Non-wage costs

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This article or paragraph presents the situation in Germany and Switzerland . Help us to describe the situation in other countries.

Non-wage costs is the name used in German official statistics for indirect labor costs. Since 2004, German official statistics have been using the classification used by Eurostat and the International Labor Organization (ILO) into gross wages and salaries on the one hand (direct labor costs) and ancillary wage costs on the other (indirect labor costs).

To the subject

The non-wage costs include the following types of costs:

  • Employers' social contributions, including
    • Statutory employer contributions to social security
    • Continued payment of wages and salaries
    • Imputed social contributions for old-age and health care of civil servants
    • Employer social contributions for trainees
    • other voluntary social benefits from employers, including:
      • Employer subsidies for sick pay
      • Aid for costs for medical services and cures
      • dentures
  • Costs for professional training and further education
  • Other expenses, including
    • Recruitment costs
    • work clothing provided by the employer
    • Moving reimbursements
    • Installation allowances for recruitment
  • Taxes on the wage bill or number of employees

Classification of non-wage costs

Depending on the perspective, the employer's contributions to the social security of the employees are seen either as additional gross income or as a specific deduction from the income that is actually appropriate. Historically, the second point of view applies. Social security was introduced in order to use wage increases that have become inevitable, sometimes compulsory, to protect against individual life risks .

The non-wage costs are also offset by a benefit. This is because the need to insure social risks remains after the employer's contribution (or all of the social security contributions) has ceased, i.e. H. an employee would have to incur costs for general life risks even after the non-wage costs ceased to exist.

A reduction in non-wage labor costs leads to a higher demand for labor and, in the broader definition (including employee contributions to social security), also to an increase in the freely available net wages of employees. However, this does not necessarily lead to a revival of the economy and an increase in employment, because the contributions of employees and employers also affect demand (e.g. as expenditure in the health sector, in care, as consumer expenditure by pensioners, etc.). If the reduction in non-wage labor costs is combined with a reduction in social benefits (pension, health insurance benefits, and so on), aggregate demand may even decline.

Additional personnel costs

The entrepreneurial institute of the German economy does not speak of ancillary wage costs, but of additional personnel costs . It uses Eurostat statistics for the definitions . Accordingly, the labor costs per hour worked consist of the direct hourly wage ("direct wage") and the additional personnel costs . The direct wage, i.e. the so-called direct wage, consists of the remuneration for work performed including overtime allowances, shift allowances and regularly paid bonuses.

The additional personnel costs consist of the other direct costs, which are included in the annual earnings, and the indirect costs. The direct additional personnel costs include a. remuneration for days off (vacation and public holidays), special payments (e.g. Christmas bonus), other cash grants and benefits in kind.

The employer's social security contributions, sick pay, other social expenses and the costs of vocational training are referred to as indirect additional personnel costs.

Situation in Germany

In Germany, the ancillary wage costs are below the EU average. In Germany, non-wage costs include the following proportions attributable to the employer:

Cost type was standing Contribution AG Contribution to comment
Pension insurance January 2020 9.3% 9.3%

The contributions to be borne jointly are incurred up to the respective assessment ceiling .

Statutory health insurance
general contribution rate 		January 2020 7.3% 7.3% Any additional insurance-specific additional contribution levied by the respective health insurance company was borne exclusively by the employee until 2018. Since January 1, 2019, the additional health insurance contribution has been paid in equal parts by employees and employers. The average additional contribution rate in statutory health insurance for 2020 is 1.1%.
Statutory health insurance
reduced contribution rate 		January 2020 7.0% 7.0%
unemployment insurance January 2020 1.2% 1.2%
care insurance January 2020 1.525% 1.525% 0.25% surcharge for childless employees aged 23 and over;
in the Free State of Saxony 1.025% for AG and 2.025% for AN
Statutory accident insurance 1.6% - depending on the accident risk
Allocation U1 according to the Expenditure Compensation Act January 2018 1.10% - 3.90% - For companies with generally no more than 30 employees. The amount of the contribution rates depend on the statutes of the health insurance company and the reimbursement rates (between 40% and 80%).
Contribution U2 , maternity benefit January 2018 0.14% - 0.88% - The amount depends on the statutes of the health insurance company
Allocation U3 for the insolvency money January 2020 0.06% -
Vacation pay according to BUrlG continued
pay during the vacation		 -

The employer's contribution is thus approx. 21% of the employee's gross wage if the wage does not exceed the assessment ceiling. No social security contributions are due for the part of the gross wage that exceeds the income threshold.

