Allowance Prorating Policy Expanded

Author:Fragomen &nbsp
Profession:Fragomen
 
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At a Glance

Effective immediately, employers can prorate allowances for all work permit types based on the number of days an employee spent in Germany.

This should reduce costs for allowances since the previous policy required employers to pay an allowance throughout the whole duration of the assignment.

The situation

According to a new German Federal Employment Agency policy, effective immediately, employers can prorate allowances - which are funds the employer pays in addition to salary - for all assignment work permit types.

A closer look

Previously, the Federal Employment Agency required employers to pay allowances throughout the whole duration of an employee's assignment - even for the days the employee was not in Germany.

The previous rule only allowed prorating of allowances for employees under the International Staff Exchange Permit.

With immediate effect, this rule now applies to the payment of allowances for other assignment work permits (e.g. Intracompany Transferee (ICT) card).

Background

All other allowance-related rules are...

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