News (October 9th, 2008)

Unemployment contribution

The government has decided to reduce the contribution to the unemployment insurance from 3.3 % to 2.8 % as of January 2009.

New health fund

Germany has 210 public health insurance companies with different contribution rates ranging from 12.5 % to 16.5 %. The average contribution rate is around 14.9 % of the gross salary up to 3,600 Euros per month. The first 0.9 % of the contribution rate is paid by the employee; the rest is divided equally between employee and employer. Therefore, the average contribution rate was 7.9 % for employees and 7.0 % for employers. This partitioning between employee and employer continues to be in force. Instead of different contribution rates, the government has fixed a unique contribution rate of 15.5 %.

As of January 1st, 2009, the health fund will collect and distribute the funds to the different health insurances. Until 2008, health insurance companies have set their own contribution rate, collected the health insurance contributions and made the necessary payments. As of 2009, they transfer the contributions to the health fund. Afterwards, the health fund pays the health insurance companies a lump sum per insured person plus a supplement depending on age, sex and sickness. If the funds are not sufficient, the health insurance company has to collect the funds directly from the insured persons, up to a maximum of 8 ? per month without an income check. If the health insurance needs more than 8 Euros per month, the income of the insured persons has to be checked. Up to 1 % of the income with a maximum of 36 Euros per month can be collected.

Child benefits

As of January 2009 on, the child benefits will rise about 10 Euros for the first and second child and about 16 Euros for every additional child. The child benefits will then be as follows:
1st and 2nd child164 Euros per month
3rd child 170 Euros per month
from the 4th child on 195 Euros per month

Nursing insurance

The government voted a reform of the nursing insurance which came into force July 1st, 2008:
1.The contribution will rise from 1.7 % to 1.95 % of gross salary up to a monthly salary of 3,600 Euros. The supplementary contribution of 0.25 % for those em-ployees over age of 23 without any child remains unchanged.
2.The benefits for home nursing will increase as follows :
degree of
dependanceBenefits if nursing by a professional person (in EUR per month)Benefits if nursing by a family member (in EUR per month)
Category Iprogressively from 384 ?
to 450 ? in 2012 progressively from 205 ?
to 235 ? in 2012
Category IIprogressively from 921 ?
to 1.100 ? in 2012 progressively from 410 ?
to 440 ? in 2012
Category IIIprogressively from 1.432 ?
to 1.500 ? in 2012 progressively from 665 ?
to 700 ? in 2012
3.The benefits for nursing in a nursing home will only increase for people in cate-gory III progressively from 1.432 ? to 1.550 ? in 2012
4.Persons suffering from dementia will receive benefits, even if they are not de-pendant according to the legal definition.
5.Employers with 10 or more staff: Employees who become responsible for a de-pendant person have the right to be released from work for 6 months without pay and to come back to work after this period.

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Germany: Social security contributions are due earlier

Until December 2005, social security contributions have been due the 15th of the following month. From 2006, they have to be paid at the following dates:

Month Due	day	Month due	day
January	27	July	27
February	24	August	29
March	29	September	27
April	26	October	28
May	29	November	26
June	28	December	24

As the contribution report has to be sent to the social security authorities three days before the payroll will be edited in Germany every 20th of the month or the Friday before the 20th if this date is a Saturday, Sunday or bank holiday.

Important: If we do not receive any information about payroll modifications, before this date, the payroll will be prepared with the data of the preceding month.

We kindly ask all our clients to transfer the funds before the above mentioned dates. Tax payments are still due the 10th of the following month.

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Germany: New social security ceilings

In 2008, the monthly social secrutiy ceilings (above which no social security contributions are due) for the calculation of the social security contributions are:

ceiling in Euros	West	East
sickness and dependance	3,600	3,600
pension and unemployment	5,300	4,500

The contribution rates have not been modified. Normally, 50 % of the contributions are due by the employers,
50 % by the employees.

	employer contribution	employee contribution
sickness	5.9 % to 7.3 %	5.9 % to 7.3 % plus 0.9 %
dependance	0.975 %	0.975 % plus 0.25 % if older than 23 years without children
pension	9.95 %	9.95 %
unemployment	1.65 %	1.65 %