If you hire employees as a founder, the first payroll is not long in coming. We show you what a correct pay slip looks like and answer questions such as: What are the deductions from the salary? Where do the deductions go? What is the minimum information? It is particularly worthwhile for founders and smaller companies to save time and money and simply outsource payroll accounting to a professional. There are options for the employee self service also.
Payroll: definition
As an employer, you are obliged to pay your employee monthly wages and salaries. This shows how gross wages become net wages. In other words, all components that are deducted directly from wages are broken down. The following items are usually deducted from the salary:
- Income tax
- Solidarity surcharge
- Church tax
- Health insurance
- Care insurance
- Pension insurance
- Unemployment insurance
At the same time, the payroll calculates which sums are to be transferred to which institution e.g. tax office, health insurance.
What is the difference between payroll and payroll?
Wages and salaries are not the same. The salary is a fixed amount that is the same per month regardless of the hours worked. The wages can vary and are paid according to the hours actually worked. That is why we also speak of wages and salaries. With the growth of the company, the needs for organizing and monitoring activities, as well as access to the information needed to make decisions become increasingly sophisticated. Perhaps the comparison is misleading; leading to the belief that internal execution is cheaper. An alternative term would be payroll accounting. Founders in particular should not be bothered with things like payroll accounting and should concentrate better on their core business. Compare now offers for professional payroll accounting.
Sample invoice for taxes and duties on wages and salaries
The following example applies to one:
- Unmarried person
- Over 23 years old, without child and without belonging to the church
- At tax class 1 in Hessen
- 2,000 dollars salary (gross).
It can be seen that with a gross salary of 2,000 dollars, the employer ultimately has costs of just fewer than 2,400 dollars. In the following, we describe step by step how you create the bill as an employer and which sums you have to pay to which offices.
Levies: Who is going to whom?
The following taxes go to the tax office with which your company is registered:
- Income tax
- If applicable, solidarity surcharge
- Church tax if applicable
- The tax office forwards the shares accordingly.
The following contributions go to your employee’s health insurance:
- Health insurance
- Care insurance
- Pension insurance
- Unemployment insurance
The respective health insurance company checks the amounts and passes them on to long-term care insurance or pension and unemployment insurance.
Other agencies that may be relevant to payroll:
Contributions to statutory accident insurance go to the responsible professional association.
As a rule, there are fixed dates on which the tax office often on the 10th of the following month and the health insurance company (at the end of the month) demands the funds. It is worth settling this easily by direct debit. Attention: Always ensure that you have sufficient funds in your account.
