Hire employees and contractors in Germany

Remote’s guide to employing in Germany.

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  • Capital city

    Berlin

  • Currency

    Euro
    (, EUR)

  • Population size

    83,149,300
    (2019 est.)

  • Languages spoken

    German

  • Availability

    Remote-Owned Local Entity

    We own our own entity in the countries where we operate to shield your company from risk and provide you and your employees with the signature Remote experience.

Facts & Stats

Germany (German: Deutschland), officially the Federal Republic of Germany (German: Bundesrepublik Deutschland), is a country in Central and Western Europe. Germany is a great power with a strong economy; it has the largest economy in Europe, the world's fourth-largest economy by nominal GDP, and the fifth-largest by PPP. As a global leader in several industrial and technological sectors, it is both the world's third-largest exporter and importer of goods.

  • Capital city

    Berlin

  • Currency

    Euro
    (, EUR)

  • Languages spoken

    German

  • Population size

    83,149,300 (2019 est.)

  • Ease of doing business

    Very easy

  • Cost of living index

    $$$$ (32 of 139 nations)

  • Payroll frequency

    Monthly

  • VAT - standard rate

    19%

  • GDP - real growth rate

    1.425% (2018 est.)

Grow your team in Germany with Remote

Employing in Germany requires employers to own a legal entity in the country and manage payroll, tax, benefits and compliance through their own in-country resources. The complexity of employment regulations in Germany makes full compliance with employment laws a burdensome process.

Through Remote’s Global Employer of Record solution, your team is employed by our local legal entities in each country, and we take care of payroll, tax, benefits and compliance so you can focus on what matters most -- your people.

Risks
of misclassification

Germany, like many other countries, treats self-employed individuals or contractors and full-time workers differently and there are risks associated with misclassification.

Employing in Germany

Employment law in Germany is not contained under a single law. Instead it is governed by statutory regulations codified in (among other laws) the German Civil Code, then furthermore governed by various federal acts such as the Part-time and Fixed-term Work Act, Employee Leasing Act, Holidays Act, Act on Maternity Protection and the Dismissal Protection Act. Furthermore, collective labour law through codetermination, trade unions and collective bargaining plays a role.

German employment law provides strong labor conditions and protections for employees, so employing people will generally be an important investment and commitment.

Temporary agencies are popular options for more flexible workforce arrangements. For these and many other reasons, the following are only guidelines in the broadest sense, and professional legal services are recommended when employing in Germany.

Public holidays

Below are national public holidays applicable for all regions in this country. Remote customers have access to a detailed list of regional public holidays within the Remote platform. Sign up now to access all public holiday information.

Minimum Wage

The minimum hourly wage stipulate by law for 2022 is €9.82. A higher minimum is often set by collective bargaining agreements, which are enforceable by law.

Payroll Cycle

For customers of Remote, all employee payments will be made in equal monthly installments on or before the last working day of each calendar month, payable in arrears.

Onboarding Time

We can help you get a new employee started in Germany fast. The minimum onboarding time we need is only 8 working days.

Our team ensures your employees are onboarded and paid as quickly as possible while keeping your business compliant with all local employment legislation. The minimum onboarding time begins after the employee submits all required information onto the Remote platform. The onboarding timeline is also dependent upon registration with local authorities.

For all non-nationals of the country of employment, the Right to Work assessment (if applicable) will add three extra days to the total time to onboard. There may be extra time required if we need to follow-up on the right to work assessment.

Please note, payroll cut-off dates can impact the actual first day of employment. Remote has a payroll cut-off date of the 10th of the month unless otherwise specified.

Competitive benefits package in Germany

Remote supports our clients by offering competitive benefits packages that will help you attract and retain the best talent across the globe. Our benefits specialists have done the research on norms and requirements in each local market and have crafted packages that will allow your employees to thrive, no matter what country they call home. 

Our benefits packages in Germany are tailored to fulfil the local needs of your employees. Typically, our packages contain some or all of the following benefits:

  • Health Insurance
  • Dental Insurance
  • Vision Insurance
  • Mental Health Support
  • Pension or 401(K)
  • Life and Disability Insurance

Local market insights

  • In Germany, only 10%* of employers offer supplemental health insurance to their workforce. (*based on 3rd-party market research from our partners)
  • The country has a robust public health system, and while supplemental health insurance is not the norm today, it provides employees with access to a wider range of options for providers and specialists, as well as shorter wait times. Our plans also offer global coverage (excluding the US) to protect your employees when they are traveling outside their home country.

Our core benefits (which often include things like healthcare) are required in most countries where we hire. We do not require customers to offer benefits in Germany due to its strong public system and local laws that protect us (and you!) against claims of non-discriminatory hiring practices. However, we do recommend that employers in Germany offer benefits to their employees based on market standards. Note that we do not add a markup on any benefits premiums or administration costs.

