EWS helps you to hire an international workforce quickly and compliantly, without setting up a legal entity locally. If you’d like to get in touch about our employer of record solution in Germany, click here
Country Introduction – Germany:
Capital – Berlin
Currency – Euro
GDP – 4.26 trillion USD (2021)
People/Nationality- German
Language – German
Major Religion – Christianity
Population – 83,290,705 (2023)
Germany possesses a robust and influential economy characterized by its industrial strength, export focus, innovation culture, and commitment to renewable energy transition. It excels in manufacturing, especially automobiles, and is a global export leader. Its skilled workforce, emphasis on research, and social market economy contribute to its prosperity.
Holds the position of being the world’s fourth-largest economy, following the United States, China, and Japan. Additionally, it claims the top spot as the largest economy in Europe. Globally, it ranks as the third-largest exporter, with the service sector contributing a significant 70% share to its GDP.
Germany’s economic approach blends elements of a free-market system with a strong social welfare structure. This “social market economy” aims to harmonize economic progress and social well-being, affording citizens a superior quality of life, extensive healthcare, and various social advantages.
It is known for its strong economy, top-tier education, efficient infrastructure, rich culture, commitment to the environment, quality healthcare, social welfare, safety, diverse landscapes, culinary delights, efficient public transport, and civic engagement. These factors combine to create a high standard of living and a positive overall experience for residents and visitors alike.
Life in Germany provides a high quality of living with efficient infrastructure, cultural richness, a strong economy, excellent education, and comprehensive social support. The country’s commitment to sustainability, diverse landscapes, culinary delights, and active civic engagement add to its appeal. A safe and stable environment, work-life balance, and global connections make Germany an attractive destination for residents and visitors alike.
Contract of Employment
In Germany, it is a legal requirement for an employment agreement to be in written form, and this document must be provided to the employee within one month from the start of their employment.
Probation Period
The duration of the probation period can vary but is typically limited to a maximum of six months. For certain positions or collective agreements, the duration might differ.
Termination
Employees in Germany are generally subject to notice periods that increase with the length of their employment. The legal minimum notice periods are as follows:
– Up to 2 years of employment: 4 weeks’ notice
– 2 to 5 years of employment: 1 months’ notice
– 5 to 8 years of employment: 2 months’ notice
– 8 years of employment or more: 3 months’ notice
Employers are also required to provide notice to terminate an employment contract. The notice periods for employers are usually longer than those for employees and depend on various factors, including the length of the employment.
Working Hours
The standard legal working week in Germany is generally 40 hours. However, collective agreements, industry norms, and specific job roles can lead to variations in working hours. Many companies offer flexible working arrangements, including part-time work, job-sharing, and flexible schedules to accommodate employees’ needs.
Overtime
employees in Germany are not allowed to work more than 48 hours per week, including both regular working hours and overtime. However, there are exceptions for specific industries or cases, subject to certain conditions. Overtime regulations also apply to night work and work on Sundays and public holidays. Additional compensation or time off may be granted for such hours.
13th Month Pay
In Germany, the concept of a “13th month pay” or “Christmas bonus” is not a standard legal requirement, as it is in some other countries. However, some employers in Germany may voluntarily offer a year-end bonus to their employees, especially during the holiday season.
Annual Leave
Full-time employees are generally entitled to a minimum of 20 working days of paid vacation per year, based on a standard five-day workweek. This corresponds to four weeks of vacation.
Sick leave
Sick leave in Germany, known as “Krankmeldung,” involves notifying the employer of illness, providing a medical certificate for absences exceeding three days, and receiving continued payment during the sick leave period. After six weeks, health insurance takes over payments.
Employees are protected from termination during sick leave, and collective agreements may offer additional benefits. Return-to-work certification is required, and rehabilitation options are available for prolonged illness. Familiarity with these regulations is essential for both employers and employees.
Maternity and Paternity Leave
Maternity leave typically begins six weeks before the expected due date and continues for eight weeks after childbirth. It is mandatory to take at least eight weeks after childbirth. The total maternity leave period is 14 weeks. However, the duration can be extended under certain circumstances, such as multiple births or complications.
Fathers are eligible for paternity leave of up to two months (or 65 working days) within the first eight weeks after the birth of the child. Paternity leave is available to fathers who are employed, self-employed, or engaged in a freelance profession and are covered by statutory health insurance.
After maternity leave, parents can transition to parental leave, which can last until the child’s third birthday. During parental leave, employees can work reduced hours or not work at all.
VAT / GST
In Germany, the typical VAT rate is 19%, which is levied on most goods and services. There is also a lower rate of 7%, applicable to specific items like certain food products, books, cultural activities, hotel stays, and healthcare services. Additionally, certain goods and services, such as cross-border and international transportation, are exempt from German VAT.
