Hire in Germany

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

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.

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

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.

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

• 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