A pay slip is a piece of paper that gives your salary and wages in full detail. You will see many deductions made out of your salary. Your employer is legally responsible for giving you your pay slip. There are several abbreviations and words in your German pay slip. You must know about these words and abbreviations to understand what you have earned. What deductions are made out of your earnings? In addition, what do they mean?
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German Deductions Out of Your Salary or Income
When you see your first pay slip, you will see several deductions made out of your income. These deductions are related to taxes, social security contributions, social charges, etc. These deductions are usually 40% of your gross income. The remaining amount is the salary you will receive in your German bank account. These deductions are according to your income, insurance, and tax class.
You can estimate your net salary with the German salary calculator to give you the best idea about your salary. The detailed working on your salary will make you able to make your job decision.
Insurance in Germany
Insurances are expensive in Germany. The most important insurance is personal liability insurance. It is not a deduction from your income, but you must have it in Germany. You can purchase this insurance privately.
Guide to Read your German Pay slip
Every German employee will receive a pay slip detailing their salary and deductions at the end of the month. All companies use different payroll systems and software. The format can be different for all companies. Your pay slip will have all the details of your earnings, salary, bonuses, social security contributions, and deductions like taxes. Your pay slip will be several abbreviations as Germans love to use them.
Personal Information
At the top of the German pay slip, there is an employee’s personal information. It might include the employee’s name, address, personal number, date of birth, and religion. It will also explain if the employee is to pay church tax.
What is the most Important Holiday in Germany?
It’s tough to choose which German holiday is the most important. Religious festivals are highly important for Catholics, but Easter and Reformation Day are more significant for Protestants. Everywhere across Germany, the political and cultural significance of Unity Day is remembered. Yet, for almost everyone, the holidays in Germany are particularly memorable.
- Arbeitnehmer Nr. or a Personal-Nr. Represents the employee number
- Geburtsdatum represents the date of birth.
- StKl. or Steuerklasse is related to the tax class.
- Ki.Frbtr. (Kinderfreibeträge) or ZKF (Zahl der Kinderfreibeträge) is the number of tax exemptions for children usually one per child
- Konfession or Rel. (Religion) represents religion. RK stands for Roman Catholic; EV stands for Protestant; and — presents no religion)
- Freibetrag, Steuerfr, or Bezug (Steuerfreibezug) is the tax-free allowance
- St. Tg. (Steuertage) represents the tax days. It is usually the appropriate time. For a full month, it is usually 30 days)
- SV-Nummer (Sozialversicherungs nummer) or RV-Nummer (Rentenversicherungs nummer) is the social security number
- Krankenkasse represents your health insurance fund.
- KK % is your health insurance contribution rate.
- Eintritt or Eintrittsdatum is the date of hire.
- SV-Tg. Sozialverischerungstage is social security days. It is the appropriate time. For a full month, it is usually 30 days.
- BGRS or SV Schlüssel / Beitr.gr. KV / RV / AV / PV are the social security codes that indicate your contribution level. The number one is equal to the full contribution.
- Steuer – ID or Lohnsteueridentifikations nummer (Id Nr.) is your tax ID number
- Url. Anspr. (Urlaubsanspruch) are the vacation days as per your contract with the company, organization, or employer. By law, it is 20 days, but up to 30 days are common.
- Url. Tg. gen. (Urlaubstage genehmigt) are the approved vacation day’s year to date YTD.
Earnings and Salary Information
Below are the items that you may find on your payslip. It is the most interesting part of the payslip. It includes the gross salary of the employee and all items regarding income, but you don’t need to see all items on your payslip. A few items may appear on your salary slip in a few months, like bonuses.
- Brutto Bezüge are your gross earnings
- Bezeichnung is the description against your salary items.
- Gehalt is your monthly base salary
- Geldw. Vorteil or Sachbezug are the non-cash benefits, subject to the total tax and social contributions
- VL AG (Vermögenswirksame Leistungen Arbeitgeberanteil) is the voluntary employer contribution to your savings plan
- Betr. AV or BAV (Betriebliche Altersvorsorge) is also another employer contribution to your savings plan
- Einmalbezug or Einmalzahlung is a one-time bonus, for example, for Christmas, holidays, or achievements.
- Urlaubsgeld is the holiday pay
- Gehaltsumwandlung is the deduction for the tax or any other social benefits.
- ST-frei (Steuerfreie Bezüge) are the tax-free benefits
- Gesamtbrutto or Steuer-Brutto is the total gross salary but only the taxable amount)
- Nettoverdienst or Auszahlungsbetrag is the net salary paid to your bank account listed at the bottom of your payslip
Information Related to Taxes
The tax bracket and factor depend upon the marital status of the employee. Other tax classes are single, widowed, married with class five, four, three, and married with a part-time job. Your employer will automatically deduct taxes from your salary to pay these taxes to the German tax authorities. These taxes include;
- Lohnsteuer (LSt.) – The Income tax calculated progressively is usually between 14% – 42%
- Kirchensteuer (KiSt.) – The Church tax depends on whether you have a confession. It is usually between 8% – 9%.
- Solidaritätszuschlag – The Solidarity surcharge is paid by all states of former West Germany. It is a maximum of 5, 5%). From 2021, you only have to contribute if you earn more than 73.000 euros gross per year.
- Steuerrechtliche Abzüge is the sum of all tax reductions.
Social Security Contributions
These contributions are both by the employer and the employee. Employer and employee both pay 50%. You may find these contributions with below terms or abbreviations.
- SV (Sozialversicherung) is the social security insurance.
- KV – Beitrag (Krankenversicherung) is the contribution to statutory health insurance (14, 6% state contribution + 0, 69-2, 5% contribution for your health insurance fund – TK example)
- PV – Beitrag (Pflegeversicherung) is the contribution to long-term care insurance (3, 05-3, and 30%)
- RV – Beitrag (Rentenversicherung) is the contribution to pension insurance (18, 6%)
- AV – Beitrag (Arbeitlosenverischerung) is the contribution to unemployment insurance (2, 4%)
- Zusatzbeitrag is any additional contribution.
- SV – rechtliche Abzüge is the sum of all social security reductions, usually 50%
- SV – AG – Anteil (Sozialversicherung Arbeitgeber Anteil) is the sum of all social security contributions paid by the employer, usually 50%
YTD or TD Income
A bottom section on your pay slip represents the sum of total earnings and deductions of the year to date or to date. This part gives the final salary or the net pay. This includes the bank account number where your employer will deposit your salary.
Do Not Throw Away Your Pay slip
You must keep a copy of your pay slip either in your record file or online. Your pay slip is the document that you may use as proof of the total number of years you have worked in any company or organization. These documents will also tell about the social security contribution you have paid during your timespan in an organization.
This is important, and you will need this in retirement. If you do not receive your pay slip, you are responsible to ask your employer to provide you with your document. Your employer will keep your pays slips for almost six years. If you have misplaced any of your pay slips, you can ask your employer for a duplicate pay slip. You will need your pay slips each year at the time when you need to file your tax returns.
Final Words
German pay slips are full of words related to the comprehensive tax and social security system. Pay slip understanding is necessary for all employees working in Germany. You may receive personal benefits out of the scope of the above guide. Your employer and the human resource department may also guide you about your pay slip.
