The salary of German employees is subject to income tax and social security deductions. Employees pay income tax according to their individual tax rate (depending on their annual income). The tax is deducted directly from the salary which means that the employer is responsible for its actual payment. Germany has a linear progressive income tax rate starting at 15% and ending with the maximum tax rate of currently 42%. Compulsory social security (also deducted directly from the pay check) is borne equally by employer and employee. Social security includes health and unemployment insurance as well as state pension.
4th Dec, 2008
Employee Remuneration, Taxes and Social Security
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