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Hiring guide in Germany

Have the latest guide for hiring in Germany through Native Teams

What should I know about hiring in Germany?

There are a few factors to remember while making an employment decision in Germany. To begin, Germany has stringent rules governing the workplace. Consequently, businesses are subject to a number of regulations regarding employee hiring practices.

As a first step, you should have a good purpose for making the hire. This justification must be specified in the employment agreement. The second thing to do is to provide decent salaries and working conditions.

Finally, you should follow all applicable rules and regulations. But if you play by the rules, finding and employing employees shouldn’t be an issue.

Why is Germany a good choice for finding remote employees?

The German labor force is exceptionally well-educated and skilled. The percentage of the population with a university degree is among the highest worldwide in Germany. Therefore, businesses in need of remote labor can pick from a vast pool of applicants. 

In addition, German workers have a solid reputation for productivity and dependability. Also, German enterprises can benefit from several infrastructure benefits that make the country a desirable location for remote operations. High-speed internet is accessible to most people in the country, and the telecommunications infrastructure is advanced. 

Therefore, businesses wishing to establish or expand their remote operations have Germany on their shortlist of potential locations. With its many positive qualities, the country is a great place to look for remote workers.

How can Native Teams help you hire in Germany

There is a lot of interest among businesses in growing their presence in the booming German economy. However, it might be challenging to know where to begin if you are unfamiliar with the German labor market. Working together with Native Teams is invaluable in these kinds of crises. Having a Native Team on your side may help ensure that your business is compliant with all applicable laws in Germany, from the time of employment to the final payment of wages and benefits.

Hire your first German employee with Native Teams.

Legal requirements for hiring in Germany

Minimum wage

A month’s minimum wage in Germany is EUR 1,702.13.

Contributions & taxes

Employer tax

The total compensation for an employee is 20.64%. 7.90% is allocated to health insurance (KV), 0.60 % is allocated to TK-specific supplementary contribution rate, and 9.30 % is allocated to Pension Insurance. The remaining 1.20% is allocated to Unemployment Insurance, 1.52% to Long-term care insurance (PV) and 0.12% to Insolvency Charge.

Corporate tax

The German government has established a 15% tax rate for corporations. This can be increased by an additional 30%-33% with the application of a trade tax and a solidarity surcharge. Each jurisdiction has its own tax rate.

Income tax

A person’s tax rate ranges between 14% and 45%. Taxes on income are assessed at progressive rates. The rate is determined by the employee’s tax classification, such as married status, employees with one or more income sources and the total monthly salary.

To calculate the salary and taxes in Germany please click here.

Payroll cycle

Payroll is processed monthly in Germany and is usually distributed on or around the 25th of each month.

Is there a 13th salary in Germany?

In Germany, it is common practice to receive a 13th-month salary payout on the regular December payday.

Labor rules

Probation period

Contracts of employment often include provisions establishing trial periods. The standard in Germany, however, is up to six months.

Notice period 

German notice periods are typically four weeks but might vary depending on the terms of the individual contract or collective bargaining agreement.

  1. After 2 years of employment: Employees must provide 4 weeks’ notice before the 15th or the last day of the following month;
  2. After 2 to 4 years of employment: Employees must provide one month’s notice before the end of the following month;
  3. After 5 to 7 years of employment: Employees must provide 2 months’ notice before the end of the following month.
  4. After 8 to 9 years of employment: Employees must provide 3 months’ notice before the end of the month;
  5. After 10 to 11 years of employment: Employees must provide 4 months’ notice before the end of the month;
  6. After 12 to 14 years of employment: Employees must provide 5 months’ notice before the end of the month;
  7. After 15 to 19 years of employment: Employees must provide 6 months’ notice before the end of the month;
  8. After more than 20 years of employment: Employees must provide 7 months’ notice before the end of the month.

Severance period

Employers are not required to provide severance pay under normal circumstances. Still, if they do, it will equal the employee’s regular pay rate in case of a termination without cause. If a worker is let go because of internal company changes, they are entitled to severance pay equal to two weeks’ worth of income for every year of service.

