Employer of Record & PEO Services in Germany

In the modern workforce, remote work is increasingly prevalent. e-square EOR and PEO services support the employment of remote workers in Germany while adhering to German legal requirements and tax regulations.

e-square Germany EOR and PEO services take care of the entire hiring process, from talent acquisition to onboarding. We ensure that your recruitment efforts align with German labor regulations, making it easier to find and onboard top talent in Germany and 20+ Countries.

Creating a well-structured employment contract is essential to protect your business interests. With the appropriate terms and conditions included, we assist you in creating employment contracts that are compliant with German law.

Employment contracts in Germany can be open-ended or fixed-term. Open ended contracts have no expiry date, but fixed term contracts are only valid for a particular period of time. Fixed term contracts are only permitted to be used by employers under specified conditions, such as when filling a temporary post or when there is a specific project with a deadline.

Navigating Germany's labor laws is essential for maintaining a compliant workforce. e-square experts provide guidance on employment standards, worker rights and workplace regulations, ensuring your business operates within the legal framework.

The recent major revisions to Germany's labor laws affect both companies and employees. These adjustments are a result of the nation's continual efforts to modify its labor laws in a fair and reasonable manner while also keeping up with the fast-evolving global economy.

Germany has specific regulations regarding working hours, overtime and rest periods. In Germany, workers typically work Monday to Friday for a maximum of 8 hours and 48 hours every week. There is a legal cap of 12 hours of overtime each week. In general, overtime is only permitted in exceptional cases and must be compensated with extra salary.

Germany has a statutory minimum wage that varies slightly depending on the industry. e-square keeps you updated on minimum wage rates and ensure your employees are compensated appropriately, no matter where they work.

The statutory minimum wage was increased on October 2022, to € 12.00 per hour. There are also sectoral minimum wages which is negotiated by trade unions and employers, if the employer is not covered by a collective agreement, the minimum wage will increase from € 12.50 to €13.40 per hour as on 1 April 2023.

A minimum commitment of 18.6% must be made if the earnings are less than EUR 175. As of October 2022, the employees' social insurance contributions reach gradually over the income range, reaching the maximum rate of EUR 1300 to EUR 1600 per month.

As of last update for 2023, Germany has four Tax brackets, the employee income tax rates for Germany residents are as follows:

• For the First tax bracket 0 - €10,908 of chargeable income Tax: 0%
• For the Second tax bracket €10,908 - €62,810 of chargeable income Tax: 14 – 42 %
• For the Third tax bracket €62,810 - €277,825 of chargeable income Tax: 42 %
• For the Fourth bracket tax above €277,825 of chargeable income Tax: 45 %

Germany has specific regulations regarding working hours, overtime and rest periods. In Germany, workers typically work Monday to Friday for a maximum of 8 hours and 48 hours every week. There is a legal cap of 12 hours of overtime each week. In general, overtime is only permitted in exceptional cases and must be compensated with extra salary.

Health insurance is mandatory for all employees in Germany. Our services help you navigate the intricacies of offering health insurance benefits, ensuring compliance with German healthcare requirements.

Employees who earn less than a specific amount €66,600 per year are required to have statutory health insurance; however, employees who earn more are given the option to purchase private health insurance. Although there is variation in price and coverage between the two insurance options, they both provide comprehensive coverage for medical services and treatments.

The company contributes 15% of the total compensation, while the employee contributes 3.6%.

Employees who earn less than a specific amount €66,600 per year are required to have statutory health insurance; however, employees who earn more are given the option to purchase private health insurance. Although there is variation in price and coverage between the two insurance options, they both provide comprehensive coverage for medical services and treatments.

Employees who earn less than a specific amount €66,600 per year are required to have statutory health insurance; however, employees who earn more are given the option to purchase private health insurance. Although there is variation in price and coverage between the two insurance options, they both provide comprehensive coverage for medical services and treatments.

Severance pay, also known as "Abfindung," is not mandatory under German labor law in cases of regular termination.

In some situations, such as mass layoffs or business closures, employees may be entitled to statutory severance pay based on their years of service.

This is regulated by the German Severance Pay Act (Abfindungsgesetz).

This is regulated by the German Severance Pay Act (Abfindungsgesetz).

In many cases, this severance will equal 50% of the monthly pay for each year of service.

In Germany, the minimum annual leave is 20 days for employees who work five days a week and 24 days for employees who work six days a week. However, in Germany, 30 vacation days are rather typical. Employees in Germany typically receive 28 days of vacation each year.

We offer comprehensive compensation and benefits solutions tailored to your business needs. From salary structuring to retirement plans, we help you design competitive compensation packages that attract and retain top talent.

e-square EOR and PEO services are designed to make your expansion into Germany as smooth as possible. We handle the complexities of German labor laws, allowing you to concentrate on your business's growth and success.

Contact us today to learn more about our Germany Employer of Record & PEO services.

In many cases, this severance will equal 50% of the monthly pay for each year of service.

Generally, both employer & employee must provide notice to terminate the contract.

The length of the notice period depends on the length of employment and is typically specified in the employment contract or collective bargaining agreement.