Germany EOR & PEO

Start hiring in Germany

Simple, compliant hiring with Horizons EOR

EOR in Germany

Horizons provides compliance solutions to ensure your business in Germany operates in line with German labor laws and tax regulations. Businesses benefit from hiring in, investing in, or job outsourcing to, Germany in a range of industries, from customer service, to accounting services, to software development.

We also process monthly payroll, and, as a German Employer of Record, absorb all local employer liabilities. Partnering with our German EOR is the quickest and most cost-effective way to enter the German market or hire remote team members.

Note, a German Employer of Record is also known as a German Professional Employer Organization (PEO).

Facts & Stats

Our Presence in Germany

Our Germany EOR solution enables you to hire and expand across Germany.

From our Berlin office, we recruit and hire across Germany, from Bavaria to Hamburg, ensuring full compliance with state and federal laws.

As our European headquarters, employees of our Berlin office will help coordinate your greater-Europe expansion.

Employment Laws

AÜG Labor Leasing Licence in Germany

At Horizons Germany, we operate under a labor-leasing license (Arbeitnehmerüberlassung – AÜG), which is seen as a temporary employment solution by the German leasing labor authorities. This license allows us to deploy employees to the same end-client for a maximum of 18 continuous months.

There are specific guidelines to keep in mind:

Once the 18 month deployment limit has been reached, there are a number of options to continue the deployment to the end-client: The preferred solution is that, in the meantime, the end-client has set up their own entity, e.g. GmbH, in Germany and can hire the employee directly under their entity (Horizons can assist with this set-up process).
The employee signs a termination agreement ceasing their employment with Horizons and takes a mandatory “cool-off” period of 3 months plus 1 day before being re-hired by Horizons and re-deployed to the end-client. Simply switching Employer of Record, e.g. Horizons to another Germany EOR provider, is not a legal option. The deployment to the end-client can only have a maximum duration of 18 continuous months, regardless of who the Employer of Record is.

With Horizons as your Employer of Record in Germany, we can assist you with finding the best solution for you while staying 100% compliant with the german labour law and avoid fines.

Consult with a Horizons hiring specialist to explore these opportunities and find the right path for your international employment needs.

Expert Insights from

Tom Kussmann, COO (Berlin Office)

Operating in full compliance is our top priority at Horizons. While the labor leasing framework in Germany is challenging to navigate, our team based out in Berlin has a vast experience in securing your next hire in Germany.

Employment Agreements in Germany

Employers in Germany are required by law to prepare formal contracts of employment for employees. These contracts should include the various terms of employment (such as salary in the local Euro currency), termination rules, and any benefits.

When we hire employees and become their official Germany Employer of Record, we draft employees a temporary (fixed-term) contract. Note, indefinite or open-ended contracts are not legally permitted in Germany as part of EOR arrangements.

Usually, the fixed-term contract will be for up to 18 months: This is the legal limit under the Employee Leasing Act (Arbeitnehmerüberlassungsgesetz) in Germany. At that point, Horizons can support the company to hire under their own legal entity in Germany.

Fixed-term contracts

Working hours in Germany

Employees in Germany generally work Monday to Friday, and there is a maximum of eight-hours per day, and 48-hours per week. Overtime is legally limited to 12 hours per week.

National holidays in Germany

There are nine nationally followed public holidays in Germany, which most employees receive off work:

In addition to these nine days, there are several regional holidays which may or may not be expected in your location, such as Three King’s Day and Corpus Christi.

Holiday Schedule in Germany[2024]

Several national public holidays are followed throughout Germany. Only Labor Day is mandatory, but almost most employees receive several other days as holidays:

Date	Holiday name
1 Jan Monday	New Year’s Day
29 Mar Friday	Good Friday
1 Apr Monday	Easter Monday
1 May Wednesday	May Day
9 May Thursday	Ascension Day
2o May Monday	Whit Monday
3 Oct Thursday	Day of German Unity
25 Dec Wednesday	Christmas Day
26 Dec Thursday	Boxing Day

Employment benefits in Germany

It’s vital that you know what benefits your employees in Germany are legally entitled to or can be expected. We set out some of the key benefits below.

Vacation leave in Germany

In Germany, any employee working five-day weeks is allowed 20 days of annual leave, and anyone working six-day weeks is entitled to 24 days. However, the majority of employers offer between 25 and 30 days of annual leave as standard. Also, many employers offer an end-of-year bonus, although this is not required by law.

