The payslip (Lohnabrechnung) is a document that employers in Germany must provide in text form with every salary payment according to §108 GewO. It breaks down employee compensation: gross salary, tax deductions, social security contributions, and the net payment amount. The retention period is at least 6 years.

Definition: What Is a Payslip?

The payslip – also known as Gehaltsabrechnung (salary statement) or Entgeltabrechnung (remuneration statement) – is a written document that transparently presents the composition of employee compensation for a specific payroll period (usually one month). It shows both employees and employers how the earnings are calculated and which deductions apply.

Wages vs. Salary vs. Remuneration

These terms are often used interchangeably but have different meanings:

Wages (Lohn) refer to compensation calculated based on hours worked. The monthly amount can therefore vary depending on how many hours were actually worked.

Salary (Gehalt) is a fixed monthly amount paid regardless of actual working hours. Salaried employees typically receive a salary.

Remuneration (Entgelt) is the umbrella term for both forms of compensation. The remuneration statement therefore covers both wage and salary statements.

Legal Framework

§108 GewO: The Statutory Obligation

The obligation to provide payslips derives from §108 Paragraph 1 of the German Trade Regulation Act (Gewerbeordnung – GewO). According to this provision, every employer must provide employees with a statement in text form when paying remuneration.

According to the law, the statement must contain at least the following information:

• The payroll period
• The composition of the remuneration
• Type and amount of bonuses and allowances
• Type and amount of deductions
• Advance payments and prepayments

A special provision: The obligation to provide a statement lapses if the information has not changed compared to the last proper statement (§108 Para. 2 GewO). In practice, however, most companies still create monthly statements to ensure transparency.

Remuneration Statement Regulation (EBV)

Since July 1, 2013, the Remuneration Statement Regulation (Entgeltbescheinigungsverordnung – EBV) has detailed which information a payslip must contain when used for social benefits (e.g., parental allowance, unemployment benefits). This standardized form is called a remuneration certificate according to §108 Para. 3 GewO.

Structure of a Payslip

A proper payslip is divided into three sections:

Header: Employer and Employee Data

The header contains all relevant master data:

• Name and address of the employer
• Name, address, and date of birth of the employee
• Tax ID and tax class
• Social security number
• Start (and if applicable, end) of employment
• Payroll period

Main Section: Gross, Deductions, Net

The main section breaks down the actual calculation:

Gross remuneration: The agreed salary or calculated wages plus all bonuses (e.g., for night or Sunday work), allowances, premiums, and benefits in kind.

Tax deductions: Income tax (Lohnsteuer), solidarity surcharge (Solidaritätszuschlag), and if applicable, church tax (Kirchensteuer). The amount depends on tax class, income, and individual allowances.

Social security contributions: Contributions to health, pension, long-term care, and unemployment insurance. These are split equally between employer and employee.

Net remuneration: The amount remaining after all deductions, which is transferred to the account.

Footer: Payment Amount and Bank Details

The footer contains:

• The employee's bank details
• The final payment amount
• The total of the employer's social security contributions
• If applicable, a reference to §108 GewO

Understanding the Gross-to-Net Calculation

Tax Deductions

Income tax is deducted directly from gross salary and remitted by the employer to the tax office. The amount depends on several factors:

• Tax class (I to VI)
• Level of income
• Tax allowances (e.g., child allowance)
• Church tax obligation

The solidarity surcharge has only applied to higher earners since 2021. Church tax amounts to 8% or 9% of income tax depending on the federal state.

Social Security Contributions 2026

For 2026, the following contribution rates apply (employee and employer share combined):

• Health insurance: 14.6% + average 1.7% additional contribution
• Pension insurance: 18.6%
• Long-term care insurance: 3.4% (childless employees: +0.6% surcharge)
• Unemployment insurance: 2.6%

The contribution assessment ceilings determine up to which income social security contributions are levied. They will increase significantly in 2026 due to strong wage development.

Creating Payslips: Options for Employers

In-House vs. Outsourcing

As an employer, you have several options:

Internal processing: The HR department creates statements using specialized software (e.g., DATEV, Lexware, Sage). This requires expertise and regular training on legislative changes.

