Europe · EUR

Hire in Germany

Federal Republic of Germany — 84 million population, $51,380 GDP per capita. Everything you need to know about employment law, tax, compliance and hiring in Germany.

Capital

Berlin

Currency

Euro (EUR)

Languages

German

Time zones

UTC+1 (CET) / UTC+2 (CEST)

Hiring overview

Typical time to hire
2-4 weeks for contractor, 4-8 weeks for full-time
Entity requirement
German GmbH or UG (haftungsbeschrankt) for direct employment. Registration at local Gewerbeamt and Finanzamt.
EOR available
Yes — from $399/employee/month through a Corpshore entity
Contractor of record
Yes — from $39/worker/month

Employment law

Standard workweek
35-40 hours (depends on sector and collective agreement; 40 hours typical)
Maximum weekly hours
48 hours
Minimum annual leave
20 days (5-day week) / 24 days (6-day week). Collective agreements typically offer 25-30 days.
Public holidays
9 per year
Maternity leave
14 weeks (6 before + 8 after birth), fully paid at average net salary. Plus up to 3 years Elternzeit (parental leave).
Paternity leave
No specific statutory paternity leave; fathers share the Elternzeit entitlement. Elterngeld pays 65-67% of net income for up to 14 months (shared).
Notice period
4 weeks during first 2 years. Increases with tenure: up to 7 months after 20 years. Collective agreements may differ.
Severance
No statutory entitlement, but standard practice in terminations: 0.5 months per year of service (Regelabfindung). Works councils negotiate terms.
Probation
Up to 6 months, with 2-week notice period during probation
Overtime rules
Arbeitszeitgesetz limits to 8 hours/day (extendable to 10 if averaged down within 6 months). No statutory overtime premium; depends on contract or collective agreement.

Tax overview

Income tax range
14% to 45% (plus 5.5% solidarity surcharge on high incomes)
Corporate tax
15% + 5.5% solidarity surcharge + ~14% trade tax (Gewerbesteuer) = ~30% effective
Social contributions
Split roughly 50/50: ~20% each. Pension 18.6%, health ~14.6%, unemployment 2.6%, long-term care 3.4%.
VAT / GST
19% (standard); 7% reduced (food, books, public transport)
Tax year
Calendar year (Jan-Dec)
Treaty network
Over 90 tax treaties

Compliance landscape

Worker classification
Scheinselbstandigkeit (bogus self-employment) is heavily policed. Key factors: personal dependence, integration into the client's organisation, fixed working hours. Deutsche Rentenversicherung can reclassify retroactively.
Data protection
GDPR (directly applicable) + Bundesdatenschutzgesetz (BDSG). Federal and state data protection authorities enforce. Employee data protection has sector-specific rules (BDSG Section 26).
Right to work
EU/EEA nationals have free movement. Non-EU: work visa and residence permit required. Blue Card available for qualified professionals. Fachkrafteeinwanderungsgesetz (2020) eased skilled worker immigration.
Non-compete
Enforceable if: (a) duration max 2 years, (b) employer pays at least 50% of last compensation as Karenzentschadigung (garden pay), (c) protects a legitimate interest.
Collective bargaining
Powerful system. Tarifvertrag (collective agreements) cover ~50% of workers in the west, ~35% in the east. Works councils (Betriebsrat) mandatory in companies with 5+ employees if employees request one.

Payment rails

Bank transfer (SEPA)
Stripe Connect
Wise

SEPA Credit Transfer is the standard payroll method across the eurozone. Instant SEPA available at most German banks. Stripe Connect supports EUR payouts natively.

Key considerations for hiring

  • Works council (Betriebsrat) has co-determination rights on hiring, termination, and working conditions
  • Fixed-term contracts without objective reason limited to 2 years (can be extended 3 times within that period)
  • Germany faces a significant skilled worker shortage (Fachkraftemangel), especially in engineering, IT, and healthcare
  • Kurzarbeit (short-time work scheme) demonstrated during COVID-19 how the social partnership model protects employment

Business and cultural context: Germany

Business culture

Direct, structured, and thorough. Meetings have agendas that are followed. Decisions are well-documented. Titles (Herr Doktor, Frau Professor) still matter in traditional industries. Mittelstand (family-owned mid-size companies) form the industrial backbone.

Key industries

Automotive
Mechanical engineering
Chemical and pharmaceutical
Technology
Financial services
Renewable energy

Talent pool strengths

Mechanical engineering
Automotive engineering
Enterprise software
Chemical engineering
Manufacturing automation

Historical context

Germany's codetermination model (Mitbestimmung), enshrined in the 1976 Codetermination Act, gives workers representation on supervisory boards of companies with 500+ employees. This social partnership approach, rooted in post-war reconstruction, is one reason Germany has among the lowest strike rates in Europe.

Ready to hire in Germany?

Use our EOR service from $399/month and we handle employment law, payroll, tax and compliance in Germany for you.

Hire in Germany — employment law, tax, compliance | Corpshore Work