Germany at a glance
Taxes in Germany
Employer Contributions
| Contribution | Rate |
|---|---|
| Total employer tax | ~19.3% |
| Pension | 9.3% |
| Health insurance | 7.30% + 1.25% |
| Long-term care insurance | 1.53% |
| Unemployment insurance | 1.2% |
| Contribution | Rate |
|---|---|
| Total employer tax | ~19.3% |
| Pension | 9.3% |
| Health insurance | 7.30% + 1.25% |
| Long-term care insurance | 1.53% |
| Unemployment insurance | 1.2% |
| Contribution | Rate |
|---|---|
| Total employee tax | 19.3% – 64.3% |
| Pension | 9.3% |
| Health insurance | 7.30% + 1.25% |
| Long-term care insurance | 1.53% |
| Unemployment insurance | 1.2% |
| Gross Income | Tax Rate |
|---|---|
| Up to €12,096 | 0% |
| €12,097 – €68,429 | 14% – 42% (progressive) |
| €68,430 – €277,825 | 42% |
| Over €277,825 | 45% |
Employer of Record in Germany
How Remote& EOR Works
Germany requires an AÜG licence (Arbeitnehmerüberlassungsgesetz) to operate as an Employer of Record. Remote& holds this licence, enabling compliant employment without you needing a German entity.
| Party | Role |
|---|---|
| Your Company | Directs work, manages performance, allocates tasks |
| Remote& | Holds AÜG licence; runs payroll, files taxes, administers benefits |
| Employee | Works for your company under a locally compliant German contract |
Ask Remi:
"Hire a software engineer in Germany — €7,000/month, starting next month" Remi handles everything: AÜG-compliant contract, payroll setup, social insurance registration, and benefits enrollment.
Benefits in Germany
All employees receive social insurance coverage across five pillars:
- Pension insurance
- National health insurance
- Unemployment insurance
- Long-term care insurance
- Accident insurance (employer-funded)
- Christmas bonus or 13th-month pay
- Extra annual leave days
- Flexible working hours / remote work
- Phone and internet allowance
- Housing or childcare subsidy
- Company pension (betriebliche Altersvorsorge)
- Gym membership
- Savings plans (VWL)
- Life insurance
Leave entitlements
| Leave type | Entitlement |
|---|---|
| Paid Annual Leave | 20–24 working days + 9 public holidays |
| Sick Leave | 6 weeks (employer-paid), then statutory sick pay |
| Maternity Leave | 14 weeks (6 weeks before, 8 weeks after birth) |
| Paternity Leave | None (statutory) |
| Parental Leave | 12–14 months (shared between parents) |
Employment conditions
Probation
Probationary periods must be expressly agreed in the contract and cannot exceed 6 months. During this period, either party may terminate with just 2 weeks' notice.
Employee Rights & Protections
German workers benefit from: written employment contract, flexible working rights, safe working environment, sick leave protections, whistleblower protection, termination safeguards, works council representation, redundancy payment rights, payslip requirements, and pay transparency.
Payments
End of employment in Germany
Germany has robust dismissal protections. Two types of termination exist:
- Ordinary dismissal: Requires statutory minimum notice period; justified grounds required for employees with contracts over 6 months at companies with 10+ employees
- Extraordinary dismissal: Immediate termination permitted only for serious gross misconduct
Separation agreements are common and often the most practical path. Severance pay is not automatically mandated if proper notice is given and a justified reason exists, though it is frequently negotiated.
Frequently asked questions
Four routes: run payroll from HQ for short-term cases; use contractors for project-based work; set up a German GmbH (time-consuming and expensive); or partner with an AÜG-licensed Employer of Record like Remote&. The EOR route is the fastest compliant path for most growing teams.