Employer contribution and Employee's share denote the legally regulated division of social security contributions between employer and employee.
As a general rule, financing is provided in several branches of Social security equally, i.e. in equal parts.
Definitions
Employer contribution
The employer's share is the portion of social security contributions that the employer bears in addition to the agreed remuneration. It is not deducted from the gross wage but is additionally paid by the employer.
Employee's share
The employee's share is the portion of contributions withheld from gross earnings. It thus reduces the Net wage.
Parity funding
Parity financing means that employers and employees fundamentally contribute equally to the payments. This applies in particular to:
- Health insurance
- Pension insurance
- Unemployment insurance
- Long-term care insurance (with special provisions)
Exceptions
- Accident insurance Exclusively funded by the employer.
- Long-term care insurance A possible supplementary contribution for childless individuals is to be borne by the employee alone.
Meaning in payroll
In the payroll run, social security contributions are based on the Gross social insurance contribution calculated.
- The employee's share is deducted from the gross salary.
- The employer's share is borne additionally by the employer.
- The total contributions are paid to the responsible collection agency.
The clear separation of both parts is crucial for transparency and correct contribution proofs.
FAQ
What is the employer's contribution?
The portion of social security contributions that the employer covers in addition to the wages.
What is the employee's share?
The portion of contributions deducted from gross earnings.
Paritätische Finanzierung bedeutet, dass die Kosten einer Dienstleistung oder eines Projekts von zwei oder mehr Parteien zu gleichen Teilen getragen werden.
That employers and employees generally share the contributions equally.
Are there exceptions?
Yes. The accident insurance is borne entirely by the employer. In the case of long-term care insurance, a supplement may be payable by the employee alone.
Conclusion
Employer contributions and employee contributions are central components of social security financing. For companies, the correct calculation, allocation, and remittance of both contributions are essential for legally compliant payroll accounting.
Brasser Accounting Solutions GmbH is a specialised accounting service provider and part of a corporate group with Quint GmbH (tax consultancy/auditing) and Service Place Årjäng AB (Swedish tax office). BAS exclusively performs services according to § 6 No. 3 and 4 StBerG and does not provide tax or legal advice.
