* Playroll continues to analyse immediate opportunities and fulfilled roles by recruitment partners, contractors and employers to identify in-demand jobs.

Capital City

Euro (€)


CET (GMT +1)

Employment Cost


Annual Leave

20 days

In-demand Specialties*
Engineering, It, Healthcare

The Ultimate Guide to Hiring Employees in Germany

Simplify hiring employees in by partnering with Playroll. Our Employer of Record (EOR) handles hiring, onboarding, payroll, taxes, immigration, benefits administration, and compliance. While you maintain control of day-to-day tasks and responsibilities.


Key Considerations Before Hiring In Germany

Employing in Germany requires employers to own a legal entity in the country and manage payroll, tax, benefits and compliance through their own in-country resources. Grow your team in Germany with our Employer of Record solution, ensuring streamlined, compliant business expansion with no entity.

Playroll allows you to hire employee's in Germany quickly, easily and we even automate tax document collection, benefits, payroll and more.

Good To Know

Germany's workforce is in high demand, given the country's vast pool of highly educated and skilled workers. It consistently ranks among the countries with the highest percentage of individuals holding university degrees globally.

Establishing a business presence in Germany involves intricate processes like setting up a local entity, dealing with tax complexities, and navigating a lengthy property registration, all demanding significant time and effort.

When recruiting in Germany, it's crucial to distinguish between contractors and full-time employees, as misclassification may result in fines due to differing regulations for each category.

In German business culture, interpersonal connections hold a secondary significance as there is a distinct separation between work and personal life. Business connections are established on mutual benefit, with the primary focus on achieving shared tasks and objectives.


Fundamental Aspects of Employment in Germany

Employers in Germany are required to provide employees with a written statement outlining the employment terms within the initial month of commencing work. Key elements necessary for an employment contract are:

  • Full names and addresses of both employer and employee
  • Employment start date
  • Regular work location
  • Concise job description
  • Details regarding salary and additional remuneration components
  • Agreed-upon working hours

Probationary Period in Germany

In Germany, probation or trial periods, typically lasting up to six months, are commonly established within collective agreements, although not mandated by law.

Working hours in Germany

In Germany, the regular workweek consists of 40 hours, spread across 8 hours per day. However, if the average daily working time does not exceed eight hours within six months or 24 weeks, the workweek can extend to 48 hours or 10 hours per day.

Overtime in Germany

Overtime work in Germany must adhere to the maximum working hours outlined in the employee's contract or collective agreement. There are two main types of overtime in Germany which include:

  • "Mehrarbeit," exceeding the 48-hour weekly limit, extendable to 10 hours daily if the average daily work hours remain at 8 over six months
  • "Überstunden," representing extra hours beyond agreed contractual terms, usually requiring compensation.

Navigating Key Aspects of Payroll in Germany

Germany has a robust and complex payroll and tax system, and as an employer, it pays to understand payroll process basics.

1 January - 31 December

Fiscal Year in Germany

1 January - 31 December is the 12-month accounting period that businesses in Germany use for financial and tax reporting purposes.

Payroll Cycle in Germany

The payroll cycle in Germany is usually Monthly, with employees being paid by the 25th of the month.
12 EUR p/h

Minimum Wage in Germany

The minimum wage for employees in Germany is typically 12 EUR per hour, amounting to ~1,920 EUR per month for a typical 40 hour work week.

Minimum wages and salaries in Germany

The minimum wage in Germany is 12 EUR an hour.

Bonus Payments in Germany

In Germany, it's a common practice to receive a 13th-month salary paid out during the December payroll.

Comprehensive Overview of Employment Taxes in Germany

Understanding the tax obligations for both employers and employees is crucial when operating in Germany's business landscape. This section explains how taxes and statutory fees affect payroll and individual earnings in Germany.

Employer Tax Contributions

Employer payroll contributions are generally estimated at an additional 20.80% on top of the employee salary in Germany.

Tax Rate Tax Type

Employee Payroll Tax Contributions

In Germany, the typical estimation for employee payroll contributions cost is around 21.225% – 31.825%.

Tax Rate Tax Type

Individual Payroll Tax Contributions

Individual Income Tax in Germany varies from 14% to 45%, calculated based on progressive rates. The applicable rate is determined by factors such as the employee's tax class (marital status, multiple income sources, etc.)

