Find the best candidates for your team

Hire full-time talent in 180+ countries

Easily manage and pay your contractors

Local benefits & insurances

Relocation and visa made easy

With no hidden fees

How we manage your data

Local HR Knowledge

Our borderless team and our global purpose

How businesses accelarate hiring with Horizons

Become a partner and benefit from unique offerings

Discover our international offices

Join our mission to shaping the New World of Work

Start hiring
hire in Germany

Germany PEO &
Employer of Record

SALARY PAYMENT IN Euro (EUR, €)

CONTRACT LANGUAGES German / English

PAYROLL TAX 20.66%

PAYROLL CYCLE Monthly

TIME TO HIRE 48 hours

Hire and pay talents
with Horizons in
180+ countries

Simple, compliant hiring with Horizons PEO

PEO in Germany

Horizons provides compliance solutions to ensure your business in Germany operates in line with German labor laws and tax regulations. Businesses benefit from hiring in, investing in, or job outsourcing to, Germany in a range of industries, from customer service, to accounting services, to software development.

We also process monthly payroll, and, as a German Employer of Record, absorb all local employer liabilities. Partnering with our German PEO is the quickest and most cost-effective way to enter the German market or hire remote team members.

Map of Germany

Facts & Stats

PEO Platform Hire in Germany, and pay employees through our platform or app. PEO Cost Our Germany PEO solution is the most affordable on the market. Time-to-hire Fast onboarding in Germany hire in as little as 12 hours.
Contracts We draft labor contracts compliant with German law. Local Benefits We administer all mandatory and customary benefits in Germany. 180+ Countries It doesn’t stop with Germany — we are global.

Our Presence in Germany

Our Germany PEO solution enables you to hire and expand across Germany.

From our Berlin office, we recruit and hire across Germany, from Bavaria to Hamburg, ensuring full compliance with state and federal laws.

As our European headquarters, employees of our Berlin office will help coordinate your greater-Europe expansion.

Meet Horizons' Berlin team 🥳

Employment Laws

AÜG Labor Leasing Licence in Germany

At Horizons Germany, we operate under a labour-leasing license (Arbeitnehmerüberlassung – AÜG), which is seen as a temporary employment solution by the German leasing labor authorities. This license allows us to deploy employees to the same end-client for a maximum of 18 continuous months.

There are specific guidelines to keep in mind:

  1. Once the 18 month deployment limit has been reached, there are a number of options to continue the deployment to the end-client: The preferred solution is that, in the meantime, the end-client has set up their own entity, e.g. GmbH, in Germany and can hire the employee directly under their entity (Horizons can assist with this set-up process).
  2. The employee signs a termination agreement ceasing their employment with Horizons and takes a mandatory “cool-off” period of 3 months plus 1 day before being re-hired by Horizons and re-deployed to the end-client. Simply switching Employer of Record, e.g. Horizons to another Germany PEO provider, is not a legal option. The deployment to the end-client can only have a maximum duration of 18 continuous months, regardless of who the Employer of Record is.

With Horizons as your Employer of Record in Germany, we can assist you with finding the best solution for you while staying 100% compliant with the german labour law and avoid fines. 

Consult with a Horizons hiring specialist to explore these opportunities and find the right path for your international employment needs.

Picture of Expert Insights from
Expert Insights from

Tom Kussmann, COO (Berlin Office)

Operating in full compliance is our top priority at Horizons. While the labor leasing framework in Germany is challenging to navigate, our team based out in Berlin has a vast experience in securing your next hire in Germany.

