General

What is the disability tax?

The integration of severely disabled people is an important goal of German social policy. In order to promote this, employers who employ a certain number of employees have an employment obligation in accordance with SGB IX. If this obligation is not met, companies must pay a compensatory fee. 

Please note:
For more information on how to manage the disability tax in Personio Payroll, see our Help Center article on the topic. 

Legal basis

Employers who employ at least 20 employees per month on an annual average are required under Section 154 SGB IX to fill at least 5% of their jobs with severely disabled people. 

Whether the employer complies with this obligation is reviewed annually. For this purpose, a notification must be submitted to the Federal Employment Agency no later than 31 March of the following year (for 2025: March 31, 2026). The report is made either via an official form or electronically using the IW-Elan software, which is provided by the Institute of German Economics for the Federal Employment Agency. 

Please note:
The iW-Elan software is available for download free of charge on the following page. 

Calculation of the severely disabled rate

Who is considered severely disabled under the Social Code?

According to § 2 (1) SGB IX, people with disabilities are persons who have physical, emotional, mental or sensory disabilities which, in conjunction with attitudinal and environmental barriers, are highly likely to prevent them from participating equally in society for more than six months.

The degree of disability (GdB) describes the extent of the impairment and is determined in steps of ten from 20 to 100. The assessment is made in accordance with the standards of the Health Care Ordinance (VersMedV).

According to Section 2 (2) SGB IX, people who have been identified as having a GdB of at least 50% are considered to be severely disabled.

People with a GdB of less than 50% but at least 30% who are unable to find or retain a suitable job as a result of their disability are treated on an equal footing with severely disabled people by the Employment Agency. 

Disability pass

In order to achieve compensation for disadvantages, a so-called disabled person's pass is initially issued for a maximum period of five years. If the requirements continue to be met even after expiry, the card can be extended a maximum of twice. If no change in the type and severity of the disability is still to be expected, the card can also be issued indefinitely. 

Please note:
More information on severe disability under the ninth Social Code can be found on the corresponding page of the Federal Government. 

Which jobs are included in the calculation?

Jobs include all jobs for employees, civil servants, judges, trainees and other persons hired for their vocational training, such as interns or volunteers. The following are not taken into account: 

• Training places are not included in the calculation of the minimum number of jobs and in the number of jobs that employ severely disabled people. 
• Positions that are only filled for a maximum of eight weeks 
• Jobs with less than 18 hours per week. Exception: If part-time is necessary due to the disability, this person will be credited
• Jobs that are primarily employed for charitable, religious or educational purposes

Level of compulsory employment rate

The compulsory job rate of jobs that must be filled by severely disabled people is 5% of eligible jobs in private companies. There is an exception for federal public employers: Here, the mandatory quota is 6%.

Reporting procedures and deadlines 

Severely disabled employees for the previous year must be reported to the Federal Employment Agency by the 31st of the following year at the latest. The compensatory fee to the responsible integration office is also due on the same date. Self-assessment by the employer is mandatory. If there is a late notification and payment, the Integration Office may charge late fees. 

Amount and graduation of the compensatory charge

Due date of the compensatory fee 

The compensatory duty must be paid if the prescribed employment rate is not met by the company. The aim of this levy is to create a financial incentive to employ severely disabled people. Any compensatory duties that may be incurred must in principle be transferred by the employer to the integration office responsible for the employer headquarters by March 31 of the following year. 

Leveling of the levy

The compensatory tax for the 2025 reporting year for companies with at least 60 jobs is as follows:

For small businesses with 40 to less than 60 jobs, the following amounts apply:

For small businesses with 20 to less than 40 jobs, the following amounts apply:

The compensatory fee is to be paid for each mandatory job vacant on average per year. The figure rises as the employment rate falls and is particularly high for companies that do not employ any severely disabled people at all.