Are you operating in the construction industry and sending employees to Germany? Don’t forget about SOKA-BAU!

Whether you’re working in the German construction industry in Germany or sending your people there, pay attention!

You are subject to mandatory contributions to the social fund SOKA-BAU. If you forget about it by mistake, you won’t escape the obligations, and you may even face high penalties. Basic information can be found in this article. If you need assistance navigating the SOKA-BAU maze, don’t hesitate to contact our team of professionals. We’ll help you.

What is SOKA-BAU?

SOKA-BAU is often referred to as a “holiday fund” and provides equivalent social security for all employees in the German construction industry. Without contributions to SOKA-BAU, workers on short-term contracts with various employers might not accrue entitlements such as vacation days. However, thanks to contributions to SOKA-BAU, they gain these entitlements even if they work at different sites throughout the year.

Who does SOKA-BAU apply to?

Mandatory contributions to SOKA-BAU apply to professions such as bricklayers, carpenters, painters, and many others. Contributions are also required from construction and transportation engineers, surveyors, architects, as well as construction technicians and maintenance workers. But beware, there are exceptions! The mandatory contribution rate to SOKA-BAU is 15.1% of gross monthly wages, and contributions must be paid by the 28th day of the following month. Additionally, electronic reports must be submitted regularly every month.

Once again, if you want certainty, seek advice from a professional. They’ll advise you on how to access some of the social benefits of the German labor market that you may not have heard of.

If you, as a liable person, ignore SOKA-BAU, according to German regulations, the statutory body’s personal responsibility applies, which can have unpleasant consequences.

Who doesn’t pay SOKA-BAU?

Employers and employees whose work is not directly related to construction may be exempt from contributions to the “holiday fund” – for example, heating engineers, plumbers, electricians, electrical fitters, etc. Contributions to SOKA-BAU also do not apply to administrative staff, sales representatives, or IT professionals who, although they work in construction, do not work directly on construction sites.

Why is SOKA-BAU advantageous?

In addition to the entitlement to vacation pay, SOKA-BAU brings additional benefits to employees in the construction industry. Thanks to these contributions, they are also entitled to reimbursement of medical expenses, health and accident insurance, unemployment insurance, and yes, even pension insurance. They can also claim reimbursement for professional training courses from the fund. However, this mainly applies to regular employees registered with companies in Germany and not to dispatched employees.

Navigating mandatory contributions in Germany is complex, and we’re ready to help. If you need advice on how contributions to SOKA-BAU work or want to learn more about this social fund, we at ProfiDeCon are here to help.