If you'd like specific information about our benefits packages in Germany, start onboarding your first employee with Remote today.

For more insight into fair equity and benefits best practices, download our Global Benefits Guide and share with the rest of your hiring team.

Calculate the cost to hire an employee
in Germany

Taxes in Germany

Learn how employment taxes and statutory fees affect your payroll and your employees’ paychecks in Germany.

  • Employer

    • 9.30% - Pension

    • 7.95% - Health Insurance

    • 1.525% - Nursing Care Insurance

    • 1.25% - Unemployment Insurance

    • 1.18% - Accident Insurance

    • 2.75% - Sickness/maternity leave allocation

  • Employee

    • 9.30% - Pension

    • 7.30% - Health Insurance

    • 1.525% - Nursing Care Insurance

    • 1.25% - Unemployment Insurance

    • 0.00% - Income tax up to 9,744 Euro per annum

    • 14 to 42% - Income tax for 9,744 - 57,918 Euro per annum

    • 42% - Income tax for 57,918 - 274,612 Euro per annum

    • 45% - Income tax for over 274,612 Euro per annum

Types of leave

Statutory leave

All full-time workers are entitled to 10 paid public holidays per years. Full-time workers are also entitled to at least 20 days of paid time off if they work five-day work weeks or 24 days of paid time off if they work six-day work weeks. Employers may offer additional paid vacation days at their discretion.

Pregnancy and maternity leave

Expecting mothers are entitled to 6 weeks of pregnancy leave (before the due date) and at least 8 weeks maternity leave (after childbirth).

Parental leave

In addition to maternity leave, the parents can take extended parental leave for up to 36 months until the child turn 3 years. Parents can choose to work part-time or up to 30 hours per week during parental leave.

Other leave

  • Adoption: the same rules as for maternity leave applies for adoptions.

Employment termination

Termination process

Germany employers in general can provide any fair reasons for termination of an employee. Any dismissal from the end of the employer for an employee that has been employed longer than six months has to be "socially justified" by the following:

  • Person-related reasons, such as long-term illness;
  • Termination with consent of the employee through a termination agreement;
  • Conduct-related reasons, for example repeated breaches of employment terms after prior warning or serious misconduct; or
  • Operational reasons, for example the shutdown of the company or economic downturns.

Notice period

The statutory notice period for an employer depends on the duration of employment, with a minimum of four weeks for those employed less than 9 months and up to 7 months for those employed more than 20 years.

Probation periods

The maximum length of a probationary period is 6 months. The minimum statutory notice period during the beginning of a new employment relationship is 2 weeks.

During the probationary period, the applicable statutory notice period can be reduced to a minimum of two weeks, except as otherwise provided in other applicable regulations (e.g. a collective bargaining agreement). During the probationary period, the employer does not need a reason for termination to dismiss the employee. A termination during the probationary period is only ineffective if it is immoral or contrary to faith.

Visa & Immigration

Visa Options

Depending on your employee's situation, we may be able to sponsor their visa application. Talk with our team today.

If Remote visa sponsorship isn't the best route for your employee, below are other possible visas they could apply for. We can also help with the visa application process.

These visa options should not be considered legal advice and are subject to change. The estimated time will vary per case.

Other visa options
  • Intra-Company Transfer Permit (EU Directive 2014/66)

    This process is a temporary residence authorization for Intra-Company Transfers (EU ICT), according to Directive 2014/66/EU. It is only applicable to assignees falling into management/specialist or trainee categories sent to Germany for over 90 days from outside the EEA and has a maximum total duration of stay of three years for managers and specialists and one year for trainees. If an applicant meets the qualifying criteria for this process, he/she may not apply under an alternative route for assignees. A posted worker notification may be required, depending on the industry and posting type.

    Time until employee can start work: 2 to 4 months

  • Residence Permit for Employment (Local Hire)

    A residence permit for employment is required for qualified non-EEA/Swiss nationals to work and reside in Germany.

    Time until employee can start work: 3 to 7 months

  • Blue Card (Blaue Karte)

    The Blue Card (Blaue Karte) is applicable to highly-skilled employees with a local job offer and a salary at least two-thirds of the German pension fund contribution ceiling (Beitragsbemessungsgrenze der deutschen Rentenversicherung), which changes slightly every year. The Blue Card regulation also applies to skilled employees in shortage occupations (‘Mangelberufe’ - scientists, mathematicians, engineers, doctors in human medicine, academic specialists in IT and communication) with an annual salary of at least 52% of the German pension fund contribution ceiling. For shortage occupations, the labour authorities must check that the employment conditions match the local standards, and the employer must submit an official format job description.