Outsourcing: Payroll processing is delegated to a tax advisor, payroll office, or specialized service provider. This reduces internal workload and minimizes error risks.

For small businesses and startups, outsourcing is often the more practical solution. Larger companies, however, often benefit from an in-house solution with direct integration into HR systems.

Digital Payslips

Since a landmark Federal Labor Court (BAG) ruling in 2025, it has been clarified that employers may provide payslips digitally via a password-protected employee portal. This fulfills the text form requirement of §108 GewO.

Important: Employees who do not have private online access must be given the opportunity to view and print their statements at the workplace. The employer must ensure access but is not responsible for the actual retrieval by the employee.

Retention Requirements

Different retention periods apply to payslips:

Tax law (§41 EStG): Payroll accounts and records must be retained for 6 years. The period begins at the end of the calendar year in which the last entry was made.

Relevant for tax audits: Documents relevant to profit determination must be retained for up to 10 years.

Occupational pension schemes: For documents relating to company pension schemes (bAV), the retention requirement can be up to 30 years according to §18a BetrAVG.

As a rule of thumb: When in doubt, retain longer. Digital archiving makes this considerably easier.

Frequently Asked Questions About Payslips

What is the difference between Lohnabrechnung and Gehaltsabrechnung?

The Lohnabrechnung (wage statement) is based on hours worked and can vary monthly. The Gehaltsabrechnung (salary statement) shows a fixed monthly amount. The umbrella term for both is Entgeltabrechnung (remuneration statement). In practice, the terms are often used interchangeably.

What information must be included on a payslip?

Mandatory information includes: name and address of employer and employee, payroll period, gross salary with all remuneration components, tax deductions (income tax, solidarity surcharge, church tax), social security contributions, and the net payment amount.

How long must payslips be retained?

The tax law retention period is 6 years. For documents relevant to tax audits, it is 10 years. For documents relating to occupational pension schemes, the period can be up to 30 years.

Can payslips be provided digitally?

Yes, this has been explicitly permitted since the BAG ruling in 2025. Provision via a digital employee portal fulfills the text form requirement. However, employers must ensure that all employees have access – even if they do not use a private device.

When must the payslip be created?

According to §108 GewO, with every payment of remuneration. The statement can be omitted if nothing has changed compared to the last statement. In practice, most companies create monthly statements.

What should I do if there is an error in the payslip?

Errors should be corrected as quickly as possible. For social security contributions, a correction period of 3 months applies. If too little income tax was withheld, the employer can file a liability-exempting declaration with the tax office. Employees can claim underpaid remuneration within the three-year limitation period under §195 BGB.

Can I create payslips myself?

Yes, this is possible with appropriate software. Common programs like DATEV, Lexware, or Sage support correct calculation. Alternatively, you can outsource payroll to tax advisors or specialized payroll offices.

Conclusion

The payslip is a legal requirement for every employer in Germany and an important instrument for transparency in the employment relationship. It not only documents remuneration but also serves employees as proof of income for loans, rental applications, or authorities.

As an HR professional, ensure correct implementation of all mandatory information according to §108 GewO and the Remuneration Statement Regulation. Digital solutions simplify the process and have met the legal text form requirements since 2025.

However, employee satisfaction doesn't start with the payslip – it begins in the recruiting process. With scientifically validated methods, the right talents can be identified objectively.

Sources

• §108 GewO – Settlement of Remuneration. German Legislature, 2024.
  https://www.gesetze-im-internet.de/gewo/__108.html
• Remuneration Statement Regulation (EBV). Federal Ministry of Labour and Social Affairs, 2013/2024.
  https://www.lohn-info.de/entgeltbescheinigung_verordnung.html
• BAG Ruling: Payslips as Electronic Documents. Federal Labor Court, 2025.
  https://www.bundesarbeitsgericht.de/presse/entgeltabrechnungen-als-elektronisches-dokument/
• §41 EStG – Record-Keeping Obligations for Wage Tax Deduction. German Legislature, 2024.
  https://www.gesetze-im-internet.de/estg/__41.html
• Wage and Salary Accounting: Employer Obligations. Haufe, 2025.