The employment quota and the compensatory levy: who pays and how much

A metalworking firm employs 120 people on annual average, two of them severely disabled. Management considers that a respectable result. The law counts differently: six mandatory places, four of them unfilled, and for each of those places a levy of 405 € builds up month after month, to be transferred by 31 March of the following year without anyone sending an invoice.

Who counts as severely disabled

The duties in this module depend on a legal status, not on a diagnosis. The employer does not ask about illnesses. What matters is whether an employee is recognised as a severely disabled person or as a disabled person with equal status. Only that recognition counts for the quota and for most of the rights covered in the second module.

Section 2(2) SGB IX defines who is severely disabled: a person with a degree of disability of at least 50 who lawfully lives in Germany, habitually stays here or works here in a workplace within the meaning of section 156. The degree is determined on application by the authority competent under section 152, not by the employer.

The law also knows equal status, called Gleichstellung. People with a degree of disability below 50 but at least 30 should be given the same status as severely disabled people if, without that step, they cannot obtain or keep a suitable workplace. That is the rule in section 2(3) SGB IX.

Under section 151(2), the Federal Employment Agency decides on equal status, on application by the disabled person. It takes effect on the day the application arrives and may be granted for a limited period. For the employer this means that a decision can reach back to a date when nobody in the business knew about it.

People with equal status are in principle treated like severely disabled people. Section 151(3), however, excludes two areas, including the additional leave under section 208. The distinction matters in the second module when leave days are counted. For the employment quota in this module both groups count, and both belong in the employer's register.

From 20 workplaces: the mandatory quota

Section 154(1) SGB IX places the obligation on private and public employers with at least 20 workplaces on a monthly annual average. They must employ severely disabled people in at least 5 per cent of those workplaces. Under the express wording of the provision, severely disabled women are to be given particular consideration.

The threshold is not measured on a reference date. What counts is the average over the months of the calendar year. A business that briefly exceeds 20 positions in summer with extra staff and stays well below in winter can remain under the threshold on annual average, all the more since not every temporary position counts at all.

Smaller employers have a fixed number instead of the quota. An employer with fewer than 40 workplaces on annual average must employ one severely disabled person per month on annual average. With fewer than 60 workplaces the figure is two. Only from 60 workplaces does the employer actually calculate with the 5 per cent.

The law attaches the obligation to the employer, not to the individual establishment. Anyone running several branches under the same legal entity therefore looks at their workplaces together. The register under section 163, by contrast, is kept separately for each establishment; more on this in the section on notification and payment.

What counts as a workplace

Whether an employer has 19 or 21 workplaces is decided by section 156 SGB IX. Workplaces are all positions in which employees, civil servants, judges, apprentices and others hired for vocational training are employed. The law therefore counts positions, not heads, and its starting point is deliberately broad.

Section 156(3) removes two groups of positions common in small businesses. Positions filled for no more than eight weeks, by the nature of the work or by agreement, do not count, nor do positions with fewer than 18 hours a week. A helper working ten hours a week counts no more than a harvest worker on a six-week contract.

Section 157(1) adds a rule for calculating the minimum number and the mandatory places. Apprentices' positions are left out, as are those of legal or teaching trainees with a statutory right to be hired. Apprentices thus occupy workplaces within the meaning of section 156 but raise neither the threshold nor the number of mandatory places.

Rounding up and multiple credits

From 60 workplaces, 5 per cent often produces a fraction. Section 157(2) sets the rounding: fractions of 0.5 or more are rounded up. For employers with fewer than 60 workplaces on annual average they are rounded down instead, which hardly ever matters there because of the fixed figures in section 154.

The filled mandatory places are on the other side of the calculation. Under section 158(1), a severely disabled person employed in a workplace within the meaning of section 156 is credited against one mandatory place. Under subsection 4, a severely disabled employer also counts as one mandatory place, for example the owner of a small firm.

Part-time work only affects the credit below 18 hours. Someone working less than the usual hours of the business but at least 18 hours a week counts in full. Below 18 hours, the Federal Employment Agency allows the credit if the shorter working time is necessary because of the nature or severity of the disability. That is section 158(2).

Section 159 allows multiple credits. The Federal Employment Agency can credit a person whose participation in working life meets particular difficulties against up to three mandatory places. This applies especially to the groups in section 155(1), for instance people who permanently need a special assistant, or severely disabled people who have reached the age of 50.

Without any approval, double credit applies in vocational training. A severely disabled person in vocational training counts against two mandatory places. If the training company or another employer takes the person on afterwards, the double credit continues in the first year of employment. Someone coming directly from a sheltered workshop counts double in the first two years.

