Hiring your first employee in Germany: what to register, and what it costs.

Before your first employee's first payday you need four things: a company number from the statutory accident insurance (Berufsgenossenschaft), an employer number (Betriebsnummer) from the Bundesagentur für Arbeit, a registration of the employee with their health insurer, and the employee's tax data (ELStAM) from the tax office. After that, payroll is a monthly routine. You withhold wage tax and the employee's contributions, pay about 21% of gross pay on top as the employer's share, and file two returns. The minimum wage is €13.90 an hour in 2026 and €14.60 from 1 January 2027.

1. The order that works

Each registration needs a number from the one before it, so the order matters:

1. Accident insurance first. The Berufsgenossenschaft gives your business its Unternehmensnummer.
2. Then the Betriebsnummer. Since 2024 the application asks for the Unternehmensnummer.
3. ELSTER for the business. You need the business's tax number (Steuernummer) and an ELSTER login for the organisation, both to fetch the employee's tax data and to file the wage tax return.
4. Payroll set up, in certified software or with a Steuerberater, before the first month ends. Contributions are due in the month the work is done, not afterwards.

If the job pays €603 a month or less, it can be a minijob, with its own rules and flat-rate charges. That route is covered in the minijob guide. Everything below is for a regular job.

2. The accident insurance (Berufsgenossenschaft)

Every employee is covered by the statutory accident insurance for accidents at work and on the way to work. The employer pays it alone (§ 150 SGB VII): nothing comes off the employee's pay. Which carrier is responsible depends on your industry. For most businesses it is one of the commercial Berufsgenossenschaften (BG). The DGUV, their umbrella body, has a finder online and a free hotline on 0800 60 50 40 4.

The business has to be registered with its BG within one week of starting (§ 192 SGB VII). A trade registration (Gewerbeanmeldung) counts as that notice. Freelancers (Freiberufler) don't file one, so they register with the BG themselves. The BG then sends the 15-digit Unternehmensnummer.

The BG bills afterwards. Contributions are set after the end of each calendar year (§ 152 SGB VII), based on the BG's costs, the pay you report and your industry's risk class (§ 153 SGB VII). The pay figures go to the BG digitally by 16 February of the following year (§ 99 SGB IV).

3. The employer number (Betriebsnummer)

The Betriebsnummer is an eight-digit number that identifies you in every social security report. You need one from your first employee, including a minijobber or an apprentice (§ 18i SGB IV). The Betriebsnummern-Service of the Bundesagentur für Arbeit issues it on an online form. You give the business's name, the workplace address, what the business does, a contact person for reporting questions, and the Unternehmensnummer from the BG.

A business with workplaces in different towns, or doing different kinds of work, needs a number for each. A private household that only employs a minijobber gets its number from the Minijob-Zentrale instead.

4. Registering the employee with their health insurer

From a new employee you need:

• their tax ID (Steuer-ID) and date of birth, and whether this is their main job;
• their social security number (Sozialversicherungsnummer);
• which health insurer (Krankenkasse) they are with, or that they are privately insured;
• their number of children under 25, which changes the care insurance contribution;
• bank details.

The employee chooses their health insurer. If they haven't named one within two weeks, you register them with the fund they were last insured with. If they never had one, you choose a fund and tell them (an email will do) (§ 175(3) SGB V).

That fund is the collection point (Einzugsstelle) for health, care, pension and unemployment insurance together. The registration (Anmeldung) goes to it electronically, at the latest with the first payroll run and no later than six weeks after the job starts (§ 6 DEÜV). Reports and contribution statements go electronically, from certified payroll software or the paid SV-Meldeportal. Post, email and fax are not accepted, and the free sv.net tool was switched off on 1 July 2024.

Some industries have to report on the first day, before work starts, directly to the pension insurance (Sofortmeldung). They are construction, hotels and restaurants, passenger transport, haulage and logistics including delivery platforms, fairground businesses, building cleaning, trade-fair construction, the meat industry, security, hairdressing and beauty, and prostitution (§ 28a(4) SGB IV). The same eleven industries, listed in § 2a SchwarzArbG, have stricter rules on ID papers and working-time records too.

An employee who is privately insured still pays pension and unemployment contributions. For those, you choose a statutory fund as the collection point (§ 28i SGB IV). Instead of the employer's health contribution, you pay a subsidy towards their private premium. It is capped at what you would pay for a statutory member and at half of what they actually pay (§ 257 SGB V).

5. Social security in 2026: who pays what

Contributions are a percentage of gross pay, split roughly in half. You deduct the employee's half from their pay and pay both halves to the health insurer.

Pension, unemployment, health and long-term care insurance are the Renten-, Arbeitslosen-, Kranken- and Pflegeversicherung. * Employees aged 23 or over without children pay 0.6 points more (2.4%). With two or more children under 25, they pay 0.25 points less per child from the second to the fifth. In Saxony the employer pays 1.3% and the employee 2.3%.

Each health insurer sets its own Zusatzbeitrag. The 2.9% is the official average for 2026 (2.5% in 2025), and many funds charge more. The other rates are the same as in 2025.

Contributions stop at a ceiling (Beitragsbemessungsgrenze). In 2026, pension and unemployment contributions are charged on pay up to €8,450 a month (2025: €8,050), and health and care contributions up to €5,812.50 (2025: €5,512.50). The ceilings go up every January.