Since January 1, 2009, the contribution amount has been set by the federal government for all branches of social insurance; previously, the health insurance contribution was dependent on the health insurance fund that the employee had chosen. The employee contributes an additional 20.625% of their gross wages to social security. In long-term care insurance, childless people from the age of 23 pay a surcharge of 0.25%. In Saxony, people liable to pay contributions pay 1.475% (1.95%: 2 + 0.5%) of the income that is liable to contributions (up to the assessment ceiling). In addition, there may be a surcharge for childless. Employers in Saxony pay 0.475% (1.95%: 2 - 0.5%) of the salary that is subject to contributions to reduce the financial burden.

The social security contributions are compulsory and cannot be excluded by agreement between employer and employee, provided there is an employment relationship that is subject to compulsory insurance. The employee's contribution is withheld from wages. Both the employee and the employer's share of the total social security contribution are forwarded monthly by the employer to the responsible collection agency (health insurance company). The collection point distributes the total social security contribution to the individual social security agencies .

The employer pays the accident insurance contribution directly to the responsible accident insurance institution. This is usually a trade association .

Measures to reduce social costs in Germany

For the employer, the non-wage costs represent a financial expense. Employers' associations criticize that these costs increase the costs of employment. For this reason, employers' associations, market-liberal politicians and employer-related interest groups use the term additional wage costs . This designation is imprecise and possibly misleading. It should be noted that not all possible additional costs when paying wages are due to additional costs, as additional costs are also due to specific measures (e.g. holiday allowances, allowances for work abroad, etc.) or special occurrences (e.g. continued payment of wages in the event of illness, Waiting times due to technical or weather-related disruptions, etc.) are to be reduced.

According to the calculations of the Federal Ministry of Health , between 1991 and 2003 the share of employers in financing social benefits fell from 39.1% to 33.7%.

In order to challenge the unemployed even more, the so-called Hartz concept was created and u. a. implemented within the framework of Agenda 2010 of the red-green federal government (in modified form). It brings about a reduction in social security contributions in the low-wage sector. For this purpose, the mini-job and mid- job instruments were created, which appear alongside regular employment. At the same time, through Agenda 2010, further parts of the social security costs previously paid as employer and employee contributions were charged to the employees' net income and, on the expenditure side, pension payments, health insurance benefits and unemployment benefits were cut.

Critics fear that these measures would replace full-time jobs with cheaper jobs and that no new jobs would be created, which would further weaken the social security system due to loss of income. The Hartz concept is based on a microeconomic view of things that ignore the macroeconomic effects.

Critics of the fixation on the level of non-wage labor costs point out that wage replacement benefits support demand in times of economic weakness and that they also fulfill economic tasks in addition to ethical (collective protection of life risks). This Keynesian view is accused of not taking long-term developments into account. However, it should be noted that this is a permanent weakening of demand that will continue to affect future developments. This contrasts with the assessment of those economists who basically assume the market economy system is stable and who claim that current unemployment is not based on a demand problem. Critics also argue that ancillary wage costs are not the decisive factor for assessing the profitability of the work involved, but rather unit wage costs and unit profits . These would provide information about the productivity and competitiveness of an economy .

