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Get the GuidePension: 9.3%
Health insurance: 7.3%
Long-term care: 1.53%
Unemployment insurance: 1.2%
Pension: 9.3%
Health insurance: 7.3%
Long-term care: 1.53%
Unemployment insurance: 1.2%
Paid time off: 20-24 working days +9 public holidays (some states have extra public holidays)
Paternity leave: none
Sick leave: 6 weeks
Parental leave: 12-14 months
Maternity leave: 14 weeks (six weeks prior and eight weeks following childbirth)
While the person is in Germany, they are employed and payrolled directly by the company’s HQ entity.
Cons: This may appear attractive, but it generally isn't legal in the long term. HQ payroll won't be possible if the person is not a tax resident in the HQ country.
Setting up a local company in Germany is very time-consuming and complicated. That is further complicated by the monthly activities - payroll needs to be calculated and run every month, taxes filed, benefits extended, change of rules and regulations followed. Here is an overview of everything you will find yourself needing to do.
When you hire employees in Germany, you have certain obligations as an employer. HR compliance is about ensuring your policies and procedures respect German law and all applicable regulations regarding employment and work practices. Complying with local employment law in Germany is fundamental for the correct running of your business - not only because these laws are in place to protect employees and guarantee their rights are safeguarded, but to minimise your risk of liabilities as an employer. Being compliant means respecting and following all local labour laws, sick leave and illness benefits, annual leave, minimum wage, tax credits, working hours regulations.
As with every other country, there are certain costs associated with employing a worker in Germany that come on top of the gross salary you are offering. In Germany those are contributions employers make to pension, health insurance, long-term care, and unemployment insurance. To view the exact percentages and amounts given the salary you are planning to offer, you can use our handy calculator tool.
In Germany, the model for employing a worker on behalf of another requires an AUG Licence. Employing someone through the AUG Licence temp agency means that Boundless is the legal employer of the individual, as far as the German government, tax, and employment authorities are concerned. We are responsible for:
Boundless as the Employer of Record Germany (AUG Licence temp agency) files all pertinent taxes and social contributions as they relate to the compliant employment of an individual in their home country.
We carefully choose employment lawyers or advisories to partner with in each country we operate in, including Germany. They ensure the Germany employment contracts and any other relevant documents required for new employees comply with the local jurisdiction. We have thorough discussions on specific norms such as payroll services, social protection, data protection, notice period or work-from-home regulations. Whenever a potentially sensitive issue arises in Germany, our internal team contacts the relevant firm to ensure all steps are taken to resolve it promptly.
Any new employee that is locally employed through an Employer of Record (AUG Licence temp agency) gets full employment rights and benefits as specified in local law. They get a locally compliant employment contract, statutory maternity leave, annual leave, illness benefits, any relevant tax credit, and many more. All Germany-based employees receive healthcare through the public healthcare system.
In Germany, both employers and employees have to pay taxes and social contributions. For employers these include pension, health insurance, long-term care, and unemployment insurance and for employees they include pension, health insurance, long-term care, unemployment insurance, and income tax. To get a clear overview with both employee and employer taxes, use our salary breakdown calculator, submitting any additional data needed and get a downloadable pdf like this one.
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