This article explains what a contribution estimate is, how Personio Payroll calculates it automatically, and how you can review, customize, and submit it.
What is a premium estimate?
Employers are legally required to submit the contribution report for social security contributions pursuant to Section 28f(3) of SGB IV to the relevant collection agency (health insurance fund) by midnight on the fifth-last banking day of the month at the latest.
If monthly pay is calculated based on the actual work hours, the exact contribution amounts are usually not yet available at that time. In such cases, the employer must estimate the expected social security contributions based on Section 23(1), second sentence, of SGB IV.
Personio Payroll automatically calculates the estimated contribution based on the previous month's contribution liability. Any remaining difference between the estimates and the actual contributions will be automatically amended in the next billing month.
Legal Basis
The method for estimating social security contributions is governed by Section 23(1) of Book IV of the Social Code. Employers have two options for estimating the amount if the contribution liability is not yet known at the due date:
- Estimated amount of the contribution debt: The employer calculates the amount of contributions owed as accurately as possible based on all available data.
- Simplification rule: Contributions are paid at the same rate as the previous month.
In both cases, the remaining balance is due no later than the third-to-last banking day of the following month and will be automatically included in the next contribution report.
Please note:
Personio Payroll calculates the estimated contribution based on the previous month's contribution liability in accordance with the simplification rule. In the first billing month, the amount of €0.00 is used.
The criteria and methods used to calculate the estimated contribution liability must be documented in a verifiable manner in accordance with § 9(1), sentence 1, no. 10 of the BVV. Employers are required to estimate the amount as closely as possible to the actual contribution liability.
Contribution Estimate with Personio Payroll
Set up contribution estimates
To set up contribution estimates for a legal entity, follow these steps:
- Go to Payroll > Manage > Payroll Run.
- Under "Post Estimates," click "Edit."
- Select whether the contribution estimates should be submitted automatically by Personio or reviewed and submitted manually, and confirm your selection by checking the box.
- Click "Finish Setup."
Please note:
Contribution estimates can only be set up for the entire legal entity, not for individual payroll groups.
Automatic sending of contribution estimates
You also have the option of having your premium estimates submitted automatically. Personio Payroll then automatically sends these to the appropriate collection agencies on the due date. In this case, manual dispatch is no longer necessary.
Even if automatic submission is enabled, you can still manually customize individual contribution estimates at any time. If you do that, you must immediately submit the customized contribution estimate manually, as it will not be saved. If you have already sent an estimate manually, this will not affect the automatic sending of the remaining premium estimates for the same month. A banner in the edit view informs you that this estimate is part of the automated process.
If there are any blocks in the payroll run, values of €0.00 will be submitted to ensure timely submission.
Review, customize, and send the premium estimate
Please note:
At the time of the estimate, as much data as possible should already have been entered into Personio. This applies in particular to hours worked, new hires and leavers, as well as absences that are already known.
To review the estimated premium for the current month before it is sent, follow these steps:
- Go to the Payroll > Compliance section.
- Select the relevant sub-company.
- Click "Check Post Estimate." You can manually customize the calculated amounts by clicking in the corresponding field and changing the value.
- Click "Submit Estimate."
The premium estimate is also automatically submitted as soon as you approve the payroll run for that month.
Please note:
If you have selected the option to automatically send contribution estimates to organizations and have manually customized the values, you must also send this estimate manually. The data is sent by Personio on a daily basis, and changes are not taken into account.
View sent contribution estimates
To view contribution estimates that have already been sent, follow these steps:
- Go to the Payroll > Compliance section.
- Filter by the "Contribution Report" category.
- Click "Check Post Estimate." Please note that contribution estimates that have already been sent cannot be edited.
FAQ
Are all employers required to estimate contributions?
No. For employees who receive only fixed compensation (e.g., a fixed monthly salary), no estimate is required, as the full amount of the contribution liability is already known at the time it becomes due. Estimates are only necessary if payroll data is not yet complete at that time.
Are discrepancies between estimated and actual contributions automatically reconciled?
Yes. Personio Payroll automatically carries over any differences to the following month's contribution report. No manual amendment or cancellation of the contribution report is required.
What happens if I don't submit the premium estimate on time?
If no contribution report is provided, the health insurance company is entitled to estimate the premiums itself. This usually works to the employer's disadvantage. This estimate is binding until you submit your own contribution report. Amendments can be made later.
Does Personio Payroll support the simplification rule?
Yes, Personio Payroll calculates the estimated contribution based on the contribution liability from the previous month. This is in accordance with the simplification provision under Section 23(1) of SGB IV.