Workforce Payments Guide Germany

Last updated: Dec 18, 2023

Euro (EUR)
Payroll Frequency
Fiscal Year
1 January - 31 December
Employer Taxes
Central Bank
Deutsche Bundesbank.
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3rd Party Payments

Authority  Payment Frequency  Due Date  Payment Method 
Finanzamt Charlottenburg  Monthly  Until the 10th of the following month.
If it’s not a business day, it will be on the next business day 
AOK Hessen  Monthly  3 business days before the end of the month  Wire 
AOK Nordost  Monthly  3 business days before the end of the month  Wire 
Barmer GEK RK/Ost  Monthly  3 business days before the end of the month  Wire 
Barmer GEK RK/West  Monthly  3 business days before the end of the month  Wire 
EK DAK-Gesundheit  Monthly  3 business days before the end of the month  Wire 
EK DAK-Gesundheit RK/Ost  Monthly  3 business days before the end of the month  Wire 
EK hkk  Monthly  3 business days before the end of the month  Wire 
KKH Kaufmaennische RK West  Monthly  3 business days before the end of the month  Wire 

Payments Coverage

Papaya Global fully support payments in Germany

Contractor Payments

Papaya Global supports payments to contractors in Germany. The payout currency may vary based on the receiver bank account setup when receiving foreign currencies. it is advised for contractors to reach out to their bank to confirm how foreign currencies are handled

Payroll Frequency



IBAN Example Germany


IBAN in print DE88 5001 0517 6584 3331 97
Country Code DE
Digit Code 88
Bank code (BLZ code) 50010517
Bank Account Number 6584333197


In Germany, the KYC (Know Your Customer) process is mandatory for banks and other financial institutions, aimed at verifying the identity of their customers and preventing business relationships with individuals associated with criminal activities such as money laundering, terrorism, corruption, and other forms of organized crime. It is based on the European provisions and is governed by the Anti-Money Laundering Act (Geldwäschegesetz).

The process involves three main stages: customer onboarding and identity verification, Customer Due Diligence (CDD), and risk assessment procedures. The first stage requires the collection of identity documents and checking their authenticity. The second stage, CDD, must be carried out for all new business relationships, suspicious or large transactions, or changes in customer circumstances. The third stage involves risk assessment procedures, which, if determined to be high, require further Enhanced Due Diligence (EDD).

For individuals, proof of identity, residence, income, and employment details may be required. For businesses, additional documents like the VAT identification number (USt-ID), articles of association, list of shareholders, commercial register extract, or the annual financial statements could be needed. Legal representatives of the company are required to be clearly verified via a video call.

The German regulatory body known as BaFin (Bundesanstalt für Finanzdienstleistungsaufsicht), or the Federal Financial Services Authority, oversees and enforces financial institutions’ compliance with AML and KYC regulations. BaFin allows automated verification via video review, which requires a Qualified Electronic Signature (QES) and a small bank transfer as part of onboarding.

The duration of the KYC process can vary depending on the legal form of the company, the industry, and the individual pace. the verification itself for companies can take up to 48 hours.

Banking Regulations

The specific banking regulations that impact cross-border workforce payments include:

1. Diverging regulatory frameworks, anti-money laundering compliance complexities, restrictive data regulations and inadequate access for non-bank players.

2. Regulation (EU) 2021/1230 on cross-border payments: Applies to cross-border payments denominated in euro or in the national currency of participating member states. The charges for these payments should be the same as for corresponding payments within a member state. Payment service providers provide customers with clearly displayed information before a transaction.

3. Directive (EU) 2015/2366: Requires the charges and exchange rate used in cross-border payments to be transparent. It also specifies the information to be given to customers.

4. Use of International Payment Account Number identifier (IBAN) and the Payment Service Provider’s Business Identifier Code (BIC): Customers and suppliers of goods and services applying the regulation to make and receive payments use their IBAN and the payment service provider’s BIC.

In Germany, the specific regulations are:

1. Pursuant to Section 32 (1) sentence 1 of the KWG, anyone wishing to conduct banking business or to provide financial services in Germany commercially or on a scale that requires a commercially organised business undertaking requires a written license.

2. Providers from non-EEA states wishing to market their banking and financial services products specifically in Germany must establish a subsidiary or a branch in Germany to obtain the required license.

3. Foreign entities conducting money transmission business frequently open accounts with German credit institutions in order to process the money transmission business with German clients through these accounts. This type of business is viewed as the operation of money transmission business requiring a license in Germany pursuant to Section 32 (1) of the KWG.

5. The new reporting requirements: Reflect recent developments in payment transactions, the collection of fraud data, and cross-border card payments broken down by individual merchant category codes and recipient countries.

