Hire in Germany
Germany PEO &
Employer of Record
Hire & manage teams remotely in Germany without a local entity. We handle HR compliance, payroll & taxes so you can focus on your business.
Business Language
Deutsh
Salary Currency
Euro (EUR)
Payroll tax
20.65%
Payroll Cycle
Monthly
Time zone
UTC +2
Capital city
Berlin
Hire Employees in Germany
NNRoad provides employer of record (EOR) & professional employment organization (PEO) services to ensure that your business in Germany complies with local labor laws and regulations. We process monthly payroll and act as the Employer of Record, taking on all local employer liabilities.
The NNRoad Advantage ☺
Pay as you go
No set-up or overhead costs to global expansion.
Global account manager
One point of contact for all of our 50+ serviced countries and regions.
Compliance
Ensured compliant contracts and operations.
Fast Onboarding
Start working with your remote employees/contractors within a week.
Foreigner Visas
NNRoad assists with overseas foreign hires visa needs.
Platform
Access your payroll reports and employee pay stubs on our portal.
Employer of Record in Germany
Employer of Record (EOR) services are for companies who do not have a legal entity in Germany, but who want to hire localy. Employment and full liability are outsourced to NNRoad.
01.
Candidate Selection
You interviews & select the candidates you want to hire in Germany.
02.
Employee Onboarding
We sign a local labor contract with your employees based in Germany.
03.
Compliance & Payroll
We manage monthly payroll, mandatory benefits & all HR compliance in Germany.
04.
Payroll Reporting
See all payroll reports on our platform & focus on your business in Germany.
Recruiting process outsourcing – including but not limited to resume screening, shortlisting candidates, coordination for interviews, and assistance for salary negotiation.
Hiring and termination of employees/local labor contracts (contract administration – engagement, extension termination and conversion to permanent hire).
On-boarding and off-boarding employees following labor law practice.
Complete payroll solution and benefit administration
Employee management – employee record retaining, time keeping, bonus and allowance management, expense and claims, and leave employee database management accordingly to the local law.
Mandatory insurance compliance (i.e. pension, labor and health insurance) according to the local labor laws.
Payment management (Invoicing customers/clients and vendor payments).
Work VISA application assistance, if needed.
Local individual income tax reporting.
Payroll & PEO in Germany
Professional Employment Organization (PEO) services are for companies who have a legal entity in Germany, and want to outsource their payroll. Employment liabilities are shared between your organization and NNRoad.
01.
Compliance & Payroll
We manage monthly payroll, mandatory benefits & all HR compliance in Germany.
02.
Payroll Reporting
See all payroll reports on our platform & focus on your business in Germany.
Registering the necessary company and personnel information for payroll calculation in the payroll software and system
Monthly Payroll Processing
Year-End Adjustment and Annual Declaration
Taxes & Payroll in Germany
Employee Income Taxes:
Individual income tax rates in Germany are based on progressive tax brackets.
All resident individuals are taxed on their worldwide income. Non-resident individuals are taxed (usually by withholding) on German source income only. Germany has double taxation agreements with many countries, which means that taxpayers can claim a credit for taxes paid in another country.
There are a number of deductions and exemptions that can be claimed to reduce the amount of income tax payable. These include deductions for pension contributions, charitable donations and expenses incurred in the course of employment. There are also a number of exemption thresholds, which mean that taxpayers with low incomes do not have to pay any income tax at all.
The rate of income tax depends on the taxpayer’s marginal tax rate. This is the highest rate of tax that the taxpayer will pay on their income. The marginal tax rate is composed of the income tax rate and the solidarity surcharge. The income tax rate ranges from 0% to 45%, while the solidarity surcharge is a flat rate of 5.5%. This means that the highest marginal tax rate in Germany is 50.5%.
Germany also has a corporate income tax, which is levied on the profits of companies. The standard rate of corporate income tax is 15%, but there are a number of deductions and exemptions that can be claimed to reduce this amount.
Tax Brackets
Tax Brackets For Single Taxpayer (EUR)
0%: 0 – 9,744
14% to 42%: 9,744 – 57,918 (geometrically progressive rates start from 14% and increase to 42%)
42%: 57,918 – 274,612
45%: Over 274,612
Tax Brackets For Married Taxpayer (EUR)
0%: 0 – 19,488
14% to 42%: 19,488 – 115,836 (geometrically progressive rates start from 14% and increase to 42%)
42%: 115,836 – 549,224
45%: Over 549,224
0%: 0 – 9,744
14% to 42%: 9,744 – 57,918 (geometrically progressive rates start from 14% and increase to 42%)
42%: 57,918 – 274,612
45%: Over 274,612
Tax Brackets For Married Taxpayer (EUR)
0%: 0 – 19,488
14% to 42%: 19,488 – 115,836 (geometrically progressive rates start from 14% and increase to 42%)
42%: 115,836 – 549,224
45%: Over 549,224
Sample Calculation
N/A
Employer Costs in Germany
Employer Contribution:
7.3% – Health insurance
9.3% – Pension insurance
1.25% – Unemployment insurance
1.525% – Long term care insurance (effective once the employee reaches 23 years of age and is increased to 1.775% for employees with no children)
0.12% – Insolvency charge
Employee Contribution:
7.3% – Health insurance
9.3% – Pension insurance
1.25% – Unemployment insurance
1.525% – Care insurance (effective once the employee reaches 23 years of age and is increased to 1.775% for employees with no children)
Benefits & Insurance in Germany
Pension Fund
Anyone working in Germany is required to contribute to a pension plan. Your contributions accumulate over time to provide you with a basic retirement income. You have the option of joining the statutory pension insurance scheme or starting a private pension plan if you are self-employed (i.e. you operate a business or work as a freelancer).
