Digital payroll records will be mandatory for employers with staff from 1 January 2027. The exemptions available until 31 December 2026 will no longer apply. Businesses should therefore define how personnel documents are received digitally, assigned to employees, stored securely and provided during an employer audit.
What will change for digital payroll records from 2027?
From 1 January 2027, employers will no longer be able to keep supporting payroll records exclusively on paper under an exemption. This also applies if a tax consultancy handles ongoing payroll processing.
According to the Beitragsverfahrensverordnung (Contribution Procedure Regulation), the transitional arrangement ends on 31 December 2026. Existing exemptions will therefore not postpone the change beyond this date.
Digital payroll records and electronic employer audits are related but distinct issues. Payroll records form the digital personnel file used for social security audits. For the elektronisch unterstützte Betriebsprüfung, abbreviated to euBP, structured data from payroll and financial accounting is transferred to Deutsche Rentenversicherung (German Pension Insurance).
All employees are covered. This generally includes employees in minijobs and short-term employment. A small business with two full-time employees and one temporary worker must comply with the requirements in the same way as a company with 100 employees.
Which digital payroll records must businesses keep?
Businesses must store digitally all documents relevant to assessing an employee’s social security status and calculating contributions. The documents required depend on the particular employment relationship.
Under section 8 of the Beitragsverfahrensverordnung, these include:
- employment contracts or records of the main employment conditions under the Nachweisgesetz (Proof of Employment Conditions Act),
- documents used to assess the social security status of an employment relationship,
- work permits and other evidence of residence status where required,
- notifications and certificates from health insurance funds,
- evidence of parental status,
- documents relating to marginal and short-term employment.
The list is not the same for every business. For a minijob, for example, information about other employment may be decisive. Additional proof of the right to work may be required for employees from other countries.
In practice, you should ensure that every document can be clearly assigned to the relevant employee in the digital system. Suitable identifiers include the personnel number, document type and date received. A file named „New scan 3“ can hardly be assigned reliably during an audit.
When must paper originals still be retained?
Payroll records received on paper must be converted into an electronic format. However, the paper documents must not automatically be destroyed immediately after scanning.
Under section 9 of the Beitragsverfahrensverordnung, converted paper documents must be retained in their original form at least until the employer audit has been concluded with a legally final outcome. Legally final means that the audit result can no longer be challenged through an ordinary legal remedy.
Particular care is required for documents that must be signed. According to guidance from Deutsche Rentenversicherung, a basic scan does not always replace the signed original. If there is no suitable electronic signature, the original paper document should also be retained.
Businesses therefore need two clear rules: which documents will be kept only digitally, and which originals will also remain in the archive? The decision should be defined by document type rather than depending on who happens to be processing a document.
How will the electronic employer audit work from 2027?
For the euBP, the employer submits the requested payroll data electronically to Deutsche Rentenversicherung. The final exemptions also end on 31 December 2026.
According to Deutsche Rentenversicherung, payroll data has generally had to be submitted electronically since 1 January 2023. For financial accounting data, this has generally applied since 1 January 2025.
The data must be submitted via Deutsche Rentenversicherung’s data centre. Under section 28p of SGB IV (Book IV of the German Social Code), the data is submitted from a payroll programme that has passed the statutory system review. This means that the payroll software used has completed the statutory review procedure set out in section 95b of SGB IV.
Deutsche Rentenversicherung audits employers at least every four years. Under section 28p of SGB IV, payroll records must be retained until the end of the calendar year following the most recent audit. For certain paper originals, the additional requirements described above may apply until the audit has been concluded with a legally final outcome.
If a tax consultancy handles payroll, it should be agreed in writing who generates and submits the euBP data. It is equally important to establish who provides individual digital documents when requested. Payroll data held by the tax consultancy is not a substitute for an orderly document filing system within the business.
How can small businesses prepare by the end of 2026?
Start with processes and responsibilities, not by purchasing new software. The aim is to create a consistent process from the receipt of a document through to filing it in a form suitable for an audit.
- Review existing records: Note where employment contracts, health insurance documents, evidence for minijobs and other personnel records are currently stored.
- Define points of receipt: Decide how documents received by email, through portals and by post will be recorded centrally.
- Set assignment rules: Use personnel numbers, defined document types and clear file names.
- Restrict access: Personnel records contain confidential data. Only authorised people should be able to read, change or delete files.
- Identify originals: Define which signed paper documents must continue to be retained and when their destruction may be considered.
- Test payroll processing: Ask the software provider or tax consultancy whether the programme used has passed the statutory system review and how euBP submissions are handled.
Businesses wishing to replace paper files and separate spreadsheets can find one possible approach under digitalisation of processes and structured document receipt. If responsibilities, software and the order of implementation are still unclear, strategic advice with a practical digitalisation plan can help.
You should also plan a trial run. Select one employee and check whether all relevant documents can be found in full within a few minutes. This will reveal missing document types, unclear file names and duplicate filing before an audit is announced.
ibx company advises small and medium-sized businesses in Hannover and the surrounding region on introducing clear and traceable digital processes. If you would like to review your current position, you can arrange a no-obligation initial consultation on digital payroll record-keeping.