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Global Expansion Guide

Germany

Manage and pay your employees easily with BIPO in Germany and 170+ other markets. Build your international teams today with our global Employer of Record service!

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Currency

Euro (EUR)

employment guide_language

Language

German

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Capital

Berlin

Employer of Record Germany

Employment Contract

Statutory Contributions

Minimum Wage

Public Holidays

Working Hours

Leave

Termination and Compensation

BIPO as your Employer of Record

Benefits of BIPO EOR Service in Germany

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  • Global Hiring Guide
  • Germany

Employer of Record Germany

Embark on your business expansion in Germany with BIPO’s Employer of Record (EOR) services. Designed to assist you in navigating the intricacies of local employment laws and regulations, we can help ensure a smooth transition for your business and workforce.

As an Employer of Record (EOR), we act as your legal employment entity, streamlining the process of business expansion. Allowing businesses to focus on their core business operations while the EOR manages all aspects of compliance, payroll, HR, and employee benefits when venturing into the German market. An EOR provider addresses the common challenges associated with local employment laws, payroll regulations, and work permit requirements.

Employment Contract

Contract types: fixed-term contract and indefinite contract.

Contracts shall be in written form and include below contents:

  • Name and address
  • Commencement date
  • End date, if not specified shall be considered as an indefinite contract
  • Length of probationary period: it is relatively easy to terminate the employee during this period.
  • Work location
  • Position and job description
  • Salary and benefits
  • Applicable vacation and leave entitlements
  • Working hours
  • Notice period of termination
  • Non-compete clause (not applicable to all positions, optional)

Effective 1st of January 2025, employees in Germany will be able to sign a work contract digitally and will not have to provide an autograph to validate the contract. However, wet signatures remain mandatory for fixed-term contracts or short-term contracts as well as in certain industries such as hospitality, logistics and meat processing.

Statutory Contributions

TypeDetailsEmployer ContributionEmployee Contribution
Pension Insurance (Rentenversicherung)Retirement benefits9.30%9.30%
Unemployment Insurance
(Arbeitslosenversicherung)		Unemployment benefits1.30%1.30%
Health Insurance (Krankenversicherung)Healthcare benefits7.30%+X (which has been increased significantly in 2025, shared maximum Contribution rate is 2.5%）7.30%+X (which has been increased significantly in 2025, shared maximum Contribution rate is 2.5%）
Nursing Care Insurance
(Pflegeversicherung)		Disability security1.70%1.9%
Childless employees older than 23 pay an additional 0.4%.
Employees with 2-5 children, -0.3% for each child (minimum contribution rate is 0.9%)
Accident Insurance (Arbeitsunfall)Work injury and occupational diseases security0.96% Vary by the risk levels of the employers’ industries–
 Total of aboveAbout 21.81%About 20.05-21.45%

Minimum Wage

The statutory minimum wage of Germany has been adjusted from EUR 12.41 to EUR 12.82 per hour and taken effect from 1st of January 2025.

Public Holidays

The Public Holidays in Germany in 2025 is shown as following. Please refer to the announcement of the federal / jurisdiction government of Germany.

Holiday Name  Date 
New Year’s Day 1 January 2025
Good Friday 18 April 2025
Easter Sunday 21 April 2025
Labour Day 1 May 2025
Ascension Day 29 May 2025
Whit Sunday 9 June 2025
German Unification Day 3 October 2025
Christmas Day 25 December 2025
Boxing Day 26 December 2025

Working Hours

Normal Working Hours

  • Executed according to Employment Contract, Collective Bargaining Agreement, Works Agreement.

Rest Time

  • Executed according to Employment Contract, Collective Bargaining Agreement, Works Agreement.
  • Generally, the rest day is Sunday (for 6-day workers) or Saturday & Sunday (for 5-day workers), except restaurants or catering.

Night Work

  • Night working hours are regarded more than 2 hours’ performance between 11:00 pm one day and 6:00 am the next day.
  • Executed according to Employment Contract, Collective Bargaining Agreement, Works Agreement.

Overtime

  • Any hours worked in excess of standard working hours are considered overtime.
Restrictions on overtime work:
  1. The employer may require employees to work overtime only if it is stipulated in the employment contract or collective bargaining agreement, work agreement.
  2. Overtime pay: Time off in lieu is allowed alternatively, instead of overtime pay.
    • 1.5 times of the employee’s regular pay rate or at the rate agreed in the Collective Bargaining Agreement or Works Agreement.

Other Regulations

Often, in addition to the employment contract, special regulations also apply. For instance:

  • In many branches of industry, employer associations and trades unions have reached collective bargaining agreements. These agreements may regulate questions of remuneration, bonuses or holidays.
  • Employers can also sign special agreements with their employee councils, which represent the interests of the employees. These are called Works Agreement. The employee can ask his / her employer if these agreements also apply to him / her. This may also be stated in the employment contract signed between the employee and the employer.
  • Tracking of working hours must be completed, either electronically or manually by every employer (not only in specific industries or similar). The ruling will take effect later in 2025, but employers are already expected to follow through.

