PEO/Employer Of record in Germany

Hire staff in Germany while we manage all employment and HR operations. No local company needed! 

PEO/Employer of Record in Germany - Hire Employees Compliantly

We are a Professional Employer Organization (PEO) that provides Employer of Record services in Germany, also known as “employment solutions” or “PEO solutions”.

Many companies opt to outsource their employment to minimize costs and legal risk when expanding their business operations in Germany.

We can help foreign companies navigate through German employment laws and requirements, saving you time so you can focus on core business activities.

While all employment, HR, administrative and legal matters are outsourced to us, you are able to have a physical presence in Germany without the need to set-up a legal entity.

Entity Not Required

Foreign clients do not need to register a legal entity in Germany when using PEO services.

100% compliant

We strictly follow official compliance guidelines to ensure a safe legal environment for all clients.

Fast Market Entry

We will help you to hire and onboard employees within one week.

Complete PEO package for efficient and compliant employment

On-board staff in Germany without any risks

Employment and Payroll Regulations in Germany

Table of Contents

Contract For Hiring Employees In Germany

A written contract has to be used to make employment official.

Immigration Requirements

Individuals who are not EEA/EU citizens or Switzerland citizens will need a working permit to be employed in Germany. Additionally, a German company will have to sponsor the employee. It is initially provided for a year of employment and can be extended.

HR & Labor

Working hours: Employees should work 48 hours a week to be considered full-time employees, with employees working 8 hours a day and including Saturday as a workday.

If the company only works 5 days a week, employees should only work 40 hours in total. Employers are required to compensate for overtime with time off. Although not legally required, an overtime bonus may be paid to employees and specific conditions should be included in the labor agreement or individual contract.

Minimum working age: Individuals as young as 15 can be employed, but employers will have to refer to the Youth Labor Protection Laws that protect the employee until they turn 18. Employees are guaranteed breaks throughout the day and a lunch break, although the specific amount depends on total hours worked.

Probationary Period In Germany

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.

Annual Leaves

When hiring employees in Germany, employment law sustains that employees with a five-day working week are entitled to 20 working days of holiday.

Social Security In Germany

When hiring employees in Germany, employment law sustains that, participation in social security contributions is mandatory. The employer is liable for the total payment and is responsible for withholding the contributions from the employee’s salary. Contributions must be made on a monthly basis.

The below rates shall be applied against gross salary given the below ceilings:

Contribution Rates In Germany

Employee

Germany Pension Insurance: 9.8% of employee’s monthly gross salary.

Unemployment  Insurance: 1.50 % of employee’s monthly gross salary.

Health Insurance: 8.2 % of employee’s monthly gross salary.

Long-Term Insurance: 0.975 % of employee’s monthly gross salary.*

Total cost: 20.475%

Employer

Germany Pension Insurance: 9.8% of employee’s monthly gross salary.

Unemployment  Insurance: 1.50 % of employee’s monthly gross salary.

Health Insurance: 7.3 % of employee’s monthly gross salary.

Long-Term Insurance: 0.975 % of employee’s monthly gross salary.*

Total cost: 19.575%

Individual Income Tax

All persons subject to German income tax must file an income tax return annually with the appropriate local tax office (depending on the place of residence). Geometrically progressive rates start at 14% and rise to 42%. 

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