Company events: Planning a staff party? Here’s what matters now
Mini-jobs in 2027: A higher threshold – but also higher costs
Social Security, Company Parties, and Mini-Jobs: Here's What's Changing
Inhalt
1. Mandatory Social Security Coverage Despite a 50% Stake
Federal Social Court (BSG), Judgment of July 23, 2026, Case No. B 12 BA 10/24 R
Whether a managing director of a German limited liability company (GmbH) is considered an employee for social security purposes or is self-employed depends, in the case of a shareholding in the company, largely on the extent of his legally guaranteed influence. The decisive factor is whether the shareholder-managing director, by virtue of his shareholding and the articles of association, can determine the course of the GmbH or prevent resolutions with which he disagrees.
According to the case law of the Federal Social Court, the legal authority required for this is generally deemed to exist if the shareholder-managing director holds at least 50 percent of the shares in the company’s share capital. In the case of a smaller stake, a blocking minority that encompasses the entire scope of the company’s operations is typically required. The legally binding agreements are decisive. Mutual cooperation or extensive autonomy in day-to-day business operations alone are not sufficient.
The Case at Hand
In the case decided by the Federal Social Court (Bundessozialgericht, BSG), judgement of July 23, 2026, Case No. B 12 BA/24 R, two shareholder-managing directors each held 50 percent of the shares in a GmbH. Resolutions were generally passed by a simple majority.
However, in the event of a tie, the articles of association provided for a special dispute resolution mechanism. If the shareholders could not reach an agreement, a neutral third party or an arbitration panel was to decide. As part of a social security audit, the German pension insurance institution therefore determined that dependent employment existed and demanded additional contributions and levies totaling 127,833.77 euros.
The Decision of the Federal Social Court
The Federal Social Court confirmed that the two shareholder-managing directors were subject to compulsory social security contributions.
Despite their respective 50 percent shareholdings, they did not possess reliable veto power. In the event of a conflict, they could not influence how the neutral third party or the arbitration panel would decide. As a result, they were unable to reliably prevent resolutions they did not approve of or prevent their dismissal as managing directors.
Implications for Practice
The ruling shows that a 50 percent ownership stake does not automatically exclude the obligation to pay social security contributions. The decisive factor is the overall structure of the articles of association.
Special attention is required in the case of GmbHs with two managing partners who hold equal shares. In particular, tie-breaking, arbitration, or similar conflict resolution provisions can influence the assessment under social security law.
Companies should therefore not only consider the ownership percentage but also examine how decisions are made in the event of a tie and whether an individual shareholder-managing director can reliably prevent decisions they do not approve of.
Do you employ shareholder-managing directors or would you like to have their social security status reviewed? Please feel free to contact us. We would be pleased to assist you in assessing the social security status of your shareholder-managing directors.
2. Company events: Planning a staff party? Here’s what matters now
Summer parties, Christmas parties or a joint visit to Oktoberfest: company events help strengthen team spirit. From 2026 onwards, correct payroll treatment will become even more important, particularly with regard to who is invited and when the tax treatment is implemented.
What has changed?
Since January 1, 2026, remuneration granted in connection with a company event may only be taxed at a flat rate of 25% if participation is open to all employees of the company or of a specific part of the company. This changes the previous legal position following the Federal Fiscal Court ruling of March 27, 2024 for periods from 2026 onwards.
Events held exclusively for managers, service providers or other selected individuals generally do not meet this requirement. By contrast, an event organised for a department may qualify if all employees of that organisational unit are entitled to participate.
The allowance remains in place
For up to two company events per employee and calendar year, an allowance of EUR 110 including VAT continues to apply. This also requires the event to be open to all employees of the company or of a specific part of the company. In the case of a third event, the employer may choose the two events to which the allowance is applied.
If the expenses exceed the allowance, only the excess amount is taxable. If the requirements are met, the employer may tax this amount at a flat rate of 25%.
Example:
The costs for a visit to Oktoberfest amount to EUR 160 per employee. After deducting the allowance, a taxable benefit of EUR 50 remains. If all employees of the relevant company or department are invited, the employer may generally tax the EUR 50 at a flat rate of 25%.
