Germany

Remote’s guide to employing in Germany.

Capital city
Berlin
Currency
Euro (€, EUR)
Population size
83,149,300 (2019 est.)
Language spoken
German
01

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.

Germany Map
  • Capital city
    Berlin
  • Currency
    Euro (€, EUR)
  • Language spoken
    German
  • Population size
    83,149,300 (2019 est.)
  • Ease of doing business
    Very easy
  • Cost of living
    $$$
  • Payroll frequency
    Monthly
  • VAT - standard rate
    19%
  • GDP - real growth rate
    1.425% (2018 est.)
02

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.

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Germany risks illustration

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.

03

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

Date Holiday Name Extra information
New Year's Day
Epiphany Only observed in Baden-Württemberg, Bavaria and Saxony-Anhalt
Women's Day Only observed in Berlin
Good Friday
Easter Monday
Ascension Day
Whit Monday
German Unity Day
Christmas Day
Boxing Day
Minimum
Wage

The minimum hourly wage stipulate by law for 2020 is €9.35. A higher minimum is often set by collective bargaining agreements, which are enforceable by law.

Payroll
Cycle

Monthly salaries must legally be paid before the end of the current month.

04

Competitive benefits package in Germany

Besides providing your employees with all statutory benefits in Germany, Remote can advise on and arrange for custom benefits and perks for your employees upon request.

05

Taxes in Germany

Learn about employment taxes and how they affect your employees’ paycheck

  • Employer

    • 9.30% - Pension
    • 7.30% - Health Insurance
    • 1.525% - Nursing Care Insurance
    • 1.25% - Unemployment Insurance
    • 1.18% - Accident Insurance
  • Employee

    • 9.30% - Pension
    • 7.30% - Health Insurance
    • 1.525% - Nursing Care Insurance
    • 1.25% - Unemployment Insurance
    • 0.00% - Up to 9,000
    • 14.00% - 9,000 - 55,961
    • 42.00% - 55,961 - 265,327
    • 45.00% - Over 265,327
06

Types of leave

Statutory
leave

All full-time workers are legally entitled to 20 days paid holiday leave a year. In addition, full-time workers have 10 paid public holidays a year. The minimum amount of annual leave is 24 working days.

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.
07

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.

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