Hire employees in Germany
With Nomad Global Hire EOR services, you can easily hire employees in Germany, without having to set up your own entity. No risk and fully compliant with HR support included
What to know about Germany
Germany is home to a very large community of Remote Workers
Employee Tax
Incremental up to 45%
Payroll Frequency
Monthly over 12 payments
Capital
Berlin
Population
Circa 83.2 Millions
Available Contracts
Fixed Term Contract, Indefinite/Permanent
Germany is bursting with trained skilled workers, innovation and investment. Crunchbase identifies Germany as a hot spot for Startups, with many success stories such as German Unicorns Wefox, Personio, Celonis or N26 for example.
As an employer of Record, NOMAD will manage the local employment for your new employees, including Employment contracts, registration with authorities, Payroll, Tax, Compliance and will give you real HR support.
Payroll, Benefits & Tax in Germany
- The average salary in Germany in 2021 was 48,000 Euros per Year
- Employer Tax in Germany is estimated at 22.33%
- This includes Pension, Accident, Health insurance, Unemployment, Maternity insurance and Illness.
- Employee Tax in Germany is incremental from 14% up to 45%:
- The rate is dependent on personal situations
- Overtime payment in Germany is not mandatory but based on the employer’s decision to award a financial or time based reward to compensate. Maximum however is 2 hours a day or 12 hours a week.
- Payroll Frequency in Germany is Monthly over 12 months
- Termination in Germany can only be done for a valid cause, see below
- Notice period in Germany is depending on the length of service of the employee in the business
- Maternity Leave in Germany is up to 14 paid weeks during which salary is advanced by the employer to the employee, but paid back by the Social Security to the employer. The Mother has to take 6 weeks before the birth date and 8 other weeks right after the birth of the child.
- There is no Paternity Leave in Germany although new Fathers can use Parental leave.
- Parental Leave is up to 3 years per child in Germany. Salary will not be paid but an indemnity of maximum 1,800 Euros per month.
- Sick Leave is covered and employees will get 100% of their salary during the leave. For the first 6 weeks, the employer will pay 100% of the salary, then it will be covered by Social Security / Health Insurance.
- Statutory Leave is 20 days minimum per year.
- Bank holidays: there are 9 national days in 2023 in Germany.
The German Labour Code is setting the framework for employment in Germany. This covers all individual and collective working relationships, Compensation and Benefits, Workers rights as well as Leave (Sick, Parental), employment Termination and Discrimination.
Onboarding and Termination in Germany
- Probation period are not mandatory under German Labor Law.
- Probation period in Germany however can be of a maximum of 6 months.
- You can hire through Fixed Term Contracts, Indefinite / Permanent contract or BtoB contracts.
- Employment Contracts can be drafted in German or in English or both.
- Termination is Germany is generally a complicated process and requires particular care. In order to be compliant, Termination can occur as such:
- By mutual agreement,
- By resignation of the employee,
- By expiration of contract,
- By the employer on grounds of disciplinary dismissal, failure to perform in probation period, reduction of work or end of the activity or long illness of the employee.
- It is always advised to reach a Mutual Agreement to validate a Termination in Germany
- The minimum notice period in Germany is
- 4 weeks (for service of less than 2 years)
- 1 month from the end of the month for service of 2 to 4 years,
- 2 months from the end of the month for service of 5 to 7 years…
- Severance payments in Germany are not mandatory, however in practice employers pay severance to all employees leaving the company by dismissal or mutual agreement after 6 months.
Fixed Management Fee
We charge a fixed monthly fee depending on the level of the salary of the hired employee
- Local Contract Management
- Payroll Management
- Tax and Compliance
- HR Support
Employee Nomad set up fee
Everything to get you started on Nomad and ensure piece of mind for you and your new hire
- Sign up to the NOMAD Services
- Benefits Setup (if available)
- Tax authority liaisons
- An additional Deposit of 1 full month salary cost will be required
Estimated Employer tax costs
Employer Tax in Germany is estimated at 22.33%
- Pension insurance
- Health Insurance
- Accident
- Maternity, Unemployment, Illness
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