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What tax obligations does an employer have for its employees (filing payroll tax returns, etc.)?

The employer is obligated to withhold the wage tax, the solidarity surcharge and, if applicable, the church tax from the wages for the account of the employee with each wage payment, to declare them electronically to the responsible tax office of the business premises (business premises tax office) and to pay them there.

The amounts for wage tax, solidarity surcharge and church tax are to be calculated according to the taxation characteristics that are stored in the database of the tax authorities as "electronic wage tax deduction characteristics (ELStAM)" and are to be retrieved by the employer (e.g. tax class, religious affiliation, allowances). The retrieval must be authenticated. The employer is obliged to register his employees in the database when they start their employment and to request the ELStAM. The employer requires the following information from the employee for this purpose:

  • Tax identification number (ID no.)
  • Date of birth
  • Main or secondary employment
  • if applicable, information as to whether an allowance applies in the secondary employment relationship.

Further information on ELStAM can be found on the website
The certificate required for authentication must be applied for once in the service portal of the tax authorities. There are also other logon options for ELSTER use (e.g. app, ID card)

If you employ workers in your company, you must submit a "wage tax registration" electronically to the company tax office after each registration period (monthly, quarterly, annually - see deadlines) in which wages were paid.

In addition, a payroll account must be kept for each employee for the respective calendar year. The wage account must contain, among other things, the type and amount of wages paid and the wage tax withheld. The employer must close the payroll account at the end of the year and, on the basis of the entries in the payroll account, transmit an electronic wage tax certificate for the employee to the tax authorities by the last day of February of the following year at the latest in accordance with the officially prescribed data record by remote data transmission.

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