News (December 07, 2007)

Unemployment contribution

The governmemt has decided that from January 1st, 2008 the contribution to the unemployment insurance will be reduced from 4.2 to 3.3 %. .

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Germany: New social security ceilings

In 2008, the monthly social security ceilings will be:

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

Normally, 50 % of the contributions are due by the employers, 50 % by the employees. The contribution rates are as follows:

	employer contribution	employee contribution
sickness	6.4 % to 7.9 %	6.4 % to 7.9 % plus 0.9 %
dependance	0.85 %	0.85 % plus 0.25 % if older than 23 years without children
pension	9.95 %	9.95 %
unemployment	1.65 %	1.65%

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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. In 2008, contributions for the actual month have to be paid at the following dates:

Month Due	day	Month due	day
January	29	July	29
February	27	August	27
March	27	September	26
April	28	October	29
May	28	November	26
June	26	December	23

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 don?t 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: The new government will implement the following amendments during the next three years

In 2006

?One?s own home allowance will be closed down.
?Commuter?s tax deduction can only be deducted if the distance between home and work is longer than 20 km.
?Tax free supplements for work on Sundays, bank holidays and during nights will be subject to social security deductions for the part exceeding 25 ? (expected from 1 July 2006).
?Tax exemption of allowances for work abroad will be brought to an end.
?The tax exemption on severance pays stands on the test bed.
?The flat tax of 25% on mini-jobs up to 400 ? shall be raised to 30% (term open).
?Health care reform.

In 2007
?Introduction of a "wealth tax" for annual incomes of 250,000 ? (singles) or 500,000 ? (married couples) by tax surcharge of 3% on the income tax.
?The value added tax is raised from 16% to 19%.
?Saver tax allowance will be reduced from 1,370 ? (married couples 2,740 ?) on 750 ?
(1,500 ?).
?The contribution to the pension scheme shall be raised from 19.5% to 19.9%.
?The contribution to the unemployment scheme shall be lowered from 6.5% to 4.5%.

In 2008
?Corporate tax reform
?Additional child allowance for children born after 2007
?Reform of the nursing insurance