Obligation to keep electronic records of remuneration from 2027 onwards

Digitalisation is also continuing to advance in social security law. Following the transition of numerous reporting and verification procedures to electronic formats in recent years, the next step is now underway: From 1 January 2027, the electronic maintenance of payroll records will become mandatory for all employers.

Employers are obliged to keep payroll records and organise them in such a way that they provide a complete overview of payroll statements and the facts relevant to social security within a reasonable period of time. In addition to payslips, these include what are known as ‘accompanying payroll records’, such as proof of nationality, proof of insurance or contribution liability, health insurance membership certificates, and other documents required for the assessment of social security law. Since 1 January 2022, Section 8 of the Contribution Procedure Regulation (BVV) has, in principle, stipulated that these accompanying remuneration records must be kept electronically. Until now, employers have been able to apply to the relevant audit department of the German Pension Insurance Scheme for an exemption from this obligation and continue to keep the records in paper form. This transitional arrangement ends on 31 December 2026. In future, all employers must maintain the legally required remuneration records electronically in accordance with Section 8 of the BVV.

Which documents are affected?

The digital remuneration file brings together all remuneration- and social security-related documents required for payroll accounting, certificates and audits.

These include, amongst others:

• Payslips
• Health insurance membership certificates
• Evidence of compulsory or voluntary insurance status
• Evidence of nationality, posting or parental status (e.g. birth certificates, residence permits)
• Declarations, applications and notices relating to payroll accounting (e.g. tax returns, parental leave payments, grant notifications)
• all other payroll documents relevant to audits as prescribed under Section 8 of the BVV (e.g. records of working hours)

It is important to note that the new regulations do not impose an obligation to fully digitise the personnel file.

General personnel documents, such as the following, are therefore not automatically part of the electronic remuneration records:

• Application documents and references
• Certificates of further education and training
• Target agreements
• Documentation of staff or development appraisals
• Holiday requests

These documents need only be maintained electronically as remuneration records if, in individual cases, they are relevant to payroll accounting or the assessment of an employment relationship under social security law.

Requirements for a digital remuneration file

Completeness, retrievability and verifiability

Maintaining remuneration records electronically involves more than simply scanning paper documents.

In accordance with the common principles set out in Section 9a of the BVV, the documents must, in particular

• be maintained in a complete and traceable manner
• be assigned to a unique document type
• be filed in a structured and clear manner
• be retrievable promptly
• be made available in a machine-readable format, and
• be available at all times for tax audits

For audit purposes, it is crucial that records can be exported and made available in a targeted manner, and that it is always clear which documents are relevant to the audit and where they are located.

Data protection and access control

Equally important are appropriate organisational measures for data protection. Pay records regularly contain personal data requiring special protection. Employers are therefore obliged to comply with the requirements of the General Data Protection Regulation.

This includes, in particular, ensuring that access to pay records is granted only to those persons who require it to fulfil their duties under their employment contracts.

Furthermore, care should be taken to ensure that payroll records are not stored uncontrollably on local drives, in private folders or in email inboxes. Instead, a centralised, structured and access-protected filing system is recommended, with regular data backups and clearly defined retention and deletion periods.

Our recommendations for action

We recommend that you, as of now

• analyse the existing filing system for payroll records
• assess which documents must be available electronically in future
• define responsibilities for electronic document management
• introduce standardised filing structures
• review retention and deletion periods, and
• assess the suitability of the payroll or HR software currently in use.

The statutory regulations do not prescribe any specific software or document management system. What is crucial, rather, is that the remuneration records are complete, organised, available electronically and can be produced at any time in the event of a tax audit.

Do you already have us handle your payroll processing?

On request, we can take care of the electronic management of the documents required for payroll processing on your behalf. This service is provided exclusively upon separate request and is not automatically included in the ongoing payroll processing.

It is important to note that, in order for the electronic payroll file to be maintained in full, all necessary documents and information must be provided to us in full and in a timely manner.

Please do not hesitate to contact us. We will show you which solution best suits your existing processes. Your solicitors at REDONIS.