Probationary Period

  • Executed according to Employment Contract, Collective Bargaining Agreement, Works Agreement.
  • Normally no more than 6 months in practice.

Leave

Statutory leave in Germany includes:

Type Applicable to Details
Paid Annual Leave All Employees 24 working days
Pregnancy and Maternity Leave Female Employees 14 weeks (pre-natal leave: 6 weeks + post-natal leave: 8 weeks
Sick Leave All Employees According to the actual situation (first 6 weeks are paid)
Parental Leave Employees with children under three years of age 14 months. From 1st of April 2024, both parents can only take one month of leave at the same time
Educational Leave All Employees 3-5 days (according to the regulation of every jurisdiction)
Breastfeeding Leave Female Employees Twice per day, 30 minutes per each.
Family Care Leave All Employees
  • Short-term leave: up to 10 days
  • Long-term leave: 1-6 months
Organ Donation Leave All Employees 6 weeks
Paternity Leave Male Employees 10 days (from 2024)
Sick Child Leave Employees with children under twelve years of age
  • 15 days
  • Single parent: 30 days
  • Multi-children: 35-70 days (from 2024)

Termination and Compensation

Termination Notice

  • Executed according to Employment Contract, Collective Bargaining Agreement, Works Agreement.
  • If a German employer has more than 5 employees and has established a works council, the employer must seek opinion from the works council before dismissing any employee, otherwise the dismissal decision will be invalid.
  • The best practice for the company is to sign a termination agreement with the employee, to avoid legal disputes.

Compensation

  • Executed according to Employment Contract, Collective Bargaining Agreement, Works Agreement.

BIPO as your Employer of Record

BIPO’s total HR solutions include our award-winning HR Management System, Global Payroll Outsourcing, Employer of Record service, and Athena BI.

As your EOR partner, our services are designed to provide a comprehensive, hassle-free experience:

  • Initial Consultation: The journey typically begins with an in-depth discussion to understand your specific business needs, ensuring our EOR services perfectly align with your objectives.
  • Payroll Management: We offer a streamlined payroll system that ensures timely and accurate salary disbursement, complete with statutory deductions and contributions in full compliance with German regulations.
  • Contributions and Taxes: Our expertise in managing local social security requirements ensures your business complies with Germany’s financial obligations.
  • Compliance with Working Hours: We guarantee that your employment practices adhere to Germany’s working hours standards, safeguarding your business against potential legal issues.
  • Leave and Paid Time Off Management: Implement and manage leave policies that comply with German laws, ensuring a fair and transparent leave management system for your employees.
  • Regulatory Compliance: Stay ahead of local labour laws and regulations with our up-to-date compliance services, minimising legal risks for your business.
  • Other services: Work visa, permit applications, termination procedures.

Services may vary across countries.

Benefits of BIPO Employer of Record Service in Germany

Unlock your growth potential with BIPO’s Employer of Record service in Germany. Our EOR service empowers businesses with seamless scalability while ensuring regulatory compliance.

From smooth onboarding to risk mitigation, BIPO handles the administrative HR tasks, enabling companies to concentrate on core business functions and accelerating growth. Our local expertise and global reach ensure efficient operations, enhancing flexibility and reducing operational complexities.

Stay up to date with the latest employment regulations.

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Frequently Asked Questions

An Employer of Record (EOR) is a partner company that acts as the official employer for your employees. 

An EOR company handles all the HR aspects and processes, including the legal complexities associated with regulatory and tax compliance.

As your EOR, BIPO supports your organisation by providing a comprehensive range of HR, payroll and advisory services to ensure your business stays compliant. These include end-to-end on/offboarding services for your employees (e.g.: payroll processing, HR and benefits administration, labour contracts, visa applications, payroll/tax compliance, and more).

By engaging BIPO as your EOR, your business benefits from: 

  • Compliance in the global markets where you operate
  • Reduced costs and risk mitigation
  • Overall workforce productivity, effectiveness, and efficiencies

A global EOR benefits organisations regardless of size or industry. It is especially useful for organisations that want to:

  • Scale their global business and be fully operational in foreign markets quickly
  • Reduce financial and HR complexities while expanding internationally
  • Minimise time spent trying to understand local labour laws and foreign tax systems
  • Stay compliant across global markets while reducing HR and administrative workflows
  • Benefit from a centralised and intuitive cloud HR platform to manage international teams

A global EOR enables businesses to fast-track their market entry into international market, and reduce the complexities of setting up multiple foreign entities.

When you partner with BIPO, we take on the the day-to-day administrative tasks, while you maintain full control of the business and delegate HR workflows and hiring needs.

Our vast network of business partners across 170+ markets globally supports your business expansion plans, with in-country HR experts providing localised support. Going global has never been easier!

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