Dates you should know as an entrepreneur in Germany

As a business owner of a GmbH or UG in Germany, it can be overwhelming to keep track of all the different tax and social security due dates. Missing a deadline can lead to penalties and other consequences, so staying organized and aware of your obligations is very important. Here are some key due dates to keep in mind, sorted by time.

Salary payments must be made on the 1st or 15th of the month, depending on the employment contract terms. Fixed-salary employees usually receive payment on the 1st of the month, while hourly employees receive payment on the 15th. As an employer, you should ensure that your employees are paid on time, which is critical for employee satisfaction.

Bookkeeping submissions to your local tax agent are typically required by the 5th of the following month to allow enough time for processing and VAT declaration. Bookkeeping involves recording and organizing your company’s financial transactions, including sales, expenses, and taxes. Your accountant or bookkeeper may need your help to gather all the necessary information to prepare your bookkeeping submissions on time. Commonly used tools for bookkeeping in Germany are SevDesk or DATEV Unternehmen. Their software lets you connect your bank accounts and upload invoices with automated transaction detection. You can save time and money by using these tools.

All German businesses must charge and remit VAT on their sales. The VAT report must be submitted by the 10th of each month, with immediate payment required after submission. The report calculates the difference between the VAT collected on sales and the amount paid on purchases, which is the net VAT owed to the tax authorities. Timely submission of the report is crucial to avoid penalties and ensure your business runs smoothly. If you have a local tax agent, he will ensure that these reports are submitted on time, but you have to provide your bookkeeping on time.

Personal income tax must also be submitted by the 10th of each month, with immediate payment required afterward. As a business owner, you’re responsible for withholding personal income tax from your employee’s salaries and remitting it to the relevant authorities on their behalf, as explained in our blog post about German Company Taxes.

Payroll companies may ask for the final estimated hours of your workers to be submitted a few days before the due date on the 5th last banking day. This ensures they have enough time to process your payroll and submit the necessary tax and social security contributions on your behalf. Working closely with your payroll company is important to ensure you provide accurate and timely information.

Contribution statements must be sent by the 5th last banking day of the month. This includes bank days from Monday to Friday. Contribution statements show the contributions you’ve withheld from your employees’ salaries and your contributions as an employer.

Social Security payments are due by the 3rd last banking day of the month. As a business owner, you’re responsible for withholding social security contributions from your employees’ salaries and submitting them to the relevant authorities on their behalf. Missing this deadline can result in penalties and interest charges. In most cases, you will get a payment list from your accountant, providing you with the due amounts and bank details of each insurance and tax office. You should always pre-calculate the costs before hiring someone to avoid negative surprises. You can calculate on this page.

Staying on top of these important due dates is very important for business owners in Germany to ensure they meet their tax and social security obligations on time. You can avoid penalty payments and other consequences by remaining organized and aware of your responsibilities. We recommend our clients forming a company in Germany with us to consider giving the insurance and tax offices the right to charge your bank account directly to streamline the payment process. Plan and ensure you meet these key due dates to avoid problems with your bank accounts.