Working hours

Standard workweeks in Germany consist of 8 hours, five days a week, with 1 hour or 30 minutes off for lunch. Working hours in Germany are governed by law, and citizens are not allowed to put in more than 8 hours daily. In addition, employees are not permitted to put in more than 48 hours in a single workweek.

Leave and benefits

Public holidays

There are 9 federal holidays celebrated across Germany and many more state-level holidays.

  1. New Year
  2. Good Friday
  3. Easter Monday
  4. Labour Day
  5. Ascension
  6. Whit Monday
  7. Day of German Unity
  8. Christmas
  9. St. Stephen’s Day

Sick leave

If an employee has worked for the company for at least four weeks before taking sick leave, they are eligible to receive sick pay of 100% of regular income for a maximum of six weeks. Until the employee’s social security cap is reached, the company will repay them at 70% of their gross salary but never more than 90% of their net salary.

Maternity leave & paternity leave

The first part of maternity leave, called “prenatal,” must be taken at least six weeks before the projected due date, and the second part, called “postnatal,” must be taken at least eight weeks after the child’s birth. The national health insurance system covers maternity payments. There is no mandatory paternity leave policy in Germany. In any case, workers have the right to take time off for parental reasons.

Other leave

Parental leave

Legally, new parents in Germany are entitled to unpaid parental leave, but they must apply for it in writing at least seven weeks before it is to begin. Each parent is eligible for 8 weeks of postnatal leave and 36 months of parental leave. 

The first 12 months of parental leave need to be taken during the first three years, but the remaining 6 months can be taken at any time between the child’s second and seventh birthdays with the employer’s approval. In addition, with the employer’s approval, parents can work up to 30 hours per week of reduced hours during parental leave.

Alternative departure

Family care time is just one sort of leave that may be available to workers once they negotiate and receive approval from their employers, depending on the collective agreement. In addition, an employee is eligible for up to 10 days of unpaid Family Care time to care for a family member who is very ill or has had a family emergency.

What are the minimum vacation days?

In accordance with the Bundesurlaubsgesetz (Federal Holidays Act), the bare minimum of annual leave is 24 calendar days. However, workplace hazards and high-risk occupations often warrant additional paid time off, and many collective bargaining agreements expand this benefit to 30 workdays.


Health security & private insurance

Anyone who has worked for an employer for at least three months within the previous fifteen months is entitled to free medical and dental care through the Social Security Administration.

*Native Teams can support you in finding the best private insurance in the country. Contact us, and we will send a comparison of insurance packages and prices.*


Relocation and work permits

Native Teams will apply for your work visa in the nation on your behalf and serve as your Employer of Record. All the required documents can be uploaded using our app. Until you have your work and residency visa, Native Teams will support you by providing you with frequent information on the progress.

How long is the visa/work permit process?

2 to 4 weeks, depending on the authorities and provided documents.

Which documents do you need?

To apply for a visa/work permit in Germany, upload the documents from our onboarding list (relocation to log in/pricing).

Why use Native Teams for hiring in Germany?

Native Teams lets you employ team members ‘like a local’ meaning you get all the benefits of a global team, wherever you are based. Here are the reasons why you should use Native Teams for hiring:

  • No paperwork: We will handle all the necessary paperwork for you.
  • Save on taxes: We help you handle your taxes.
  • No company set up: You can expand your business using our company entitles.
  • Online onboarding: We’re here to ensure your onboarding process is trouble-free.
  • No accounting: We will handle all of your accounting needs, including invoicing, payroll, and more.
  • Increase your profit: We assist you in growing your business and maximizing your profits.
  • Compliance expertise: we can assist your company in navigating the regulatory environments and ensure you meet all relevant requirements.
  • Local support: We can assist you in understanding and complying with the relevant local laws.
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*Note: The provided information was accurate at the time of writing.

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