Situation in Switzerland

The non-wage costs in Switzerland are currently (2015) divided as follows:

Old-age and survivors ' insurance ( AHV), disability insurance (Switzerland) , income compensation scheme
5.15% (another 5.15% is borne by the employee). The obligation to contribute begins for employed persons on January 1st after completing their 17th year of age, for non-employed persons on January 1st after completing their 20th year of age. The minimum contribution is CHF 480 per year. The self-employed pay reduced contributions: With an income of CHF 56,400 and above 9.7%, for incomes below CHF 56,400, graduated, reduced rates apply, which are only 5.223% with an income of at least CHF 9,400. In addition to the AHV contributions, there are administrative costs, which, depending on the AHV fund, amount to between 0.05% and 0.2% of the total wages and are borne by the employer.
Unemployment Insurance (ALV)
1.1% on wages up to CHF 126,000, the employee pays a further 1.1%. For parts of wages over CHF 126,000, the contribution is 0.5% of the relevant annual wage. ALV contributions have also been levied on wages over CHF 315,000 since 2014. Self-employed people with sole proprietorships are not required to take out insurance, nor can they voluntarily take out public AL insurance.
Accident insurance (UVG / NBU)
The employer pays the premiums for industrial accidents and occupational diseases, the employee those for leisure accidents (NBU). The premiums are based on the wages subject to UVG, up to a maximum of CHF 126,000. NBU insurance is only required by law if employees work more than 8 hours a week. The premiums depend on the industry and the risk: an average of 0.4% for the UVG and a premium of 1.3% to 3% for the NBU. The self-employed are not subject to UVG / NBU, voluntary insurance is possible, but expensive: the premiums are often twice as high as those of the employees.
Daily sickness allowance insurance (KTG)
Daily sickness allowance insurance is voluntary for the employer, but he can pass half of these costs on to the employee, a legal incentive to reduce the entrepreneurial risk in the event of an employee being absent. The premiums are between 1.3% and 3% of the gross wage bill, with the self-employed paying significantly more.
Health insurance (KVG)
This is compulsory for all residents in Switzerland. The premiums for health insurance are in Switzerland not to wage costs, but are insured by the health insurance billed directly and is in the amount Convention un -dependent. The premiums for the compulsory basic insurance are charged per person and vary depending on the health insurance provider, age group and premium region. Dental treatments are not covered by the insurance . In the case of low incomes, the cantons grant different premium reductions of up to 50% of the premiums, which, however, must be reapplied for each year by the person concerned.
Pension fund (2nd pillar)
Every employer must be able to show a pension fund connection for his employees, the employees themselves have no choice. The pension funds are mostly insurance companies and collective foundations, but in larger companies they can also be foundations affiliated with the company. Insurance is compulsory for all employees from January 1 of the year in which they turn 18 and whose gross income per employment relationship is over CHF 21,150 per year. Up to the age of 24, only disability and death are insured. Then there is an accumulation of retirement capital. The premium is based on age and ranges between 2.5% for those under 25 and over 20% for those over 55. Only the wage share up to CHF 84,600 per year is compulsorily insured, minus a coordination deduction of CHF 24,675.
The employer and employee often pay half of the premiums, the employer's share can vary between 1/2 and 2/3 depending on the canton, employer and selected pension fund lie. For the management of a legal entity (AG and GmbH), improved management insurance based on the entire wage bill is often offered. The self-employed can voluntarily join their employees' pension fund. The same premium amounts and percentages apply here for employees and management.
Family allowance
Family allowances (except in the canton of Valais) are financed exclusively by employers. The contributions amount to 0.1% to 4.0% of the gross wage bill, depending on which canton you belong to. For farms there is a federal regulation (contributions 2% of income). The self-employed must join a family equalization fund in the canton of their place of business and must make contributions to their family equalization fund up to an income of CHF 126,000 per year.

The ancillary wage costs to be raised by the employer are between approx. 7.7% and 16.2% depending on the industry and the age of the employee. Around the same proportion is deducted from the employee's gross wage. As there is no income threshold for the AHV as there is in Germany, the percentage social security contributions are not higher for low wages than for higher wages, if one does not take into account the per capita premium of the statutory health insurance paid by the employee. In addition, the contribution rates in Switzerland are lower and more stable than in Germany.