Types of Employment Agreements in Germany

Fixed-term
Probationary period1/6 of contract duration (max.)
Termination notice period

2 weeks – 7 months, depending on seniority 

1 month is most common

Severance

Business-related dismissal: 0.5 months’ – 1 months’ salary per year of service, depending on employee situation

Unfair dismissal: possible reemployment + back pay for time of unemployment

Collective dismissal: Case-by-case severance amount

Indefinite
Probationary period6 months (max.)
Termination notice period

2 weeks – 7 months, depending on seniority 

30 days is most common

Severance

Business-related dismissal: 0.5 months’ – 1 months’ salary per year of service, depending on employee situation

Unfair dismissal: possible reemployment + back pay for time of unemployment

Collective dismissal: Case-by-case severance amount

Germany employment contracts

Employers in Germany are required by law to prepare formal contracts of employment for employees. These contracts should include the various terms of employment, such as salary in the local Euro currency), termination rules, and any benefits.

When we hire employees and become their official Germany Employer of Record, we can offer the employees a temporary (fixed-term) or a permanent employment contract.

In order to avoid having to terminate an employee’s employment contract, which is not an easy thing to do once the employee is no longer in the probation period, it can be helpful to give the employee a temporary contract with a duration of 18 months. Although this best-case scenario helps avoid any complications at a later date, many employees are hesitant to sign a temporary contract.

For this reason, it is really up to our end-client and the employee to decide how long the contract should last, but all parties need to be informed that if the employment contract is for a period longer than 18 months, or indeed permanent, the deployment to the end-client can only last for a maximum period of 18 months.

Working hours in Germany

Employees in Germany generally work Monday to Friday, and there is a maximum of eight-hours per day, and 48-hours per week. Overtime is legally limited to 12 hours per week.

Hire compliantly in Germany without a local entity.

Quick, compliant hiring in 12 hours—no subsidiary required.

National holidays in Germany

There are nine nationally followed public holidays in Germany, which most employees receive off work:

In addition to these nine days, there are several regional holidays which may or may not be expected in your location, such as Three King’s Day and Corpus Christi.

Several national public holidays are followed throughout Germany. Only Labor Day is mandatory, but almost most employees receive several other days as holidays:

DateHoliday name
1 Jan MondayNew Year’s Day
29 Mar FridayGood Friday
1 Apr MondayEaster Monday
1 May WednesdayMay Day
9 May Thursday Ascension Day
2o May MondayWhit Monday
3 Oct ThursdayDay of German Unity
25 Dec WednesdayChristmas Day
26 Dec ThursdayBoxing Day

Employment benefits in Germany

It’s vital that you know what benefits your employees in Germany are legally entitled to or expected.

Vacation leave in Germany

In Germany, any employee working five-day weeks is allowed 20 days of annual leave, and anyone working six-day weeks is entitled to 24 days. However, the majority of employers offer between 25 and 30 days of annual leave as standard. Also, many employers offer an end-of-year bonus, although this is not required by law.

Social benefits in Germany

Employers and employees in Germany must both pay equally towards a social security system, which covers things like pension, healthcare coverage, unemployment insurance, and so on. Also, accident insurance is required but must be covered exclusively by employers. For an employer, the total contributions to mandatory social benefits will generally be an additional 20% of each employee’s salary.

In addition to these mandatory benefits, many employers offer other perks such as a housing payment, more comprehensive private health insurance, and more.

Sick leave in Germany

In Germany, employees are entitled to a minimum of six weeks of sick leave with full pay if they can provide a doctor’s note. After this period, employees will be paid through their health insurance at a rate of 70% or more.

Notice periods in Germany

The process of terminating employees can be complicated in Germany. A standard dismissal requires the employer to follow the mandatory notice period, which varies based on how long the employee has been with the organization:

*Notice periods effective from the end of the month unless otherwise stated

  • Probationary period (up to six months) = Two weeks
  • After probation but less than two years = Four weeks (effective from the end of or the 15th day of the month)
  • Over two years = One month
  • Over five years = Two months
  • Over eight years = Three months
  • Over ten years = Four months
  • Over 12 years = Five months
  • Over 15 years = Six months
  • Over 20 years = Seven months

It’s not uncommon for these periods to be longer, and should be stipulated in an employment contract. Also, full salary needs to be provided throughout the notice period. Payments in place of providing a notice period are not common in Germany.

