Employer of Record (EOR) in Germany
Native Teams offers solutions for businesses in Germany looking to hire globally in a compliant manner and freelancers who want a regulated employment status with all the benefits.
How does an EOR in Germany work?
Partnering with an Employer of Record (EOR) like Native Teams enables businesses to expand globally without needing to establish a legal entity or navigate complex regulations. The EOR handles administrative tasks such as payroll, employment contracts, onboarding, and compliance with local laws, while businesses maintain control over employee management.
For freelancers, remote workers, and digital nomads, an EOR provides formal employment benefits, including health insurance, pension plans, and legal contracts, while allowing them to keep their flexible work arrangements.
Who can use EOR Services in Germany?
EOR is a great solution for businesses that want to expand their global workforce across borders and for solo professionals who want the benefits of traditional employment.
Businesses
Businesses of all sizes, from startups to large corporations, can leverage EOR services in Germany. These services are especially useful for companies expanding into Germany without setting up a legal entity. By partnering with an EOR, companies can hire local employees, handle payroll, and remain compliant with German labour laws efficiently.
Individuals
Freelancers, remote workers, and consultants in Germany can benefit from EOR services and enjoy the advantages of traditional employment. By using an EOR, individuals can obtain legal employment status, ensuring compliance with tax regulations, social security, and other legal obligations.
Features of Native Teams EOR Services in Germany
Employment status
Native Teams' EOR services allow freelancers to manage their employment status legally, no matter where they live and work. Employers can hire and pay their global teams in compliance with local laws.
HR administration and documentation
HR tasks are automated, with essential documentation accessible in your dashboard with one click.
Global payroll
With a payroll calculator available in over 70 countries, both freelancers and employers can easily calculate salaries, taxes, and benefits all on one platform.
Benefits
Freelancers enjoy flexible work with employment perks, while employers can offer benefits to attract top talent.
What legal requirements exist for employment in Germany
Employment contract
Employers must provide a written employment contract to the employee, which outlines the terms and conditions of employment, including job description, working hours, salary, benefits, and notice periods.
Minimum wage
Germany has a statutory minimum wage, and employers must ensure that employees are paid at least the minimum wage set by law.
Social security contributions
Employers are responsible for deducting social security contributions from the employee's salary and also contributing their share to the social security system. Social security contributions cover health insurance, pension insurance, unemployment insurance, and long-term care insurance.
Income tax withholding
Employers must withhold income tax from the employee's salary and remit it to the tax authorities on behalf of the employee.
Health and safety regulations
Employers must ensure a safe and healthy working environment for their employees and comply with health and safety regulations.
Immigration and work permits
If hiring non-EU employees, employers must follow immigration and work permit procedures.
Please note that all these requirements may vary depending on the job type, the employer and individual circumstances.
Explore Germany's labour laws further in our guide.
Why Choose Native Teams as your Germany Employer of Record?
Native Teams is an all-in-one platform that enables employers, their employees, and solo professionals to get a locally crafted employment status and cover social security contributions and taxes. Our team of experts ensures that your global work is aligned with the local labour laws and regulations in Germany. On top of that, we offer global mobility services for a smooth relocation process, so you don’t have to deal with the administrative procedures that come with obtaining a visa.
What is an Employer of Record?
An Employer of Record (EOR) is a third-party entity that takes on the legal responsibilities of hiring employees on behalf of another company. It manages tasks like payroll, tax withholdings, benefits, and compliance with local labor laws. Additionally, EOR services can assist freelancers and remote workers by providing formal employment status, access to employee benefits, and handling administrative duties.
What are the costs of using an Employer or Record in Germany?
The cost of using an Employer of Record (EOR) in Germany depends on factors like the provider, employee count, and required services. Native Teams offers one of the most budget-friendly and transparent pricing options. Our Employer of Record plan for businesses starts at €79 per month per employee, while the Remoter plan for individuals begins at €49. Both plans include essential tools and features for legal employment.
What is the difference between PEO and EOR?
An EOR takes full legal responsibility for employees, handling payroll, taxes, benefits, and legal compliance. This is ideal for businesses hiring in new regions without setting up a legal entity. A PEO, on the other hand, shares employment duties with the client in a co-employment model. While the PEO manages HR functions, the client remains the legal employer and shares compliance responsibilities. PEOs are typically used by companies with a legal presence that want to simplify HR tasks.
What are the responsibilities of an Employer of Record (EOR) service provider?
An EOR acts as the legal employer, ensuring compliance with local labor laws and handling payroll, benefits, contracts, and the onboarding and offboarding processes. The EOR reduces the client company's liability for employment-related issues, allowing the client to focus on business management while the EOR manages employment complexities.
Is using an Employer of Record in Germany legal?
Yes, using an EOR in Germany is legal and adheres to local labour laws. Many international companies use EOR services to enter the German market, while freelancers rely on these services to formalise their employment status.
Why should I use EOR instead of opening my own company or an office in Germany?
An EOR saves you time and money by avoiding the complex process of establishing a legal entity in Germany. The EOR handles legal responsibilities like payroll, taxes, and compliance, allowing you to start operations quickly. If business conditions change, an EOR also offers the flexibility to scale up or down without the complications of closing a legal entity.
How many people can I employ in Germany?
There is no legal limit on the number of employees a company or employer can hire in Germany. The number depends on your business needs, financial capacity, and ability to manage employees effectively, whether you hire through an EOR or your own company.