European comparison

Non-wage costs in 2018 in relation to gross wages. For every EUR 100 gross earnings, employers paid an additional x EUR ancillary wage costs in percent. The narrow definition is used (indirect costs incurred by the employer in addition to the gross wage paid to the employee).

country Non-wage costs
European Union (EU 28) 30th
Euro area (EU 19) 34
Sweden 48
France 45
Lithuania 43
Italy 40
Austria 38
Czech Republic 37
Belgium 37
Slovakia 37
Estonia 35
Spain 35
Greece 33
Netherlands 30th
Latvia 29
Germany 27
Portugal 26th
Finland 25th
Hungary 25th
Poland 22nd
United Kingdom 20th
Slovenia 19th
Bulgaria 19th
Croatia 19th
Ireland 18th
Cyprus 16
Denmark 16
Luxembourg 13
Malta 8th
Romania k. A. Note 1
Note 1 no information as the numerical value is not certain enough

Source: Calculations by the German Federal Statistical Office based on Eurostat data from March 27, 2019

See also

literature

  • Heinz-J. Bontrup : Excursus: The myth of the excessive wage costs. In: Labor, Capital and State. 2005, ISBN 3-89438-326-7 , pp. 82-102.
  • Jürgen Ehler, Ines Koller: Comments on the discussion of ancillary wage costs with special consideration of the statutory pension insurance. In: Deutsche Rentenversicherung , 10–11 / 2005, pp. 621ff.
  • Thomas Schönwälder: Conceptual conception and empirical development of non-wage costs in the Federal Republic of Germany - a critical consideration. Hans Böckler Foundation, Düsseldorf 2003, ISBN 3-935145-65-9 .

Web links

Individual evidence

  1. ↑ a b CORRECTION: Labor costs in the EU 2018: Germany still sixth . Federal Office of Statistics. April 29, 2019. Accessed January 1, 2020.
  2. ↑ § 287 SGB ​​VI
  3. ↑ Announcement of the contribution rates in the general pension insurance and the miners' pension insurance for the year 2020 ( Federal Law Gazette 2019 I p. 1999 )
  4. ↑ a b Contribution rate and additional contributions for statutory health insurance . Federal Ministry of Health (BMG). October 30, 2015. Retrieved November 4, 2015.
  5. ↑ § 241 SGB ​​V
  6. ↑ § 249 SGB ​​V old version until January 1, 2019 and new version
  7. ↑ Announcement of the average additional contribution rate according to § 242a paragraph 2 of the fifth book of the Social Security Code for the year 2020 ( BAnz AT October 28, 2019 B3 )
  8. ↑ § 243 SGB ​​V
  9. ↑ § 1 Ordinance on the collection of contributions for employment promotion at a lower contribution rate for the calendar years 2019 to 2022
  10. ↑ First regulation amending the contribution rate regulation 2019 ( BGBl. 2019 I p. 1998 )
  11. ↑ § 55 SGB ​​XI
  12. ↑ Contribution insurance U1 illness . Metzinger BKK. Retrieved January 21, 2018.
  13. ↑ Continued payment insurance levy and reimbursement rates (pdf) DAK-Gesundheit. S. 1. Retrieved January 21, 2018.
  14. ↑ Contribution-relevant data 2018 (pdf) Wieland BKK. S. 1. Retrieved January 21, 2018.
  15. ↑ Contribution rates and limit values ​​at a glance (pdf) Guild Health Insurance Fund Brandenburg and Berlin. S. 1. Retrieved January 21, 2018.
  16. ↑ Insolvenzgeldumlagesatzverordnung 2020 ( BGBl. 2019 I p. 1413 )
  17. ^ Ancillary wage costs ( Memento of January 22, 2009 in the Internet Archive ) Federal Ministry of Finance
  18. ↑ - Synoptic table of the applicable contribution and premium rates (PDF) Federal Social Insurance Office Switzerland