On top of the table, the employer alone pays:

• U1, the sick-pay levy, if you normally employ no more than 30 people (apprentices not counted). It refunds 80% of the pay you continue during an employee's illness, and of the employer's contributions on it (§ 1 AAG);
• U2, the maternity levy, paid by every employer, which refunds maternity pay in full;
• the insolvency levy (Insolvenzgeldumlage), 0.15% (§ 360 SGB III);
• the accident insurance (section 2).

Each health insurer sets its own U1 and U2 rates.

Contributions are due early. They have to reach the health insurer by the third-to-last bank working day of the month in which the work is done, as an estimate where the final figure isn't known yet (§ 23(1) SGB IV). For November 2026 that is Thursday 26 November. The contribution statement (Beitragsnachweis) has to arrive two working days before that (§ 28f(3) SGB IV). If it is late, the fund may estimate the amount.

6. Wage tax: ELStAM and the monthly or quarterly return

Wage tax (Lohnsteuer) is the employee's income tax. The employer withholds it from each payment, together with the solidarity surcharge and church tax where they apply, and pays it to the tax office. The employer is liable for tax it should have withheld and didn't (§ 42d EStG).

ELStAM (elektronische Lohnsteuerabzugsmerkmale) are the employee's tax class and allowances, held by the tax authorities. You register the new employee with their tax ID, date of birth and whether it is their main job, through payroll software or the employer functions in Mein ELSTER. The data arrives within about five working days. Only the employee can give you their tax ID, and it is checked against the date of birth. When the job ends, you deregister them.

The wage tax return (Lohnsteuer-Anmeldung) goes to the tax office through ELSTER. Return and payment are due by the 10th day after the end of the period (§ 41a EStG). The period depends on the previous year's wage tax:

• more than €5,000: monthly;
• more than €1,080, up to €5,000: quarterly;
• €1,080 or less: once a year.

In the first year there is no previous year. The wage tax for the first full calendar month is multiplied by twelve instead. A first full month with €350 of wage tax gives €4,200 a year, so returns are quarterly. A business that existed for only part of the previous year scales that part up to a full year.

The year end adds three reports:

• the annual social security report for each employee (Jahresmeldung), by 15 February (§ 10 DEÜV);
• the pay figures to the BG, by 16 February;
• the electronic wage tax certificate (Lohnsteuerbescheinigung) to the tax office, by the end of February (§ 41b EStG).

7. Minimum wage and the written terms

The statutory minimum wage (Mindestlohn) per hour, gross (MiLoV5):

• 2025: €12.82
• 2026: €13.90
• from 1 January 2027: €14.60

It applies to minijobbers and part-timers too. A few groups are outside it (§ 22 MiLoG): apprentices, under-18s without completed vocational training, some interns (a compulsory internship, or up to three months for orientation or alongside studies), and people who were long-term unemployed, for their first six months. Some industries have a higher minimum set by collective agreement.

A contract can be informal, but the essential terms must be handed over in writing (§ 2 NachwG). Pay and working time are due on the first day of work. Start date, place of work, job description and probation are due by the seventh calendar day. The rest, such as holiday and the notice procedure, is due within one month. Since 2025 an email or PDF is enough if the employee can store and print it and you ask them to confirm receipt. The exception is the eleven Sofortmeldung industries above, where it still has to be signed paper.

8. The records you have to keep

• A payroll account (Lohnkonto) for each employee and year: the tax data, every payment and the tax withheld. You keep it until the end of the sixth year after the last entry (§ 41 EStG).
• Pay records for social security (Entgeltunterlagen), in German, including contribution statements. You keep them until the end of the calendar year after the pension insurance's audit that covers them (§ 28f(1) SGB IV). That audit comes at least every four years (§ 28p SGB IV).
• Working time. For minijobbers in a business and for staff in the eleven Sofortmeldung industries, you record the start, end and length of each day's work. The entry is due by the seventh day after, and you keep it for two years (§ 17 MiLoG). For everyone else, the Federal Labour Court has held that employers must record the start and end of daily working time (BAG, 1 ABR 22/21, 13 September 2022).
• The written terms, the employee's tax and insurance details, and proof of their children for the care contribution.

Payroll records are also part of the business's books. How long the books themselves are kept is in the bookkeeping guide.

9. Payroll software or a Steuerberater?

Every month, payroll means working out gross to net, producing a payslip, sending the contribution statement and paying the contributions, and filing and paying the wage tax. Then there are the reports for each start, change and departure, and the year-end reports.

Doing it yourself needs certified payroll software for the social security reports, plus ELSTER for the wage tax. The software does the arithmetic. The hard part is the inputs: whether a benefit is taxable, whether a job is a minijob, sick-pay refunds under U1, a company car, a bonus. You stay responsible for mistakes, and they tend to surface years later, at the pension insurance's audit or a wage tax audit (Lohnsteuer-Außenprüfung).

A Steuerberater can run payroll as a service: the monthly run, the reports, the returns, and questions from the tax office or an auditor. Advisors charge under the StBVV, the official fee regulation for Steuerberater. How that works is in the guide to Steuerberater fees.

A payroll bureau (Lohnbüro) is the third option. The law lets someone with a commercial qualification and at least three years' bookkeeping experience run the ongoing payroll and prepare the wage tax returns (§ 6 StBerG). Advice on the tax questions behind them is a matter for a Steuerberater.

Software is built for the routine case: a fixed salary with no extras. Each benefit, minijob or change of hours adds inputs to get right. Whether a particular job, benefit or contract is treated correctly is a question about your own case, and a Steuerberater checks it.

The short version