DECreating a payslip
What it must contain, which deadlines apply, and the order the steps come in.
What belongs on a payslip
Employers must issue a payslip in text form with every payment. German regulation prescribes the content: details of employer and employee, the pay period, the individual gross components, deductions separated into taxes and social insurance, and the net amount paid. Alongside these come the attributes the deductions derive from, such as tax class, child allowances and the health fund with its supplementary rate.
The steps in order
| Step | What happens |
|---|---|
| 1. Check master data | Joiners, leavers, changes to tax class, health fund, address or bank details. Errors here propagate through the whole run. |
| 2. Enter variable data | Hours, premiums, one-off payments, benefits in kind, absences. Everything that changes month to month. |
| 3. Calculate | Taxes and social insurance contributions are derived from gross pay. The software applies the current annual parameters and the supplementary rate of each fund. |
| 4. Review the result | Clarify notable deviations from the previous month before reporting and paying. A trial run helps find errors before the live run. |
| 5. Report and pay | Contribution statements to the health funds, income tax return to the tax office, DEÜV reports on joining, leaving and changes. Then payment of wages and contributions. |
| 6. Provide and archive documents | Payslips to employees, records kept for audits by the pension insurance and the tax office. |
Run it yourself or hand it over?
Running payroll yourself pays off when the expertise is in house and payroll should stay close to the business. Changes can be applied immediately, questions are settled internally, and the data stays within reach. It requires software that reliably covers both the calculation logic and the reporting, because the professional responsibility remains with the employer.
Handing it over shifts the effort, not the responsibility. Master data still has to be correct and deadlines still have to be met.
What Lohnica helps with today
Gross to net, net to gross, employer costs and trial runs work today with daily-updated contribution rates of all statutory health funds. Live operation with electronic social insurance reporting starts in 2027 after the ITSG system audit. Until then you can calculate in parallel and compare; those on the waiting list get access first.
Frequently asked questions
Yes. There is no obligation to hand payroll to a tax adviser or service provider. What it takes is expertise, suitable software and the discipline to meet deadlines and reporting duties. The professional responsibility sits with the employer in any case, even when the work is outsourced.