    Time until employee can start work: 1 to 2 months

  • Van der Elst (Assignment from Within the EEA)

    A type of visa or work permit available to non-EEA/EFTA citizens employed by and working for a company in an EU/EEA/EFTA country, that allows them to work for that company in another EEA/EFTA member state, subject to meeting certain eligibility conditions.

    Time until employee can start work: 1 to 2 months

  • Residence Permit for Employment (IT Specialists)

    IT specialists with a firm job offer in the IT sector in Germany meeting the minimum required gross annual salary of EUR 51,120, with proof of at least three years of experience in the IT sector over the last seven years, and at least B1 level German language skills can obtain a residence permit without having their foreign qualifications officially recognised.

    Time until employee can start work: 1 to 3 months

  • Temporary Assignment (Under 90 Days)

    Employees seconded to Germany for up to 90 days to fit, install, maintain or repair machines, equipment, computer programmes, or other technical systems at a client site or at a branch office of their own company must submit a labour notification. This process usually applies where the assignee is being sent to fulfill foreign contractual obligations to a German client company. There must be an existing purchase order in place between the employing company, which has manufactured a machine or designed software, and the client company or branch office. Assignees must remain on foreign payroll and contract. A posted worker notification may be required, depending on the industry and posting type.

    Time until employee can start work: 1 to 2 months

  • Residence Permit for Employment (International Personnel Exchange)

    The International Personnel Exchange programme is for intra-company transfers where, for every foreign employee who comes to Germany, an employee of the domestic part of the company must be sent abroad. For companies which qualify, the residence permit process is somewhat expedited, as the four-week local labour market search can be waived. However, note that if the applicant qualifies for the EU ICT, this process cannot be followed. A posted worker notification may be required, depending on the industry and posting type.

    Time until employee can start work: 1 to 3 months

Net Migration

In 2020, Germany experienced a net migration of +543,822.

Best Destinations for Remote Work

From our Best Destinations for Remote Work report, the following made the top 100 list:

  • Berlin
  • Hamburg
  • Munich
  • Cologne
  • Füssen

Discover the rest of highly ranked cities for remote working and create your own custom list. Report

Tax Treaties

Germany has a tax treaty with Albania, Algeria, Argentina, Armenia, Australia, Austria, Azerbaijan, Bangladesh, Belarus, Belgium, Bolivia, Bosnia and Herzegovina, Bulgaria, Canada, China, People's Republic of, Costa Rica, Cote d'lvoire, Croatia, Cyprus, Czech Republic, Denmark, Ecuador, Egypt, Estonia, Finland, France, Georgia, Ghana, Greece, Hungary, Iceland, India, Indonesia, Iran, Ireland, Republic of, Israel, Italy, Jamaica, Japan, Jersey, Kazakhstan, Kenya, Korea, Republic of, Kosovo, Kuwait, Kyrgyzstan, Latvia, Liberia, Liechtenstein, Lithuania, Luxembourg, Macedonia, Malaysia, Malta, Mauritius, Mexico, Moldova, Mongolia, Montenegro, Morocco, Namibia, Netherlands, New Zealand, Norway, Pakistan, Philippines, Philippines, Poland, Portugal, Romania, Russia, Serbia, Singapore, Slovak Republic, Slovenia, South Africa, Spain, Sri Lanka, Sweden, Switzerland, Syria, Taiwan, Tajikistan, Thailand, Trinidad and Tobago, Tunisia, Turkey, Turkmenistan, Ukraine, United Arab Emirates, United Kingdom, United States, Uruguay, Uzbekistan, Venezuela, Vietnam, Zambia, and Zimbabwe.

Disclaimer

The information contained in this site is for general guidance on matters of interest only. The application and impact of laws can vary widely based on the specific facts involved. Given the changing nature of laws, rules and regulations, and the inherent hazards of electronic communication, there may be delays, omissions or inaccuracies in information contained in this site. Accordingly, the information on this site is provided with the understanding that the authors and publishers are not herein engaged in rendering legal, accounting, tax, or other professional advice and services. As such, it should not be used as a substitute for consultation with professional accounting, tax, legal or other competent advisors.

While we have made every attempt to ensure that the information contained in this site has been obtained from reliable sources, Remote is not responsible for any errors or omissions, or for the results obtained from the use of this information. All information in this site is provided “as is”, with no guarantee of completeness, accuracy, timeliness or of the results obtained from the use of this information, and without warranty of any kind, express or implied, including, but not limited to warranties of performance, merchantability and fitness for a particular purpose. In no event will Remote or employees thereof be liable to you or anyone else for any decision made or action taken in reliance on the information in this site or for any consequential, special or similar damages, even if advised on the possibility of such damages.

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