German Companies Must Digitize Payroll Records by 2027
As of January 1, 2027, German employers must store all payroll documents in an electronic, machine-readable format, ending previous exemptions for paper-based archiving.
Berlin, Germany – German companies face a new legal mandate starting January 1, 2027, requiring all payroll documents to be kept in an electronic and machine-readable format. This change, stemming from § 8 of the German contribution procedure ordinance (BVV) and confirmed by the fourth bureaucratic relief law (BEG IV), eliminates the previous possibility for employers to obtain exemptions for paper-based record-keeping.
The new regulations apply to all employers in Germany, regardless of company size or industry. The German Pension Insurance (Deutsche Rentenversicherung) will enforce these rules, and companies failing to provide electronic, machine-readable records during audits could face penalties, including delay fines and follow-up inquiries.
Software provider agorum® Software GmbH notes that a simple PDF archive on a file server is insufficient to meet the requirements for audit security and machine readability mandated by the law and the joint principles under § 9a BVV for the electronically supported audit (euBP).
The scope of mandatory electronic records includes a wide range of documents. This covers payroll accounts, salary statements, employment contracts detailing pay, records of leave, hours worked, overtime, night and holiday surcharges, tax data, social security information, and any documentation related to employment status or benefit eligibility.
While file formats like PDF, JPEG, BMP, PNG, and TIFF are permitted for documents, the data must also be structured and accessible for machine analysis to comply with the forthcoming regulatory standards.