Secondment/Payroll in Germany
Income tax and Social Security contributions.
-Employees working in Germany are in general liable to German income tax. According to the Double Taxation Agreement between Ireland and Germany, employees can be relieved from having to pay income tax if they are less than 183 days per year in Germany and other conditions. The German income tax rates are between 14 % and 45 %..
-Employees who hold the certificate A1 are not liable for pension and social security contributions. The certificate A1 is issued to employees who have paid PRSI contributions for a certain time. In accordance with the double taxation agreement between Germany and Ireland employees can usually work for a certain time without being liable to pay PAYE in Germany, if their employer doesn’t have a permanent establishment in Germany. If employees don’t hold an A1 certificate they can be liable contributions from the first day. The contributions to the social security system are between19 %- 19.6 % each for the employer and employee
-Before employees are sent to Germany to work on construction sites German customs should be notified.
SOKA Bau (Holiday and Wage Equalization Fund in the Construction Industry)
-To ensure the holiday entitlement of construction workers, the employer might be liable to pay into a holiday fund called SOKA Bau. Irish construction companies working in Germany should check whether they are liable to register with the fund and if they have to pay the contributions.
We offer comprehensive advice for companies sending employees to Germany.
Our services include:
- Application for A1 form.
- Custom registrations
- Soka Bau registration
- Secondment/ Payroll in Ireland
We offer a comprehensive payroll service and an income filing service.
Working in Ireland will generally result in Irish payroll tax. For seconded employees who come from a country with the double taxation agreement, there is an exemption if the worker is in Ireland for less than 183 days. Should a worker remain working in Ireland for more than 60 days and less than 183 days he may apply for a payroll tax exemption within 21 days from the commencement of work. As a rule, where somebody works in Ireland for less than 60 days it is not necessary to apply for an exemption from payroll tax.
The Irish income tax rates consist of 20% and 40%. Single people pay a 20% Tax rate (with a yearly income of up to €33,000). Anything exceeding this will be of a 40% rate.
The Universal Social Charge was introduced during the financial crisis and is an additional fee on your income. The rates are between 1% (with a yearly income of up to 12,012) and 8% (with a yearly income consisting of €51,376 or more).
A yearly sum of €3,300 will be deducted from the yearly paid tax for residential wage recipients. (?) For a couple who only have one income this sum is raised to €1,650. Depending on personal circumstances it is possible that there may be further deductions from the payable tax.
Social Security Insurance
The employer contributions consist of 10.75% and the employees contributions consist in most cases of 4% from the income. Seconded employees should app;y for the A1 form before they are sent to Ireland; otherwise the income earned in Ireland will be liable to the Irish social insurance.
- Income tax consultation
- Registration for income tax
- Consultation on benefit in kind
- Information on tax breaks
For example: FED – Foreign Earnings Deductions, SARP – Special -Assignee Relief Programme, Bike to work etc.
- Income tax refunds
- Applying for tax relief