Accountancy

Summary Einkommensteuer is a direct, progressive tax on the income of natural persons, covering seven income types (e.g., employment, self-employment, business, rentals, capital). Liability is generally unlimited for residents and limited to German-source income for non-residents. Partnerships don’t pay income tax themselves; their partners are taxed individually. Your tax base is the taxable income (zvE) …

Summary German Corporations such as GmbH, UG (haftungsbeschränkt) and AG must allocate part of their annual profits to reserves. Companies must distinguish between different types of reserves, such as the capital reserve and retained earnings reserve. UGs in particular must transfer at least 25 % of their annual profit (after prior-year losses) into a legal …

Summary In Germany, a payslip shows your gross earnings, special payments (bonuses, allowances), and then subtracts taxes and social contributions (health, pension, unemployment, nursing care). It also lists deductions like wage tax, church tax, and solidarity surcharge. Your net salary appears after all these deductions. It may include employer contributions or benefits (e.g. capital-forming payments). …

Summary When calculating labour costs in Germany, employers must include all non-wage components beyond regular salaries. These additional expenses typically represent about 21 % of gross wages and cover social insurance, health, pension, accident and care contributions. Further levies such as U1, U2 and insolvency insurance also add to the total cost. Accurately understanding these …

Contents Payslip basics Key abbreviations Tips Conclusion   What is a payslip? This payslip in Germany goes by several names: Mainly Gehaltsabrechnung but also Entgeltabrechnung and Lohnabrechnung. As the name suggests, this document clearly shows the gross and net values of an employee’s remuneration and proves the employee’s financial entitlements. Once a month, the employer …

Summary The small business regulation is a simplified VAT scheme for small businesses in Germany. It exempts entrepreneurs from charging VAT if their annual turnover stays below legal thresholds. This reduces administrative work and accounting costs, but it also means you cannot deduct input tax from business expenses. The decision to use this rule should balance …