Tax Rate Income Bracket

Pension in Germany

Germany's statutory old-age insurance is designed to support employees in maintaining a suitable standard of living during retirement. Payments usually begin at age 67, with a maximum payout currently set at 67% of the average net income earned throughout the insured employee’s working life.

The tax-related information provided in this guide is intended for general guidance and informational purposes only. Reach out to our dedicated team for insights on remote hiring in Germany tailored to your needs.

Easily navigate payroll, taxes and contributions with Playroll.

Grow your distributed workforce today!

Understanding the Protocols for Termination of Employment in Germany

When it comes to terminating employment in Germany, understanding the legal obligations regarding severance pay and contributions is essential. Below is a detailed overview of the key considerations for both employers and employees.

Termination Process

Terminations in Germany are complex. Beyond the probation period, employers must justify terminations, and the process varies based on agreements, contract type, and reasons, with employees protected by the German Termination Protection Act after six months. An employee may be terminated compliantly for one of the following reasons:

  • Voluntarily by the employee
  • By mutual agreement
  • Conduct-related dismissal: breach of employment terms
  • By the expiration of the contract

Notice Period

Employees in Germany are entitled to a minimum statutory notice period of four weeks before the 15th or the last day of the following month, contingent upon the duration of their tenure with the company:

  • Up to 2 years: 4 weeks (per the 15th or last day of the month)
  • 2 - 4 years: 1 month
  • 5 - 7 years: 2 months
  • 8 - 9 years: 3 months
  • 10 - 11 years: 4 months
  • 12 - 14 years: 5 months

Severance Pay

In Germany, severance pay is provided when an employer terminates an employment agreement without notice. It is often customary, though not legally required, to offer severance after an employee has been with the company for 6 months to mitigate litigation risk.

Annual Leave Entitlements and Company Policies in Germany

The annual leave entitlement in Germany is 20 days for a full time worker. These can include public holidays on top of that or within those days, which would otherwise be unpaid.

Public Holidays in Germany

Germany observes 13 public holidays, not included in the minimum paid leave entitlement, but employers typically grant these holidays as days off for their employees. The 13 national holidays in Germany include:

Holiday Date

Paid Time Off in Germany

Maternity Leave in Germany

Paternity Leave in Germany

Sick Leave in Germany

Parental Leave In Germany

Germany's Benefits Built Into Playroll

Competitive benefits package in Germany

Playroll is committed to providing tailored, competitive benefits packages that are designed not only to attract but also retain top talent worldwide. Our global team of benefits experts build custom local packages to ensure your employees in Germany's needs are met. Typically our packages contain some or all of the following benefits.

Health Insurance
Pension or 401k
Life and Disability Insurance
Vision Insurance
Dental Insurance
Discounts & Perks

Playroll Supplementary Benefits For Employment In Germany

Make your benefits package in Germany a talent magnet with Playroll's local plans. We offer benefits that are compliant, comprehensive, and flexible — all at competitive rates. Speak with our local territory experts to explore the localized benefits we can offer you, while you scale your team.

  • Health Insurance
  • Short-Term Sickness Insurance
  • Workman's Compensation
  • Background Checks
  • IT Equipment Sourcing

Statutory benefits for employment in Germany

Playroll allows you to provide localized benefits for employees in Germany within minutes. All in one manageable online dashboard. If you'd like specific information about our benefits packages in Germany create an account or contact our global expansion team, today.

Playroll Benefit Services

Playroll's Expertise in Facilitating Work Visas for Germany

At Playroll we're all about empowering employees to work anywhere, making mobility possible for global teams. We sponsor visas and hire the employee for you, so you don’t have to worry about payroll, taxes, and more.

It's important to note, visa support can be complicated. There are many variables that affect whether sponsorship is possible, including one’s nationality, education, marital status, and the immigration policy for the country in question.

Unfortunately, this means we can’t support visas everywhere - with that being said, we handle the entire visa process in-house, and dig into your situation to give you an overview of what to expect if we're able to help with visa sponsorship in Germany.

Playroll Immigration Support

Integrated EOR Platform

Legal and compliance experts are readily available to provide guidance and case-by-case Q&A support.

Accelerated Immigration Timeline

By leveraging dedicated support from in-house legal and compliance experts for case by case questions and more.

Hire in 50+ Countries

Accelerated Immigration Timeline

Acquiring a visa without an entity has never been easier, leverage Playroll's global coverage to sponsor and hire employees.

Playroll Visa Services

Hiring International Employees is Complex.

Playroll makes it easy!