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About Payroll Services
To fulfil the obligations of wage tax and social insurance, it is necessary to prepare payroll calculations and submit wage tax and social insurance returns timely.
Our dedicated team, with extensive knowledge of social security and employment insurance, provides gross-up payroll calculations based on the Net Salary Guarantee Contract unique to Japanese expatriates, payroll calculations for local employees, mini-job/midi-job contracts. We prepare payroll documents on time, taking into account the contract details for payroll calculations.
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Frequently asked Questions
Here are some frequently asked questions about payroll.
Q. What problems are caused by the differences in tax and social security systems between Germany and Japan? Please tell me about the net salary guarantee.
A. Germany and Japan have different tax and social security systems.
For example, let’s say the rule is “Since the salary is paid by the local subsidiary, the subsidiary shall pay the tax and social security contributions according to the German tax law and social security system”.
In this case, although you are guaranteed the same nominal salary, there will be a difference in your take-home pay.
Also, in a company that is expanding globally, even if the salary is the same, expatriate A’s tax rate will be 35% because Germany is the country of assignment, and expatriate B’s tax rate will be 15% in another country. There is also a risk of differences in take-home pay and disharmony between employees.
For this reason, a contract has been created that guarantees an amount equivalent to the take-home pay assumed to have been earned in Japan even after the transfer to Germany, which is called the net salary guarantee contract.
Q. Explain the advantages and disadvantages of subsidising nursery school fees.
A. Childcare allowances paid by the employer in addition to the basic salary may be paid tax-free if the following conditions are met:
- Expenses for childcare facilities, such as nurseries for pre-school children (including childminders).
- Verification of school age in accordance with the laws of the state/district in which you live.
- You must provide your employer with the original receipts for the childcare fees actually paid.
Q. What are the advantages of providing a commuter pass?
A. From 2019, commuter pass fees paid by the employer in addition to the basic salary can be treated as tax-exempt. If part of the base salary is used to supplement the cost of a commuter pass, separate taxation is possible at a rate of 25% income tax, 5.5% solidarity surcharge and 7% church tax. In both cases, social security contributions are exempt.
If you have any questions, please do not hesitate to contact us.