What legal regulations do I have to consider when processing payroll?
January 3, 2023 | 40,00 EUR | answered by Elvira Klinger
Dear tax consultant,
My name is Anneliese Born and I am the managing director of a medium-sized company. Lately, I have been experiencing difficulties in preparing payroll for my employees. I have heard that there are many legal regulations that I must adhere to, but I am unsure of exactly what they are.
Currently, we still manually process the payroll and I want to ensure that we comply with all legal requirements. I am concerned that we may make mistakes and could face legal consequences as a result. That is why I am looking for a clear overview of the most important legal regulations to consider when processing payroll.
Could you please explain to me which legal requirements we must absolutely adhere to when processing payroll? Are there any specific deadlines that must be met? What are the consequences if we violate these regulations? Are there any new legal changes that I should be aware of?
I would greatly appreciate it if you could help me gain a better understanding of the legal regulations related to payroll and provide possible solutions to ensure that we comply with all regulations correctly.
Thank you in advance for your assistance.
Best regards,
Anneliese Born
Dear Mrs. Born,
Thank you for your inquiry and your interest in ensuring correct payroll for your employees. As the managing director of a medium-sized company, it is indeed important to comply with legal requirements in payroll to avoid legal consequences. I would like to explain some important points to you.
First and foremost, it is important to comply with the legal provisions of the Working Hours Act (ArbZG) and the Minimum Wage Act (MiLoG). The ArbZG regulates the working hours of your employees and specifies how many hours per day and per week can be worked. The MiLoG, on the other hand, sets the minimum wage that you must pay your employees. Make sure to comply with this requirement.
Furthermore, you must calculate and remit social security contributions correctly. This includes contributions to pension insurance, health insurance, unemployment insurance, and long-term care insurance. These contributions must be transferred monthly to the respective authorities. The income tax must also be correctly remitted, taking into account the tax class and allowances.
It is important to prepare payroll statements on time and remit social security contributions and income tax promptly. Failure to do so may result in fines and additional payments. Violations of regulations can also lead to employment law consequences such as warnings or even terminations.
It is advisable to regularly inform yourself about new legal changes that may affect payroll. I recommend consulting a tax advisor or specialist in labor law to stay up to date.
I also recommend investing in payroll software that can help you comply with legal requirements correctly. These programs are tailored to the needs of small and medium-sized businesses and significantly simplify payroll processing.
I hope this information helps you and gives you a better overview of the legal regulations in payroll. If you have any further questions or need assistance, I am at your disposal.
Best regards,
Elvira Klinger
Tax Advisor