Healthcare Insurance
Statutory Health Insurance (Gesetzliche Krankenversicherung – GKV)
Almost everyone is compelled to contribute into a government-run health insurance plan (currently around 90 percent of the population is covered by a GKV scheme). If you are self-employed or earn more than 64.350 euros per year, you have the option of purchasing private health insurance or contributing to GKV voluntarily.
Long-Term Care Insurance (Pflegeversicherung)
Everyone in Germany has been required to contribute to long-term care insurance since 1995, which covers you if you require care due to old age, an accident, or disease. If you have statutory health insurance, you are automatically protected; if you have private health insurance, you may need to apply for long-term care insurance separately.
Working Hours in Germany
Working Hours Per Week
The usual German workweek is 8 hours per day or 48 hours per week, Monday to Friday. Working hours might be temporarily increased to up to 10 hours per workday in Germany. Employees are entitled to a minimum of 24 hours’ rest per week.
Overtime
Except for labor on Sundays and public holidays, there are no special overtime restrictions in Germany. Except in specified instances, such as for emergency services, these situations are normally prohibited. Overtime is typically not compensated through regular remuneration for regular employees. However, it is possible to agree to incorporate an additional 10%-20% overtime in your job contract.
Termination Laws in Germany
Employees’ rights are protected in Germany by defining termination conditions, notice periods, and when they are protected from termination. Termination by agreement is the easiest one. Employee and employer both agree on the termination of the contract. This must be in writing and signed by both parties. For operational reasons, misconduct, or employee personal reasons, termination with cause is permitted. If there is a valid reason, notice is required, which varies depending on the length of service.
Severance:
There is no statutory severance pay in Germany.
An individual employee on a permanent contract is entitled to severance pay under the Employment Protection Act if the employer indicates in the notice of dismissal that the dismissal is for operational reasons and offers compensation, or if the worker does not file a complaint within three weeks of the dismissal.
In this situation, severance compensation of half a month’s wage might be filed for each year of work. The maximum payment allowed by law is equal to one year’s salary. Employees aged 50 and older with at least 15 years of continuous service are entitled to 15 months’ pay, while employees aged 55 and older with at least 20 years of continuous service are entitled to 18 months’ pay.
Notice Period:
If you have fewer than two years of service, you must provide notice by the 15th of the month or the end of the calendar month, which is always at least two weeks.
After two years of service, the notice period is one month, which is effective until the end of the calendar month. For up to 20 years of service, there is a sliding scale that requires 7 months’ notice.
There is no requirement for notice when someone is fired for serious wrongdoing.
Employment Contract in Germany
Employment Contract
Employment contracts are not subject to any legal restrictions in law, which means they can even be concluded orally. However, it is encouraged, and almost always the rule, that they are concluded in a written form.
Despite the fact that there is no necessary legal regulation dictating which parts must be included in the employment contract, it is prudent to include the following vital aspects for legal clarity:
Probation Period
The probationary period usually lasts the first three months of employment. The maximum probationary period is six months. During this time, the employment relationship can be terminated by either party with two weeks’ notice. An employee is not entitled to severance pay during a probationary period.
Types of Leaves in Germany
Annual Leave
In Germany, the Federal Holiday Act (Bundesurlaubsgesetz) provides for 20 vacation days per year for a 5-day work week and 24 vacation days for a 6-day work week; nevertheless, most firms in Germany give full-time employees upwards of 26 to 30 vacation days each year. Sick leave does not affect vacation time.
Sick Leave
Employees in Germany are entitled to up to 6 weeks of sick leave per illness under German legislation (statutory sick pay). If employees are suffering from a variety of illnesses, there is no maximum limit. With a few exceptions, sick leave is usually paid for by the employer.
Maternity Leave
Mothers in Germany are entitled to fourteen weeks of maternity (6 weeks before the child is born and 8 weeks after). In Germany, maternity leave is paid in full; however, the government only pays a portion of it (EUR 13 per day) and the remainder is covered by the employer. Maternity leave is the same as it is for childbirth in the case of a surrogacy agreement.
Paternity Leave
In Germany, parents can take up to 24 months of paid parental leave per child. A single parent can take up to 24 months while two parents can take up to 28 months. Parental leave is available at any time until the child turns three years old. If a request for parental leave is made with seven weeks’ notice, employers cannot refuse it. During parental leave, parents can opt to work part-time (up to 30 hours per week).
Public Holidays in Germany
Public Holidays
Germany has a total of 12 public holidays. Public holidays in Germany are called gesetzliche Feiertage and there are 12 of them. 9 of these are so-called “restoration days”, commemorating the struggle for democracy and national unity, as well as celebrating the country’s cultural heritage.The remaining 3 holidays celebrate Easter, Pentecost and Christmas.
Germans are entitled to paid leave on all public holidays. This leave is in addition to the annual vacation entitlement of at least 24 days.
If a public holiday falls on a weekend, then the next working day becomes a holiday. For example, if Christmas Eve or New Year’s Eve falls on a Saturday or Sunday, the following Monday is a holiday. The same applies if Easter Monday or Pentecost Monday falls on a Saturday or Sunday. If Christmas Day, New Year’s Day or Boxing Day (December 26th) falls on a Saturday or Sunday, the following Monday is not a holiday.
In Germany there are both national and regional public holidays. Below we show you the list of national holidays.
Resources
Complete Guide: Payroll in Germany 2023
October 27, 2022
How To Hire Employees In Germany: A Complete Guide
November 27, 2018