Country Guides

Germany

Quick Find

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Capital

Berlin

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Language

German

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Remote workers

9.9M

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Currency

€ Euro (EUR)

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Working hours

36-40 hours per week

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Public holidays

9 days per year

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Minimum hourly salary

€ 13.90

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Tax year

Jan 1 - Dec 31

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Date format

DD/MM/YYYY

Misclassification penalties

Fines between €30,000 - €500,000 plus up to 5 years imprisonment and personal liability for each employee's social contributions.

Fun fact

There are over 300 different kinds of bread and 1,000 types of sausages in Germany.

Employer contributions

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    Employer tax: 19.3%
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    Pension: 9.3%
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    Health insurance: 7.30% + 1.25 %
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    Long-term care: 1.53%
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    Unemployment insurance: 1.2%

Employee contributions

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    Employee tax: 19.3%-64.3%
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    Pension: 9.3%
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    Health insurance: 7.30% + 1.25 %
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    Long-term care: 1.53%
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    Unemployment insurance: 1.2%

Income tax

Rate: 0%

Single Band: Up to €12,096

Rate: 14-42%

Single Band: €12,097 - €68,429

Rate: 42%

Single Band: €68,430 - €277,825

Rate: 45%

Single Band: Over €277,825

Looking for a quick cost estimate?

Use our calculator to understand what are all the employment costs you have to consider in Germany.

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Employer of Record in Germany

What is an EOR?

An Employer of Record (requiring an AUG license in Germany) is the legal employer of a worker in Germany. As such, the Employer of Record takes care of all Germany compliance aspects of employment, including payroll, taxes, statutory benefits, employment contracts and more.

EOR responsibilities

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    Ensuring their employment is compliant with local employment laws
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    Processing local payroll
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    Filing employment related taxes and returns
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    Issuing payslips to the employee
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    Distributing salary payments

How it works

  • Company

    Maintains a direct relationship with the employee, allocates them work tasks, and manages their performance.

  • Boundless

    Takes care of payroll, taxes, benefits, ensuring the employee and the company are compliant with all legal regulations.

  • Employee

    The third party to the agreement, the employee, fulfils all of their obligations as a worker for the company.

Statutory benefits in Germany

  • Social insurance

    The social insurance includes contributions to a pension fund, national health insurance, unemployment funds, long-term care, accident insurance

Common non-mandatory benefits in Germany

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    Christmas bonus or 13th-month bonus
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    Extra annual leave
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    Flexible working hours
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    Telephone costs
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    Housing and child care subsidy
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    Life insurance
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    Company pension scheme
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    Gym membership
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    Saving plans (VML)
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Employment contract signed by both the employer and the employee

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Flexible working

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Healthy and safe working environment

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Time off due to incapacity

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Whistleblower protection

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Termination protection

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Employee representation bodies

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Redundancy payment

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Payslip

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Pay transparency

Paid time off

20-24 working days +9 public holidays (some states have extra public holidays)

Sick leave

6 weeks

Maternity leave

14 weeks (six weeks prior and eight weeks following childbirth)

Paternity leave

none

Parental leave

12-14 months

Probation

Probation periods must be expressly agreed, and must not exceed 6 months. During the probation period, the employment relationship can be terminated with 2 weeks notice of termination. Longer termination periods can be agreed.

Payment frequency

Salaries are paid monthly.

Payday

The pay date in Germany is the end of the month, however, salaries are typically paid around the 25th.

Due to the high level of protection against dismissal, it is reasonably common for employment to be ended by a separation agreement.

There are two types of dismissal in Germany: ordinary and extraordinary.

Ordinary dismissal requires that the company observe the statutory minimum notice period, which varies according to the employment length or contractual notice period if this is longer. Extraordinary dismissal allows the employer to end the employment contract immediately and is used in situations such as gross misconduct.

There are unfair dismissal protections for employees employed with an employment contract for longer than six months in companies with more than ten employees and the employer must have a socially justified reason for the dismissal.

A severance payment is not mandatory if a justified reason and proper notice are given for the termination. However, the employer should provide a severance payment for terminations caused by operational changes if they have agreed to it in a social plan with the works council.

FAQs

Hiring in Germany generally comes down to four routes. You can run payroll from your HQ for short-term cases, engage contractors for project-based work, set up a German entity to hire directly, or partner with an AUG-licensed Employer of Record. Standard EOR isn’t recognised in Germany, Boundless holds the AUG Licence to employ staff compliantly without setting up a local entity.

Contractors work well when the relationship is project-based and the person serves multiple clients. If an individual gives their full and undivided attention to your company in Germany, employment is the right structure under German law, covering entitlements like paid annual leave, sick leave, and social security contributions. For project-based contractor engagements, Boundless’s Agent of Record (AOR) service handles classification, contracts, and payments compliantly in Germany.

HR compliance in Germany means your policies and procedures respect German law and all applicable employment regulations. When you hire in Germany, this matters both to safeguard employee rights and to reduce employer risk. Compliance covers labour law, sick leave (6 weeks), annual leave (20-24 working days plus 9 public holidays), minimum wage (€13.90/hour), tax credits, and working hours. Following these is fundamental for running the business well.

EOR in Germany requires an AUG Licence, and Boundless holds one. Through our AUG-licensed temp agency, we are the legal employer of the individual for German government, tax, and employment authorities. We provide a locally compliant contract, run payroll, file employment taxes, and administer statutory benefits such as 14 weeks of maternity leave and 12-14 months of parental leave. You manage day-to-day work and fund payroll each cycle.

Boundless partners with employment lawyers and advisers in each country we operate in, including Germany. They ensure employment contracts and onboarding documents comply with the local jurisdiction. We hold detailed discussions on specific norms such as payroll, social protection, data protection, notice periods, and work-from-home regulations. When a sensitive issue arises, our internal team engages the relevant firm promptly.

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