Red tape and working time: what 3, 7 and 23 percent measure

Depending on the study, red tape eats 3, 7 or 23 percent of working time, and that is no contradiction: the figures answer different questions. KfW had businesses estimate the effort for statutory obligations (6.9 percent on average, about 3 at the median). The Institut der deutschen Wirtschaft (IW), a German economic research institute, had employees estimate the share spent on reports and documentation, internal ones included (about 23 percent). The values must not be mixed, and none of them says how much time automation would save in your business.

What KfW asked

KfW, the German state development bank, surveys medium-sized firms every year (the KfW SME panel). In the wave from February to June 2024, 9,556 firms took part. They were asked: “What do you estimate the effort is for your company to meet all statutory requirements?”, to be given in working hours per month, for the year 2023. From that KfW calculates the share of the working time of all employees.

All statutory requirements are meant: forms, evidence and notifications to tax and social security authorities, but also compliance with data protection, occupational safety or environmental rules. Not included are long approval procedures, authorities that are hard to reach and disputes over interpretation.

On average that is 32 hours a month per firm, 6.9 percent of working time. The mean is the average, which a few very burdened firms push upward. The median is the middle value: half of the firms are below it. It is about 15 hours a month and about 3 percent. For a quarter of the firms it is at most eight hours, for every tenth at least 100.

For businesses with 5 to 50 employees KfW gives average shares: 5.3 percent for 5 to under 10 employees, 3.7 percent for 10 to under 50. Below 5 employees it is 7.7 percent, and the construction sector, at 8.1 percent, is above the overall average. The relative burden falls with size, because the tasks do not grow in the same proportion as headcount. Of the hours, external service providers perform 34.6 percent on average (KfW assumes mainly tax, business and legal advisers). They are counted in the figure.

What the IW asked

In 2025 the IW surveyed about 5,000 employees. They were asked to estimate the share of their working time they usually spend per week on reporting and documentation obligations. The IW deliberately did not distinguish between statutory and internal obligations, because employees cannot always tell them apart.

Employees without management responsibility gave about 23 percent on average, managers about 30 percent. The median is 20 percent, and every second person spends a day or more a week on it. The IW itself writes that this, on the one hand, overstates the effort for state-imposed bureaucracy methodologically, because internal matters count as well. On the other hand, documentation covers only part of what is usually understood as bureaucracy. The short report gives no breakdown by firm size.

Side by side

An example with invented data shows the gap. A business has 12 employees with about 150 working hours each per month (KfW uses roughly 34 weekly hours; times 52 weeks divided by 12 months is about 149), 1,800 hours in total. With the KfW average for 10 to under 50 employees, 3.7 percent, that would be 1,800 × 0.037 = 66.6, so about 67 hours a month for statutory obligations. With the IW’s 23 percent it would be 1,800 × 0.23 = 414 hours, a little over six times as much (414 : 66.6 ≈ 6.2). Both calculations are correct, because they answer different questions. Your business can be far above or below the average in either.

If you take the KfW median of 15 hours a month at average labour costs of 41.30 euros per hour, that gives 15 × 41.30 = 619.50 euros a month. The Federal Statistical Office gives the 41.30 euros for the year 2023, for manufacturing and services excluding public administration, and KfW uses the same value. Newer, higher values exist for later years, which I have not checked at the source. The 619.50 euros is a guide value from averages, not a value for your business.

Two official measures that often get added

The bureaucracy cost index of the Federal Statistical Office captures the “classic paperwork” under federal law, meaning applications, notifications and evidence, and relates the costs to January 2012 (= 100). It measures no hours and no share of working time. For January to March 2026 it stands at 96.33, 96.30 and 96.37, and the page is dated 19 May 2026.

The compliance burden (Erfüllungsaufwand) is defined more broadly. The National Regulatory Control Council (NKR) examines draft laws of the federal government and understands by it the measurable time and costs that a new rule triggers or saves. According to its 2026 annual report (advance version), annual compliance costs fell by about 6.8 billion euros in the reporting period 2025/26 (July 2025 to June 2026), about 6.4 billion of it for citizens. The relief comes almost entirely from one law, above all the repeal of an obligation for newly installed heating systems, whose costs had not yet been incurred. Business was relieved by about 45 million euros, while bureaucracy costs in the narrower sense rose by about 1.3 billion euros.

Both measures describe changes caused by laws. Neither is a share of working time or a stock of hours in the office. The IW calls the index largely constant, and yet more firms and employees complain: according to its survey, the effort has risen for one in three over the past two years and fallen for fewer than 8 percent.

What this means for automation

None of the sources breaks down which part of the time can be automated. In my assessment filling in, transferring and filing qualify, reading, deciding and follow-up questions less so. That is the author’s practical assumption, not measured. How large each part is, nobody has recorded in these sources. Which processes are suitable in principle is covered in Process automation in a small business: the basics, and when it is better to leave it in When you should not automate a process.

It only becomes reliable with your own measurements. An example with invented figures: an office assigns 25 incoming emails a month to a project and needs 12 minutes for each. That is 25 × 12 = 300 minutes, so 5 hours a month. Whether automation saves any of it is shown by a before-and-after comparison in your own business.

Which obligations apply to your business and how you meet them is for your tax adviser, trade association or legal adviser to clarify in the individual case. All statements apply as of November 2026.

What you can do now

1. For every percentage, ask four things: who was asked, what exactly, mean or median, and how large were the businesses?
2. For four weeks, note for each office process how often it occurs and how many minutes it takes.
3. Separate what is a statutory obligation from what you document voluntarily or internally.
4. Only then check which of the measured processes are suitable for automation at all.