The compensatory levy and its amounts

As long as an employer does not reach the required number, it pays a compensatory levy for each unfilled mandatory place under section 160(1) SGB IX. The second sentence of the provision makes clear that paying does not remove the employment obligation. The levy is not a way to buy out; it is a compensation that runs alongside the duty.

The amount depends on the employment rate on annual average, that is the share of filled mandatory places in all workplaces. The further an employer is from the quota, the more each missing place costs. An employer who employs nobody at all pays the highest rate, and does so for every single mandatory place.

The wording of section 160(2) still shows the original amounts of 140, 245, 360 and 720 euros. Under subsection 3 they are adjusted to the social security reference value once that value has risen by at least 10 per cent since the last adjustment. The Federal Ministry of Labour and Social Affairs publishes the new amounts in the Federal Gazette.

The relevant notice of 2 December 2024 raises the rates from 1 January 2025. They are monthly amounts per unfilled mandatory place. The notice itself states that the higher values are payable for the first time by 31 March 2026, when the levy for the year 2025 falls due.

The footnote to section 160, as read on 23 September 2026, refers to no later notice. The higher amounts therefore apply for 2025 and 2026. An employer using an old worksheet with the figures from the statute text calculates too little and risks arrears plus surcharges.

Smaller employers have a scale of their own. It is based on the number of severely disabled people employed on annual average rather than on the rate, and sits in the second sentence of section 160(2). The notice raised it as well. It mirrors the fixed figures in section 154: one place under 40, two places under 60 workplaces.

Because the rates are monthly and the notification is broken down by month, the number of unfilled mandatory places is established month by month. The rate itself depends on the employment rate on annual average. If the workforce stays the same all year, a simple formula is enough: unfilled places times monthly amount times twelve.

Notification by 31 March, payment at the same time

The levy is not demanded in advance by an assessment; the employer works it out itself. Section 163(2) requires it to notify the employment agency responsible for its seat once a year, by 31 March at the latest, of the necessary data for the previous calendar year, broken down by month.

At the same time as this notification, under section 160(4), it pays the levy to the Integrationsamt responsible for its seat. The notification goes to the employment agency, the money to the Integrationsamt. Mixing up the two recipients costs time that is usually short just before the deadline.

The register under section 163(1) is attached to the notification, together with a copy of both documents to be forwarded to the Integrationsamt. The works council, the disabled employees' representative and the inclusion officer each receive a copy. Under subsection 6 the agreed forms of the Federal Employment Agency must be used; an electronic procedure is to be permitted.

The register is not a once-a-year document. The employer keeps it continuously and separately for each establishment. It lists the severely disabled, equal-status and other creditable people employed, and is shown to representatives of the agency and the Integrationsamt on request, not only in March.

An employer that has not reported the data, or reported it wrongly or incompletely, by 30 June receives an assessment of the calculation data from the Federal Employment Agency under section 163(3). If an employer is more than three months in arrears, the Integrationsamt assesses the outstanding amounts and collects them. Objection and legal action do not suspend that assessment.

After 31 March the Integrationsamt charges late-payment surcharges on arrears under section 24(1) SGB IV. That is 1 per cent of the outstanding amount, rounded down to 50 euros, for each month of delay that has begun. In justified exceptional cases the office may waive it, but there is no right to a waiver.

Employers without mandatory places do not have to report every year. Under section 163(4) they only file the notification if the Federal Employment Agency asks them to, as part of a representative partial survey carried out every five years. The duty to provide information on request under subsection 5 is not affected.

Failures concerning the register, the notification, information or naming of representatives are administrative offences under section 238 SGB IX, whether intentional or negligent. The fine can reach 10,000 euros, imposed by the Federal Employment Agency. A time limit also applies: after the end of the calendar year following receipt of the notification, the levy is neither claimed back nor refunded.

The annual calculation in five steps

In the day-to-day life of a small business the obligation can be put into a fixed sequence. First, the workplaces under section 156 are counted for each month, leaving out positions under 18 hours a week, short positions of up to eight weeks and apprentices. The twelve monthly figures give the annual average that decides threshold and scale.

The second step is the number of mandatory places: one under 40, two under 60, above that 5 per cent with the rounding of section 157. In the third step the creditable people are counted for each month, with their multiple credits and the agency's approvals, which should be recorded in the register.

In the fourth step target and actual figures are compared. The difference gives the unfilled mandatory places in each month; the annual average gives the employment rate or, for small employers, the number of severely disabled people employed. Together they determine the monthly amount from the notice.

In the fifth step the monthly amounts are added up, the notification and the register are sent to the employment agency and the total is transferred to the Integrationsamt, both by 31 March. Monthly data kept up to date spares any reconstruction.