German payroll deductions cover Lohnsteuer (wage tax, withheld per the employee's progressive Einkommensteuer bracket), Solidaritätszuschlag (where applicable), and social insurance contributions split between employer and employee: pension (18.6% total, 9.3% each), health insurance (14.6% base + ~2.9% average Zusatzbeitrag, split evenly), unemployment insurance (2.6% total, 1.3% each), and nursing care insurance (2.6-4.2% of gross wage, with the employer bearing 1.8%). For 2026, the contribution assessment ceiling is €5,812.50/month (€69,750/year) for health/nursing care insurance and €8,450/month (€101,400/year) for pension/unemployment insurance — contributions above these ceilings don't increase further.
2026 contribution ceilings: €5,812.50/month (health/nursing care), €8,450/month (pension/unemployment) — contributions cap at these income levels.
Costs
Pension insurance: 18.6% total (9.3% employer + 9.3% employee)
Health insurance (base + avg. Zusatzbeitrag): ~17.5% total, split evenly
Unemployment insurance: 2.6% total (1.3% each)
Required Documents
Payroll tax registration (Lohnsteuer-Anmeldung)
Employee tax ID (Steuer-ID) and social security number
Common Mistakes
Applying pension/unemployment contribution rates without checking whether the employee's salary exceeds the higher €8,450/month ceiling, above which no further contribution is due on that portion.