond 40 hours on an average, however. Employees are mandated a break of 30 mins after working 6-9 hours. Working Hours : The maximum working hours per 3. working overtime in their employment agreement. But these overtime hours must not exceed 12 hours in a week. Working Overtime : There has to be a provision of Tel: +49 (0) 2173 / 2039568, mail@payroll-services-germany.com

9. Forming A Company And Running A Payroll In Germany 4. employers withhold 1.5% of employees’ total monthly earnings for unemployment insurance. Besides this, employers withhold an average of 7.3% of total employee wages for health insurance. This is variable based on the total income. However, the maximum annual taxable income is €50,850. Unemployment & Health Insurance : In Germany, 5. Fringe Benefits : While labour laws do not require other payments besides wages, some employers provide fringe benefits. Examples of fringe benefits are gratuities, profit- sharing, use of a company car, supplemental pay, and commissions. Tel: +49 (0) 2173 / 2039568, mail@payroll-services-germany.com

10. Forming A Company And Running A Payroll In Germany 6. holidays, employers must provide leaves for vacation, maternity, paternity, and sick leave to its employees. Annual Leave & Vacations : Apart from official 7. assets are charged at a flat rate of 25% and must be withheld at the time of the payout. Tax on Capital Assets : Taxes on income from capital 8. social insurance programs. Both employers and employees share the burden of social tax responsibility. Social Taxes : This is essentially to cover various Tel: +49 (0) 2173 / 2039568, mail@payroll-services-germany.com

11. Forming A Company And Running A Payroll In Germany Moreover, employers also withhold a mandatory “solidarity surcharge” of 5.5% from each employee’s wages for social programs. In this way, several procedures and frameworks exist to make the running a payroll and starting a company practical and simple for a person. It important to research and talk to the officials more in depth to understand the nuances and begin the work you are interested in starting up! Tel: +49 (0) 2173 / 2039568, mail@payroll-services-germany.com