Income Tax
The income tax brackets for 2023 are as follows:
| Income | Tax Rate |
| Less than 10.908 euros | 0% |
| 10.909 – 62.809 euros | 14% to 42% |
| 62.810 – 277.825 euros | 42% |
| More than 277.826 euros | 45% |
Employer / Employee Contributions
In Germany, both employers and employees contribute to social security programs. Employers contribute to health, pension, unemployment, and accident insurance, while employees share costs for health, pension, and nursing care insurance.
These contributions fund benefits like healthcare, retirement, and unemployment support. The amounts vary based on factors like income and insurance type. Income tax and solidarity surcharge are also deducted from employee earnings.
Public Holidays
In Germany, public holidays, known as “Feiertage,” vary by state due to the federal structure of the country. However, there are several nationwide public holidays, and each state also has its own regional holidays. Here are some of the key nationwide public holidays in Germany:
January 1 – New Year’s Day
Date varies (Christian holiday) – Good Friday
Date varies (Christian holiday) – Easter Monday, the day after Easter Sunday.
May 1 – Labour Day
Date varies (Christian holiday) – Ascension Day
Date varies (Christian holiday) – Pentecost Monday
October 3 – Day of German Unity
December 25 – Christmas Day
December 26 – Boxing Day
In addition to these nationwide holidays, each state in Germany has its own set of regional public holidays, such as state foundation days, religious observances, and cultural events.
Severance Pay
Severance pay is not legally mandated in most cases. It is generally negotiated between the employer and the employee or can be provided based on collective agreements or company policies. In cases of immediate termination, such as serious breaches of contract, the employer is not required to provide severance pay.
Work and Residence Permits (Expatriates)
EU/EEA/Swiss Nationals: Citizens of European Union (EU), European Economic Area (EEA), and Switzerland generally have the right to work and reside in Germany without a specific work permit. However, registration with local authorities may be required.
Non-EU/EEA/Swiss Nationals: Non-EU/EEA/Swiss nationals typically need a residence permit to work and live in Germany.
Application Process: Expatriates generally need to apply for a residence permit at a German embassy or consulate in their home country before entering Germany. Some permits may also be applied for after entering Germany.
Requirements: Requirements for obtaining a residence permit may include a valid job offer, sufficient funds, health insurance, accommodation, and meeting specific criteria for the chosen permit category.
Duration: Residence permits may be granted for a limited duration, often tied to the employment contract. Renewal is possible in many cases.
Family Reunification: Some permits allow for family members to join the expatriate in Germany.
Integration Courses: Some permit holders may be required to attend integration courses to learn German and gain familiarity with German society.
Permanent Residence: After a certain period of lawful residence, expatriates may be eligible to apply for permanent residence or settlement permits.
The $100K Visa Shock: Why Global Hiring Just Replaced the H-1B
How to Set Up Payroll For Hpc And Ai Teams
Contracting Machine Learning Talent Abroad
Everything on Hiring Foreign Phds In German Tech Labs
Cross-Border Ip Protection In R&D Teams
How To Classify Freelancers In Tech Innovation
How Eor Helps Tech Firms Legally Hire In Germany
Dual Contract Structure For International Researchers
Data Protection Obligations For Remote Tech Staff
Germany Research Visa Vs Skilled Worker Visa
Everything on Nis2 Directive Compliance For Eu Tech Workers
Global Mobility For Deep Tech Startups In Germany
Payroll For EU Embedded Systems Developers
Relocation Support For Semiconductor Experts on EU
The Absolute Way to Hire Ai Engineers In Germany
How to Manage Benefits For German Tech Hires
Germany’S Blue Card Process For Engineers
Everything on Germany R&D Employment Compliance
Remote Hiring Of Cybersecurity Analysts In Eu
Visa Pathways For Quantum Computing Researchers
Onboarding Robotics Specialists Across EU Borders
Workforce Planning In Ai-Driven Logistics And Infrastructure
Visa Processing For High-Tech Infrastructure Staff
Managing Global Mobility In Sustainable City Projects
Cross-Border Team Management In Saudi Data Centers
Hiring Skilled Labor For Green Hydrogen Facilities
Digital Twin Technology Hiring Trends In Saudi Construction
Employer Obligations In Public-Private Energy Initiatives
Navigating Local Labor Laws For Solar Energy Teams
Talent Acquisition In The Saudi Mining Sector
Eor Solutions For Ai Engineers In Mega Projects
Regulatory Challenges In Hiring For Giga Construction Projects
Contractor Compliance In Smart City Developments
Classification Of Engineering Consultants In Vision 2030 Projects
How To Manage Workforce For Neom-Based Tech Projects
Eor For Multinational Mining Firms Operating In Saudi Arabia
Employer Of Record For Wind Energy Projects In The Gulf
Relocation Logistics For International Clean Energy Experts
Hiring Strategies For Large-Scale Construction Projects In Ksa
How To Onboard Digital Infrastructure Experts In Saudi Arabia
Payroll Setup For Renewable Energy Workers In Ksa
Strategic Relocation To Riyadh Or Doha: A Guide for Global Employers
Work Visa Processing In Qatar And Saudi Arabia
Qatar Nationalization Policy And Foreign Firms
Cost Of Setting Up A Business In Qatar: A Guide for Global Employers
Saudi Labor Court And Dispute Handling for Global Employers
Cross-Border Payroll For Ksa And Qatar Teams
End Of Service Benefits Saudi Arabia: A Guide for Global Employers
How To Manage Expat Benefits In Qatar for Global Employers
Expanding Into New Markets: Vendor Risks You Should Flag
A Guide to Cross-Border Equity Vesting for Tech Startups
Employer Branding for Multinational Teams: What Works Now
What Global C-Level Leaders Miss About Digital Nomad Visas
Succession Planning for Distributed Teams: A Practical Guide
Relocation Budgeting For Global Tech Firms
Latam Hiring Strategy: What Global Companies Should Know
Risk Of Permanent Establishment Explained
Managing Intellectual Property In Remote Work
Benefits Benchmarking Globally for Global Companies
How to Benchmark Compensation Across 100+ Countries in 2025
Checklist: Preparing HRIS for Fast International Scalability
Biometric Data in Global Payroll: Legal Boundaries Explained
8 Regulatory Updates Impacting Global HR in 2025
What are Hidden Costs of In-House Payroll?
