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)

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Language

German

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Capital

Berlin

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.

This guide was last updated on 17 December 2025. The content in this guide is current as of this date and based on common business practices.

Employment Contract

  • The employer shall, within the prescribed time limit, set out the core terms of the employment relationship in writing, sign the contract, and deliver it to the employee.
  • The written employment contract must include at least the following:

    1. Names and addresses of both parties to the contract.
    2. Commencement date of the employment.
    3. For fixed-term contracts, the termination date or expected duration of the contract.
    4. Workplace: If the employee is not required to work at a fixed location, it should be stated that the employee may work at multiple locations or may choose the workplace independently.
    5. Brief job description or nature of the employee’s work.
    6. Probation period, if agreed by both parties.
    7. Remuneration, including overtime pay, subsidies, bonuses, special payments, and other components. Each item should be listed separately, with payment terms and methods clearly specified.
    8. Working hours, rest periods, and vacation time; if a shift system is implemented, the shift schedule, cycle, and conditions for adjustments must be specified.
    9. For employees providing on-demand employment services under the “Part-Time and Fixed-Term Employment Act”:

      • Agreement that the employee provides labour according to employment needs.
      • Minimum number of compensated working hours.
      • Reference period for determining working hours (defined by reference date and reference hours).
      • Period within which the employer must notify the employee of the work schedule in advance.
    10. Overtime arrangements, if agreed, including the employer’s authority to assign overtime and the corresponding conditions.
    11. Duration of annual paid leave.
    12. Entitlement to vocational training opportunities provided by the employer, if applicable.
    13. If the employer provides supplementary enterprise pension insurance, the name and address of the pension institution must be specified. If the pension institution is legally required to disclose information, the employer is not required to perform this certification again.
    14. Termination procedures, including at least the written form requirement, notice periods, and time limits for filing a dismissal protection claim.
    15. Applicable collective agreements, enterprise agreements, or official agreements, as well as relevant rules of joint labour-management committees (including those for church employers under church law).
  • Prescribed time limits for delivery:

    • Items 1, 7, and 8: Delivered no later than the employee’s first working day.
    • Items 2–6 and 9–10: Delivered no later than the seventh calendar day after the commencement date.
    • Items 11–15: Delivered no later than one month after the commencement date.

Statutory Contributions

Social Insurance TypeCapEmployee ContributionEmployer Contribution
Pension Insurance

EUR 8,050 per month

EUR 96,600 per year

9.30%9.30%

 

Health Insurance

Average supplementary rate of 2.5% (prescribed by the Federal Ministry of Health)

EUR 5,512.50 per month

EUR 66,150 per year

7.3% + 1.25%7.3% + 1.25%
Unemployment Insurance

EUR 8,050 per month

EUR 96,600 per year

1.30%1.30%
Long-Term Care Insurance

EUR 5,512.50 per month

EUR 66,150 per year

0.8% – 2.4%
(based on number of children)
1.80%
Work-related Injury InsuranceContribution = (Total employee salary × Contribution rate × Risk level) ÷ 1,000

Minimum Wage

Effective Date Minimum Hourly Wage
1 January 2025 EUR 12.82
1 January 2026 EUR 13.90

Public Holidays

The public holidays listed below are national public holidays observed across Germany. Individual states and territories may observe additional public holidays. Please refer to official government announcements for the latest updates.

  • New Years’ Day
  • Good Friday
  • Easter Monday
  • Labour Day
  • Ascension Day
  • Whit Monday
  • Day of German Unity
  • Christmas Day
  • Boxing Day

Note: Work should generally not be scheduled on public holidays. Where work is required, compensatory leave must be granted within eight weeks.

Overtime Compensation for Work on Public Holidays: This shall be governed by the applicable collective agreements or enterprise/service agreements.

Working Hours

Normal Working Hours

  • Working hours shall not exceed eight hours per day. They may be extended to up to ten hours, provided that the average daily working hours over a six-month (24-week) reference period do not exceed eight hours.

Rest Breaks During Work

  • For working time of more than six hours and up to nine hours, employees are entitled to a rest break of at least 30 minutes.
  • For working time exceeding nine hours, the rest break must be at least 45 minutes. This may be divided into several periods of no less than 15 minutes each.
  • Continuous work for more than six hours without a rest break is not permitted.

Daily Rest

Employees must be granted an uninterrupted rest period of at least 11 hours following the end of each working day.

Weekly Rest

Work should generally not be scheduled on Sundays. Where Sunday work is required, compensatory leave must be provided within two weeks. Employees must have at least 15 Sundays off per calendar year.

Special Provisions

Working hours and rest periods may be adjusted through collective agreements or enterprise/service agreements, including arrangements to extend working hours, shorten rest periods, or adjust night-shift hours, provided that employees’ health and safety are safeguarded.

Overtime Compensation

Overtime pay and related arrangements shall be governed by the applicable collective agreements or enterprise/service agreements.