Employee severance and terminations in Germany

Picture of Expert Insights from
Expert Insights from

Tom Kussmann, COO (Berlin Office)

In Germany, employees benefit from substantial protections, making the process of termination post-probation quite complex. Our dedicated team, based in Berlin, is experienced in local employment laws and stands ready to guide you.

Navigating employee terminations and handling severance packages can be complicated for companies expanding overseas for the first time as German labor law is well protective its employees.

In practice, termination scenarios differentiate whether the employee has a permanent or temporary employment contract.

Once the employee has passed the 6 month employment mark, they are protected by the termination protection act (Kündigungsschutzgesetz), meaning that they are indeed entitled to a severance payment, should the permanent employment relationship be terminated by the employer.

The calculation for the statutory severance payment = gross monthly salary * 0,5 * years of service.

In order to calculate years of service, you round up or round down to the nearest year.

There is no entitlement to a termination bonus, although the employee may claim they are entitled to commission, if this is included in the Annex of their employment contract. Any bonus/commission is paid at the discretion of the employer.

However, should the employment relationship be ending because the employee has a temporary contract, there is no entitlement to a severance payment or termination bonus when the sole reason for the termination of employment is due to the expiration of the employment contract. The temporary contract is something which the employee agreed to before beginning the employment.

In addition, if the employment contract is being terminated by the employer before the expiration of the employment contract, the employee would be entitled to a severance payment.

On a separate note, any accrued but untaken holidays will need to be paid out upon expiration/termination of the employment contract.

Tax laws in Germany

Income tax in Germany is progressive, and ranges from 0% to 45% based on income level. The corporate tax rate is 15%, but additional charges such as a solidarity surcharge and trade tax make the total level of contribution around 30%.

Horizons’ Germany Employer of Record & PEO can provide assistance to your business as you navigate the complicated ta laws in the country. 

Health insurance in Germany

Germany has a socialized healthcare system, and all residents are entitled to free necessary care. However, employees earning above a certain income (and their employers) must also contribute to a social security fund.

hassle-free Germany compensation & benefits

Compensation & Benefits

Compensation laws in Germany

The German minimum wage is €12 per hour as of 2024. This is likely to increase slightly year on year. Overtime pay must be laid out in an employment contract.

Benefit management in Germany

It can be difficult to understand and set up employee benefits in Germany, and it can require a lot of time, effort, and investment on the part of employers. However, it is crucial that you adhere to compensation and benefits laws as you can be subject to large fines and legal issues if you fail to.

Outsourcing your benefits management process ensures that you fully understand and adhere to the rules, ensuring your compliance and speeding up the process significantly. At Horizons, our Germany PEO has employment experts who will help you to find and arrange your benefits, advise on your strategy, and ensure compliance with the law.

How it works & what to keep in mind

Maternity Leave in Germany

How it works

German labor law is highly protective. As a result, the employer is required to  continue paying the average salary of the last 13 weeks (known as maternity pay).

As an employer, you are obliged to provide continued payment during maternity leave, including any special payments such as Christmas bonuses.

Maternity leave periods

The protection period (‘time-off’) for pregnant women begins 6 weeks before the estimated due date and typically ends 8 weeks after giving birth. For this period, the employee is eligible for maternity payments.

During the protection period before birth, the employe may only continue her work if she explicitly agrees to it. The employee can revoke her consent at any time.

During the 8-week protection period after birth, she cannot be working under any circumstances, even if she wishes to do so.

In the case of multiple births, the protection period after delivery is 12 weeks. In the case of premature births, maternity protection is generally extended to 12 weeks. Additionally, the maternity leave period is further extended by the time missed before birth. Whether a premature birth is present is determined by a medical certificate.

Furthermore, there is a 12-week protection period after birth for mothers who have given birth to a disabled child.

How maternity leave works in Germany including costs, dismissal protection and leave periods
Who's paying?

