In 2023, there are once again a number of adjustments to be made in the area of wage tax and social security law. Overview of relevant changes for employers:
- Higher earnings threshold for midijobs, minimum wage will remain
- Higher basic tax-free amount for wage tax
- Artists’ social security contribution increases
- Still possible: payment of inflation compensation premium
- Company number instead of membership number
Changes 2023 – an overview
Higher earnings threshold for midijobs, minimum wage will remain
In Germany, the statutory minimum wage was raised to 12 EUR per working hour from October 01, 2022. In addition, the maximum monthly pay for mini-jobs was raised from the previous 450 EUR to 520 EUR.
There are no plans for a further increase in the minimum wage in 2023. According to the Minimum Wage Commission, the next increase is planned for 01.01.2024 at the earliest.
In the case of employment subject to social security contributions in the transitional sector – the so-called midijobs – the upper limit was raised from 1,600 EUR to 2,000 EUR on January 01, 2023.
Employees earning below or at most 2,000 EUR gross per month will pay less in social security contributions and still receive full health, long-term care and unemployment insurance benefits. Despite the reduced contributions to statutory pension insurance, these do not have a detrimental effect on the employee’s pension entitlements.
Higher basic tax-free amount for wage tax
As of January 1, 2023, the basic tax-free amount will increase by 561 EUR to 10,908 EUR. A further increase to 11,604 EUR is planned in 2024.
Artists’ social security contribution increases
In 2023, the levy for the self-employed in the creative sector will increase from 4.2 percent to 5 percent of the net contract sum.
Still possible: payment of inflation compensation premium
In 2023 (until the end of 2024), employers will continue to have the option of paying employees an inflation compensation premium of up to E3,000 EUR tax- and social security-free. For the employer, the special payment is tax-deductible as a business expense. From a legal perspective, there are a few things to keep in mind.
Company number instead of membership number
For the transmission of social security data and wage statements to the employers’ liability insurance associations and accident insurance funds, employers must use the new 15-digit company numbers as of January 1, 2023. These replace the previous membership numbers.