6. Reporting deadlines: All submissions, including the standardized negative report, are to be submitted in XML data format via the ExtraNet of the Deutsche Bundesbank within specific deadlines.

8. The Bundesbank’s new reporting requirements for both credit institutions and payment service providers also impact cross-border workforce payments.

Bank Account Opening

In Germany, the requirement to open a company bank account depends on the type of company. For all companies proof of identity is required. For sole proprietorship, the bank may also require proof of a trade license. Registered commercial traders need to provide a certificate of incorporation, an extract from the commercial register, and possibly a trade license.

Partnerships such as oHG or GbR must provide proof of identity of all partners and the partnership agreement. For corporations like GmbH, UG, or AG, additional documents required include a list of shareholders, articles of association, and certificates of incorporation. The bank may also request a trade license.

For non-German founders who do not reside in Germany, the requirements include confirming their identity, providing supporting documents, and undergoing either the POSTIDENT or VideoIdent process to verify their identity.

Some banks also allow representation, where another person can open the account for them in Germany with a notarised power of attorney. The documents needed to confirm their identity should be recognized in Germany.

The CEO must be present at the opening of the business account and other shareholders or authorized signatories can only access the account if they have account authorization. The amount of the share capital depends on the legal form and the agreements in the articles of association.

For a GmbH, a share capital of at least €25,000 must be paid into the business account. But at the time of incorporation, it’s sufficient if half of the required share capital, ie €12,500, is paid into the account. For a UG formation, the company can only be entered into the commercial register when the required share capital has been paid into the business account. A share capital of €1 is already sufficient to form a UG.

Opening a business account with a direct bank can take less than two days, depending on the legal form and the documents that need to be checked. For other banks, the process may take about 4 weeks, with the client receiving the internet banking token within the next 2 weeks.


International Banks

The major foreign banks operating in Germany are:

1. UniCredit Bank AG (Italy)

2. ING-DiBa AG (Netherlands)

3. Citigroup Global Markets Deutschland AG (United States)

4. SÜDWESTBANK – BAWAG AG Niederlassung Deutschland (Austria)

5. Santander Consumer Bank AG (Spain)

6. UBS Europe SE (Switzerland)

7. HSBC Trinkaus & Burkhardt GmbH (United Kingdom)

8. TARGOBANK AG (France)

9. Goldman Sachs Bank Europe SE (United States)

10. State Street Bank International GmbH (United States)

11. Lloyds Bank GmbH (United Kingdom)

12. Standard Chartered Bank AG (United Kingdom)

13. Morgan Stanley Bank AG (United States)

Local Major Banks

The major local banks operating in Germany include:

1. Deutsche Bank

2. Commerzbank

3. HypoVereinsbank (Part of UniCredit Bank AG)

4. Postbank (Owned by Deutsche Bank)

5. Volksbanken und Raiffeisenbanken

6. BerlinerSparkasse

7. Frankfurter Sparkasse

8. Stadtsparkasse Munich

9. Kreditanstalt für Wiederaufbau

10. DZ BANK AG Deutsche Zentral-Genossenschaftsbank

Payment Tools

The B2C payment tools available in Germany include Klarna (also known as SOFORT), PayPal (including its buy now, pay later (BNPL) option called PayPal Ratenzahlung), Giropay, Open Invoices, Girocard, and Sofortbanking.


In Germany, it is possible to pay employees with cryptocurrencies, but there are specific regulations to follow. According to the Federal Financial Supervisory Authority (BaFin), cryptocurrencies are considered financial instruments, but are not considered legal tender, currencies, or foreign notes or coins.

A company can pay salaries in cryptocurrency without requiring authorization, provided it does not trade, hold, or mine coins for profit. However, the process should be such that the company transfers the total amount of the salaries to be paid in Euros to the cryptocurrency exchange shortly before payday. If the company holds the cryptocurrency for some time and the exchange rate changes, the BaFin might consider the company as offering financial services and holding client funds, which would require authorization.

According to Section 107 (1) of the German Trade, Commerce and Industry Regulation Act (GewO), employers are mandated to pay the remuneration in euros, thus, it is not possible to pay the entire salary of an employee with cryptocurrencies. However, it is permissible to pay out part of the salary as remuneration in kind, which could be in the form of cryptocurrency.

This is subject to certain restrictions, like benefits in kind can only be provided at cost price and the non-seizable portion of the wage must be paid in euros. The percentage of salary that can be paid out as remuneration in kind is dependent on the individual case, but a rough guideline is around 25 percent of total remuneration.

Lastly, if a payment provider is used for the payment process who does not possess a BaFin license, legal proceedings could be initiated against the entrepreneur. The threshold for the obligation to obtain a license is fluid and can be rapidly exceeded if additional service elements kick into the pure use of crypto values.

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