If, however, only selected executives are invited, neither the EUR 110 allowance nor the 25% flat-rate taxation option is available. The benefit is then generally subject to individual taxation. Depending on the specific case, another statutory flat-rate taxation option may be considered. Unless an exemption from social security contributions applies, the benefit is usually part of remuneration subject to social security contributions.
What are the costs?
In principle, all employer expenses including VAT that can be directly allocated to the event are included in the calculation, for example:
- food and beverages,
- admission, reservation and room costs,
- music, entertainment and other external event-related costs,
- joint travel organised by the employer,
- gifts presented on the occasion of the event, and
- benefits provided to accompanying persons.
The total costs are allocated to the participants actually present. The share attributable to an accompanying person is assigned to the respective employee. No additional allowance applies for accompanying persons.
Process payroll in good time
Taxable benefits should be processed in payroll for the month of the event or immediately thereafter. To ensure exemption from social security contributions, the wage tax exemption or flat-rate taxation must be applied in payroll for the relevant payroll period. A flat-rate taxation approach applied only retrospectively during a wage tax audit does not automatically eliminate a social security contribution liability that has already arisen. The required documentation should therefore be available in full before payroll for the relevant period is finalised. Subsequent flat-rate taxation after the end of February of the following year is particularly risky from a social security law perspective.
Outlook for 2027
The draft 2027 wage tax amendment guidelines provide for relief for certain employer-organised events, such as farewell events, onboarding events, changes of role, service anniversaries or milestone birthdays. The overall character of the event should be decisive. As only a draft is currently available, further developments should be monitored. For classic company events, the EUR 110 allowance will continue to apply.
What companies should consider now
Document the group of persons invited, the actual participants, accompanying persons and all costs. If an event comprises different professional and social components, a schedule or agenda should also be kept. This makes it easier to distinguish between and allocate the costs relevant for tax purposes.
All documents should be submitted to payroll immediately after the event.
Are you planning a company event or are you unsure about the tax treatment? Please feel free to contact us.
3. Mini-jobs in 2027: A higher threshold – but also higher costs
As of January 1, 2027, the statutory minimum wage will increase, and with it the dynamic mini-job earnings limit. At the same time, employer costs will rise. Further reform proposals are still in the political or legislative process.
New earnings limit from 2027
The statutory minimum wage will rise to EUR 14.60 per hour on January 1, 2027. The monthly earnings limit for mini-jobs will therefore increase from EUR 603 to EUR 633. The annual limit is generally EUR 7,596. The transitional area for midi-jobs will consequently start at EUR 633.01 and continue to end at EUR 2,000 per month.
Check working hours and expected earnings
Employers should reassess hourly wages, agreed working hours and regularly expected earnings for 2027. If only the hourly wage is increased while working hours remain unchanged, the mini-job earnings limit may be exceeded. Foreseeable special payments, such as holiday or Christmas bonuses, must be included in the forecast. Multiple mini-jobs may also need to be aggregated.
Higher employer costs
The flat-rate health insurance contribution for commercial mini-jobs will increase from 13% to the general contribution rate plus the average additional contribution rate as of January 1, 2027. Based on the current status, a rate of 17.5% is therefore expected. The exact percentage will depend on the average additional contribution rate determined for 2027.
A proposal to increase the uniform flat-rate tax from 2% to 5% has also been agreed politically. However, this change has not yet been implemented by law and should therefore be expressly presented as a planned measure.
Will the mini-job be abolished?
The Old-Age Insurance Commission recommends abolishing the option to be exempt from compulsory pension insurance and, in principle, ending the special tax and social security status of mini-jobs. The Commission considers exceptions to be possible, particularly for school pupils. These recommendations do not yet have direct legal effect. Whether and in what form the legislator will take them up remains open.
What companies should consider now
Employers should in particular:
- check hourly wages and working hours for 2027,
- regularly forecast expected annual earnings,
- take foreseeable special payments and other employment into account,
- document working hours completely and in a timely manner,
- plan for higher employer costs, and
- monitor ongoing legislative procedures.
Do you employ mini-jobbers or are you planning new hires for 2027? Please feel free to contact us. We can support you with the social security assessment and correct payroll processing.