Why Companies are Thinking Differently About Relocation
Is Your Global Mobility Program Outgrowing Spreadsheets?
Remote Work Visas: A Growing Trend in Global Mobility
Hiring in Europe Post-Brexit: What You Need to Know
Tips for Managing Multi-Time Zone Teams Successfully
Relocation Packages: What Top Talent Expects in 2025
Banking and Payroll Challenges in Saudi Arabia Markets
The Legal Risks of Misclassifying Global Workers
Why Scalability Should Drive Your Global HR Strategy
How EWS Streamlines Global Mobility for Tech Talent
Lithuania – Employer of Record
Kosovo – Employer of Record
Finland – Employer of Record
Namibia – Employer of Record
Nepal – Employer of Record
Spain – Employer of Record
Latvia – Employer of Record
Ireland – Employer of Record
Cyprus – Employer of Record
Czech Republic – Employer of Record
Italy – Employer of Record
Indonesia – Employer of Record
South Africa – Employer of Record
Tunisia – Employer of Record
Bosnia – Employer of Record
Moldova – Employer of Record
Five Tips For Improving Employee Engagement
Netherlands – Employer of Record
Germany – Employer of Record
France – Employer of Record
Portugal – Employer of Record
Bulgaria – Employer of Record
Austria – Employer of Record
Hungary – Employer of Record
Slovenia – Employer of Record
INCLUSIVITY IN THE TEAM MAKES EVERYONE WIN
Thailand – Employer of Record
Sri Lanka – Employer of Record
The Significance of an Employer of Record
Greece – Employer of Record
Mexico – Employer of Record
4 Reasons to Outsource Your Payroll
Five Recruitment Trends 2023
Malaysia – Employer of Record
Skill-Based Hiring and Benefits
Malta – Employer of Record
How To Practice Inclusive Recruitment
Israel – Employer of Record
Macedonia – Employer of Record
Jordan – Employer of Record
Macau – Employer of Record
Peru – Employer of Record
The Importance of Employer Branding
Bahrain – Employer of Record
South Korea – Employer of Record
Recruiting during a recession
Philippines – Employer of Record
USA – Employer of Record
Japan – Employer of Record
How To Setup A Business in 2023
Norway – Employer of Record
Managing Overseas Projects In 2023
Reason Of Expanding Your Workforce Globally
Croatia – Employer of Record
Colombia – Employer of Record
5 Ways To Speed Up Your Hiring Process
Egypt – Employer of Record
3 Ways To Streamline An Interview Process
Russia – Employer of Record
Saudi Arabia – Employer of Record
Hong Kong – Employer of Record
An Effective Hybrid Work Model
Turkey – Employer of Record
UAE – Employer of Record
Pakistan – Employer of Record
7 Things to Consider Before Accepting a Job
Kazakhstan – Employer of Record
3 Reasons to Encourage Employees to Generate Employer Brand Content
Denmark – Employer of Record
Sweden – Employer of Record
Bangladesh – Employer of Record
Kuwait – Employer of Record
How To Hire In The Age Of Hybrid Working
Australia – Employer of Record
Oman – Employer of Record
Qatar – Employer of Record
Ukraine – Employer of Record
Diversity – A Vital Hiring Strategy
Owning Every Moment of Your Hiring Experience
Serbia – Employer of Record
Maldives – Employer of Record
India – Employer of Record
Argentina – Employer of Record
Uzbekistan – Employer of Record
Belarus – Employer of Record
Brazil – Employer of Record
Chile – Employer of Record
Armenia – Employer of Record
3 Steps To Company Formation In The UK & Abroad
Romania – Employer of Record
Canada – Employer of Record
Morocco – Employer of Record