The employer is required to keep paying out the salary to the employee within paternity leave period of 14 weeks, 

Nevertheless, the salary payment is fully covered by the health insurance provider of the employee and will be automatically reimbursed to the company along with the monthly payroll declaration. Therefore, the company does not have to bear any financial risks when an employee goes off for paternity leave.

Dismissal protection

Pregnant employees are protected from termination to a special extent during the duration of pregnancy and for a period of 4 months after childbirth, including during parental leave. 

Hire in Germany in 12h
without your own local entity.

With Horizons, you get quick service, transparent pricing, and expert support.

FAQs

We confirm that Horizons is fully licensed under the German Federal Ministry of Labor in Kiel:

  • New Horizons Global Partners Germany GmbH
  • Skalitzer Strasse 85/86, 10997 Berlin
  • AÜG License No.: 90101/191021/5539

 

At Horizons, we operate under a labour-leasing license (German = Arbeitnehmerüberlassung (AÜG)), which is seen as a temporary employment solution by the German authorities. When we hire employees and become their Employer of Record, we can offer the employees a temporary or a permanent employment contract. However, due to our AÜG license, we can only deploy the employee to the same end-client for a maximum of 18 continuous months. So, although the employee can essentially have a permanent contract with Horizons, they can only be deployed to the end-client for a maximum period of 18 months.

Important: Note that employing is a federal offence and punishable by German law. As we have seen other EORs in the market setting up multiple entities to find workarounds for the 18-month limit, we can only strongly recommend to stay away.

Once the 18 month deployment limit has been reached, there are a number of options to continue the deployment of the staff via Employer of Record:

(i) The preferred solution is that, in the meantime, an entity has been incorporated in Germany, e.g. GmbH, and can hire the employee directly under their entity (Horizons can assist with this set-up process);

(ii) The employee signs a termination agreement ceasing their employment with Horizons and takes a mandatory “cool-off” period of 3 months plus 1 day before being re-hired by Horizons and re-deployed to the end-client. Please note that simply switching Employer of Record, e.g. Horizons to another EOR provider, is not a legal option. The deployment to the end-client can only have a maximum duration of 18 continuous months, regardless of who the Employer of Record is.

A Germany PEO and a Germany EOR are two types of companies which specialize in providing human resources services to businesses in Germany.

The main difference between a Germany PEO and a Germany EOR is in the scope of their services.

Germany PEOs provide a full range of HR services, including payroll, benefits administration, and employee recruiting—all under one roof as a co-employer. Engaging a Germany PEO is essentially outsourcing your HR duties in Germany.

Germany EORs actually take over as the legal employer of your employees based abroad. Germany EORs become responsible for labor compliance for your employees in Germany.

At Horizons, we offer both PEO and EOR services in Germany. Get in touch now and let us know what service you are seeking.

A PEO in Germany can feasibly hire both local and foreign nationals to work in Germany.

However, the ability of Horizons to sponsor your foreign national employee in Germany may be limited due to visa quotas practiced in many countries.

Contact us with your requirements and our Global Mobility team with review the case and get back to you within 2 business days.

In most cases, Horizons’ Germany PEO can hire & onboard your employee within 24 hours. The actual start date of the employee will depend on their notice period obligation to their previous employer as well as any relevant hiring rules in Germany.

It is possible to get a work visa in Germany. Horizons’ Global Mobility team is a dedicated team of work visa experts. They assess the details of each case to determine feasibility and costs before Horizons applies for the work visa on behalf of your employee. If the Global Mobility team determines that your case is feasible, the process is smooth and transparent. Visa spots in Germany are limited, however—get started today to secure your employees’ visa spot.

Of course we do! Our office is located in the heart of Kreuzberg district in Berlin at Skalitzer Strasse 85. Feel free to stop by and meet with our team. For (future) EOR employees, we’d always recommend you to stop by and meet face to face. Our team will be happy to run you through the process of how the employment setup works.

Any questions, you can contact our team in Berlin directly via +49 30 3119 9653