HR for your German subsidiary: what happens between payroll runs

Your company has set up a GmbH in Germany. The tax adviser is in place, and payroll runs through a local payroll bureau or your group provider. At month end, the numbers add up. Yet questions keep reaching headquarters: Who drafts the employment contract? Who replies to the health insurer’s letter? Why are personnel costs in Germany higher than planned?

The answer is usually the same. Between two payroll runs lies a full month of HR work. This article shows who handles what in a German subsidiary and where the hand-offs are.

Who does what in your German subsidiary?

The payroll bureau and tax adviser calculate pay and file reports. HR on the ground makes sure they receive complete data every month, and looks after everything that concerns employees and authorities directly.

Task	Payroll bureau / tax adviser	HR on the ground	Headquarters
Payroll, wage tax filing	runs payroll, files with the tax office	provides master and change data by the cut-off date	approves salaries and budgets
Social security notifications	submits them from the payroll software	collects all required details in time	receives an overview
Employment contracts and written terms	checks payroll relevance on request	drafts, sends, documents	approves terms
Personnel files	receives payroll-relevant documents	keeps complete, GDPR-compliant files	gets access as needed
Employee questions	answers questions on payslips	first point of contact, in German and English	decides on policy matters
Letters from health insurers and authorities	clarifies payroll-related queries	receives, replies, tracks deadlines	is kept informed
Reporting	provides payroll reports	prepares HR figures for headquarters	steers on that basis

Employment law questions stay with your legal adviser, tax questions with your tax adviser. HR on the ground connects them and knows whom to ask for what. How we work with payroll bureaus and law firms is described on our partner page.

Before the first working day: the basics

For a newly founded subsidiary, HR work starts before the first hire.

1. Company number (Betriebsnummer). Issued by the Federal Employment Agency and the basis for every social security notification.
2. Statutory accident insurance. A new company registers with the responsible Berufsgenossenschaft within one week of starting business, even before the first hire.
3. Employment contract and written terms. Since 1 January 2025, the written statement of employment terms can in many cases be provided in text form, for example as a PDF by email. Certain industries, fixed-term contracts and non-compete clauses still require a signed paper document. The details are due in stages: some on the first working day, others after seven days and after one month.
4. Social security registration. It is filed with the first payroll run, at the latest six weeks after employment starts. To file on time, the payroll bureau needs all details in advance: health insurer, tax ID, social security number, contract data.

A typical month between payroll runs

In a subsidiary with 15 to 30 employees, a normal month often looks like this:

• A new colleague starts and needs a contract, written terms, registration and a personnel file.
• An employee moves to part-time, so contract and payroll data are updated.
• Parental leave begins, with its own deadlines and certificates.
• The health insurer or tax office sends a letter with a deadline.
• Headquarters asks for headcount, turnover and personnel costs.
• Shortly before the cut-off, all changes go to the payroll bureau, checked and complete.

Each of these tasks is manageable. Together they need a clear owner, otherwise they end up with the office manager, the local managing director or in long email threads with headquarters.

What headquarters can expect

Good HR work on the ground makes Germany predictable for headquarters. That means monthly reporting on headcount, joiners and leavers, absences and personnel costs, an explanation whenever figures change, and an assessment of what new rules mean for the company.

Many questions from abroad concern differences: sick pay, dismissal protection, social security contributions. Someone who knows both sides translates, professionally and linguistically.

Frequently asked questions

Does the payroll bureau also handle HR?

Usually the payroll bureau runs payroll and files the resulting reports. Contracts, personnel files, employee questions and letters from authorities stay with the company itself or with an HR service provider.

When must a new employee be registered for social security in Germany?

As a rule, with the first payroll run, at the latest six weeks after employment starts. In some industries, such as construction, hospitality or logistics, an immediate notification is required no later than the first working day to prevent undeclared work. The notification is usually sent from the payroll bureau’s software, which needs all details in advance.

Can a German employment contract be sent by email?

Since 1 January 2025, the written statement of employment terms can in many cases be provided in text form. Certain industries, fixed-term contracts and non-compete clauses still require a signed paper document.

Does a German subsidiary with up to 50 employees need its own HR employee?

With an external partner like AdminDockHR, you gain a complete HR department rather than a single hire. You get group-level HR quality: specialists for HR administration, recruiting, payroll coordination and reporting, backed by proven processes and systems. In-house, that breadth would take several roles, and the team stays available during holidays and sick leave..

Which language is used with headquarters?

Reporting and coordination with headquarters run in English, communication with employees and German authorities in German.