Leave

Annual Leave

  • Applicable Employer Type: Single employer.
  • Eligibility: All employees. Full annual leave entitlement applies after six consecutive months of employment.
  • Entitlement:

    • 24 days per year.
    • Where an employee has not completed six consecutive months of service, annual leave is accrued at a rate of two days per completed month of work (24 ÷ 12).
  • Annual Leave Pay: Paid at the employee’s full salary, calculated as the average salary over the 13 weeks preceding the start of the leave, excluding overtime and other additional payments.
  • Unused Annual Leave: Any unused annual leave remaining at the time of resignation must be compensated in full.

Sick Leave

  • Eligibility: All employees.
  • Paid Sick Leave:

    • Maximum duration of six weeks, applicable to continuous sick leave or recurrence of the same illness, provided that there is an interval of at least six months between episodes, or 12 months have elapsed since the start of the first sick leave.
    • Entitlement: Employees become entitled to sick pay after four consecutive weeks of employment.
    • Pay Rate: Full salary, excluding overtime and other additional payments.
  • Unpaid Sick Leave:

    • Duration is determined based on actual circumstances.
    • Employees covered by statutory health insurance may receive sickness benefits after the initial six weeks.
    • Sickness Benefit: 70% of gross salary, capped at 90% of net salary.
    • Maximum Duration: Up to 78 weeks for the same illness (including the initial six weeks of paid sick leave), calculated within a three-year reference period.

Maternity Leave

  • Eligibility: Female employees before and after childbirth.
  • Duration:

    • Six weeks before childbirth and eight weeks after childbirth.
    • Extended to 12 weeks following childbirth in cases of multiple births or premature births.
  • Allowance:

    • For employees covered by statutory health insurance, the insurance provider pays EUR 13 per day, and the employer tops up the difference to the employee’s average net daily salary.
    • For employees not covered by statutory health insurance, the Federal Social Security Agency provides a maternity benefit capped at a total of EUR 210.

Other Leave Types

  • Breastfeeding Leave:

    • Applicable to female employees during lactation (within 12 months after childbirth).
    • Entitlement includes either two breaks of 30 minutes or one break of 60 minutes per working day.
    • For continuous work exceeding eight hours, two breaks of at least 45 minutes each apply.
    • Where no breastfeeding facilities are available near the workplace, one break of at least 90 minutes applies.
    • Paid at full salary.
  • Parental Leave:

    • Applicable to parents, adoptive or foster parents, and certain caregivers of grandchildren.
    • Maximum duration of three years, inclusive of maternity leave.
    • Up to 24 months may be deferred until the child reaches between three and eight years of age.
    • Unpaid; however, parental allowance may be claimed at 67% of the employee’s income prior to the child’s birth, subject to a maximum of EUR 1,800 per month where no employment income is earned during the relevant period.
  • Care Leave:

    • Applicable to employees caring for close relatives.
    • Short-term care leave: Up to 10 working days to manage acute care situations.
    • Long-term care leave: Up to six months (subject to agreement for employers with 15 or fewer employees).
    • Leave may be taken on a full-time or part-time basis and requires advance written notice and supporting documentation.
    • Generally unpaid, although a care allowance may be claimed.
  • Miscarriage Leave:

    • In the event of a miscarriage, the employer must not require the employee to work unless she expressly states her willingness to do so.
    • Where the miscarriage occurs:

      • After the 13th week of pregnancy: No work for two weeks;
      • After the 17th week of pregnancy: No work for six weeks;
      • After the 20th week of pregnancy: No work for eight weeks.
    • The employee may withdraw her consent to work at any time, and the employer must immediately cease assigning work.

Termination and Compensation

Notice Period

  • During the Probationary Period:

    • 2 weeks’ notice
    • Applicable to both employers and employees
  • General Notice Period:

    • 4 weeks’ notice, with termination taking effect on either the 15th of the month or the end of the month.
    • Applicable to both employers and employees
  • Extended Notice Periods (Employer-Initiated Termination): Where the employer terminates the employment, the notice period increases based on the employee’s length of continuous service with the same employer. In all cases, termination takes effect at the end of the month:

    • 2 years’ service: 1 month’s notice
    • 5 years’ service: 2 months’ notice
    • 8 years’ service: 3 months’ notice
    • 10 years’ service: 4 months’ notice
    • 12 years’ service: 5 months’ notice
    • 15 years’ service: 6 months’ notice
    • 20 years’ service: 7 months’ notice
  • Collective Agreements: Statutory notice periods may be modified by collective agreements. Such agreements may apply even if the employer or employee is not a trade union member or a direct party to the agreement, provided both parties agree to their application.

Compensation

  • Where the employer terminates the employment for operational or structural reasons, compensation may be expressly offered in the termination notice in accordance with the Dismissal Protection Act.

    • If the employee accepts the compensation and does not file a dismissal protection claim within the statutory three-week period, the right to compensation arises upon expiry of the notice period.
    • Compensation is calculated at half a month’s salary for each full year of service, with any service period exceeding six months rounded up to one full year.
  • In all other cases, compensation shall be determined in accordance with the applicable collective agreements or enterprise/service agreements.

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!

Find out more?

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