Hire full-time talent anywhere with EOR
Easily manage and pay your contractors
Run payroll with or without a subsidiary
Benefits & insurances for your workforce
Relocation and visa made easy
Find the best candidates for your team
Hire from $49, scalable & transparent
Hire in +180 countries
Data protection & Security
Hire fulltime talent anywhere through our EOR/PEO
Hire contractors abroad
Hire employees from $299
Outsource your international payroll
Employee relocation assistance
Source talent with our recruitment experts
Hire in +180 countries
Hire in 180+ countries in 24 hours
Customer-centric & affordable
Streamline your global operations
Hit your hiring targets faster
Make payroll seamless for your employees.
Hire abroad without legal admin
Shape your strategy with key insights
A behind-the-scenes look at the best EOR
Learn about the Horizons platform
Contact our support team
Calculate employment cost
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
Back
ALARY 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
Germany is Europe’s — and one of the world’s — strongest economies. It is a world innovation and tech capital, with a well-educated and highly-skilled workforce. These factors make Germany a prime location for hiring an overseas team, but in doing so it is crucial to follow German labor laws and employment etiquette.
In this guide, we set out everything you need to know about hiring employees in Germany.
Population 83M (Labor Force 41 million) | Capital City Berlin | Languages Spoken German |
Currency Euro (€) | GDP per capita $34,758 | Ease of Doing Business 22nd in the world |
Minimum Wage €1500/Month (2022) | Average Wage €3600/Month (2022) | Paid Leave 24-32 day annually |
Germany is Europe’s largest economy and in 2020 came fourth in terms of global market size, making it a logical choice for any business setting up European operations.
According to the World Bank, Germany’s GDP shrank by 4.6% in 2020 due to the pandemic. By 2021, however, the economy was in recovery and GDP in Germany grew by 2.9%. While the country is still experiencing significant inflation, future prospects continue to look positive.
Germany has relatively strict labor laws that protect employees, so it is important to understand your obligations as an employer before hiring there.
Key labor laws cover matters such as mandatory parental leave, sick leave, working hours, termination notice periods and severance.
Now that the United Kingdom has left the EU, it is likely that Germany will continue to solidify its position as the international business hub of Europe.
There are multiple benefits of doing business in Germany: This includes a commitment to innovation and technology, highly-skilled employees with excellent English proficiency, great infrastructure for business, and a direct and honest style of communication. On the other hand, some businesses do notice challenges when entering into German business culture for the first time: This includes bureaucratic complexity and a business culture that expects formality, punctuality, and efficiency.
To simplify the process further, you can hire a global Professional Employer Organization such as Horizons to work with you and find the perfect candidate for the job.
In-person interviews are standard in Germany. Because it is a country that relies on formalities, typically in-person is the best option. However, since the pandemic, as with most countries, online interviews have grown in popularity. One on one interviews are the norm, however panel interviews are also done in Germany. Candidates will expect the typical Western interview format of handshakes, small talk greetings, and business attire dress code.
In Germany, it is legal to ask a candidate for salary history. However, candidates are not obligated to disclose that information to you, and asking a candidate for their previous salary is not recommended procedure. If you must, it is legal to ask.
The average salary increase in Germany is around 3% annually.
Onboarding in Germany will varying from company to company. It is most important to be open and honest and as clear as possible about the position in the early days. Include all important legal information in a written contract for the employee to have for their own files.
Basics of onboarding an employee applies in Germany. For example, your new employee should be educated on company policy and procedure, given a proper amount of training, and given a friendly introduction to their team. Always allow them a channel to provide feedback about the onboarding process and ability to ask any questions to fulfil their needs. Quality onboarding procedure will pay dividends in good employees in the long run.
There are a variety of remote working tools in common use in Germany: Microsoft Office Suite, Monday, and Slack are amongst the most popular. German employees are usually adept with the latest technology, therefore you should be able to integrate any new employee into your current communication system with ease.
Date | Holiday name |
---|---|
1 Jan., 2023 | New Year’s Day (Neujahr) |
Date changes each year | Good Friday (Karfreitag) |
Date changes each year | Easter Monday (Ostersonntag) |
01 May, 2023 | Labour Day (Tag der Arbeit) |
Date changes each year | Ascension Day (Christi Himmelfahrt) |
Date changes each year | Whit Monday (Pfingstmontag) |
03 Oct., 2023 | Day of German Unity (Tag der deutschen Einheit) |
25 Dec., 2023 | Christmas Day (1. Weihnachtsfeiertag) |
26 Dec., 2023 | St. Stephen’s Day (2. Weihnachtsfeiertag) |
The average salary increase in Germany is around 3% annually. However, there is no set standard and the increase amount would depend on a variety of factors, most typically, performance of the employee. Sometimes a collective bargaining agreement with the employee could create for mandatory raises annually so it is best to fully understand the employment contract that is being signed.
This depends on the type of work that needs to be done: Whatever path that is chosen you must be clear in the contract which type of worker the contractor is. Misclassification of a freelancer as an employee can lead to serious repercussions for the offending company. .
In general, we recommend you use a German tax professional/Employer of Record to assess your situation and advise you on whether you should hire a German freelancer or employee. Hiring an employee may be the more expensive option, but is usually the least risky when you require fulltime work.
Yes, it is possible to hire foreign employees in Germany. However proper working visas and work permits are necessary.
Opening a subsidiary in Germany can be a difficult process due to the strict rules that apply and the slowness of the bureaucracy. You must incorporate the subsidiary (usually via a ‘GmbH’ or Gesellschaft mit beschränkter Haftung), pay the necessary establishment capital (€25,000), and complete all applicable registration for Germany’s tax and social security programs. Completing these steps requires the appointment of a special kind of administrative professional/lawter, a ‘Notare’.
Registering a branch office in Germany is similarly difficult.
In most cases, the fastest and safest way (from a compliance perspective) to get operations started in Germany is to hire your employees with a global Employer of Record registered to operate in Germany, like Horizons.
The process of hiring employees in Germany can be straightforward. If you have already identified a candidate, you can contact us for a free consultation and detailed description of how we can hire your German team in as little as 48 hours.
Your business can easily hire employees in Germany without opening a local entity. We handle local employment law, complex tax regulations, and international payroll in 180+ countries worldwide. All you need to do is focus on your business.
Americas
1700 S. Lamar Blvd Suite 338
Austin, Texas 78704
+1 (737) 265-6065
Europe
Skalitzer Str. 85/86
10997 Berlin
+49 30 3119 9653
Asia-Pacific & Oceania
71 Robinson Road #13-153
Singapore 068895
+65 3158 1382
Horizons © 2023 – Privacy Imprint & Terms Third-Party Processors