Social benefits in Germany

Employers and employees in Germany must both pay equally towards a social security system, which covers things like pension, healthcare coverage, unemployment insurance, and so on. Also, accident insurance is required but must be covered exclusively by employers. For an employer, the total contributions to mandatory social benefits will generally be an additional 20% of each employee’s salary.

In addition to these mandatory benefits, many employers offer other perks such as a housing payment, more comprehensive private health insurance, and more.

Sick leave in Germany

In Germany, employees are entitled to a minimum of six weeks of sick leave with full pay if they can provide a doctor’s note. After this period, employees will be paid through their health insurance at a rate of 70% or more.

Notice periods in Germany

The process of terminating employees can be complicated in Germany. A standard dismissal requires the employer to follow the mandatory notice period, which varies based on how long the employee has been with the organization:

*Notice periods effective from the end of the month unless otherwise stated

Probationary period (up to six months) = Two weeks
After probation but less than two years = Four weeks (effective from the end of or the 15th day of the month)
Over two years = One month
Over five years = Two months
Over eight years = Three months
Over ten years = Four months
Over 12 years = Five months
Over 15 years = Six months
Over 20 years = Seven months

It’s not uncommon for these periods to be longer, and should be stipulated in an employment contract. Also, full salary needs to be provided throughout the notice period. Payments in place of providing a notice period are not common in Germany.

Employee severance and terminations in Germany

Expert Insights from

Tom Kussmann, COO (Berlin Office)

In Germany, employees benefit from substantial protections, making the process of termination post-probation quite complex. Our dedicated team, based in Berlin, is experienced in local employment laws and stands ready to guide you.

Navigating employee terminations and handling severance packages can be complicated for companies expanding overseas for the first time as German labor law is well protective its employees.

In practice, termination scenarios differentiate whether the employee has a permanent or temporary employment contract.

Once the employee has passed the 6 month employment mark, they are protected by the termination protection act (Kündigungsschutzgesetz), meaning that they are indeed entitled to a severance payment, should the permanent employment relationship be terminated by the employer.

The calculation for the statutory severance payment = gross monthly salary * 0,5 * years of service.

In order to calculate years of service, you round up or round down to the nearest year.

There is no entitlement to a termination bonus, although the employee may claim they are entitled to commission, if this is included in the Annex of their employment contract. Any bonus/commission is paid at the discretion of the employer.

However, should the employment relationship be ending because the employee has a temporary contract, there is no entitlement to a severance payment or termination bonus when the sole reason for the termination of employment is due to the expiration of the employment contract. The temporary contract is something which the employee agreed to before beginning the employment.

In addition, if the employment contract is being terminated by the employer before the expiration of the employment contract, the employee would be entitled to a severance payment.

On a separate note, any accrued but untaken holidays will need to be paid out upon expiration/termination of the employment contract.

Tax laws in Germany

Income tax in Germany is progressive, and ranges from 0% to 45% based on income level. The corporate tax rate is 15%, but additional charges such as a solidarity surcharge and trade tax make the total level of contribution around 30%.

Horizons’ Germany Employer of Record solutions can provide assistance to your business as you navigate the complicated ta laws in the country.

Health insurance in Germany

Germany has a socialized healthcare system, and all residents are entitled to free necessary care. However, employees earning above a certain income (and their employers) must also contribute to a social security fund.

hassle-free Germany compensation & benefits

Compensation & Benefits

Compensation laws in Germany

The German minimum wage is €12 per hour as of 2024. This is likely to increase slightly year on year. Overtime pay must be laid out in an employment contract.

Benefit management in Germany

It can be difficult to understand and set up employee benefits in Germany, and it can require a lot of time, effort, and investment on the part of employers. However, it is crucial that you adhere to compensation and benefits laws as you can be subject to large fines and legal issues if you fail to.

Outsourcing your benefits management process ensures that you fully understand and adhere to the rules, ensuring your compliance and speeding up the process significantly. At Horizons, our Germany EOR has employment experts who will help you to find and arrange your benefits, advise on your strategy, and ensure compliance with the law.

How it works & what to keep in mind

Maternity Leave in Germany

How it works

German labor law is highly protective. As a result, the employer is required to continue paying the average salary of the last 13 weeks (known as maternity pay).

As an employer, you are obliged to provide continued payment during maternity leave, including any special payments such as Christmas bonuses.

Maternity leave periods

The protection period (‘time-off’) for pregnant women begins 6 weeks before the estimated due date and typically ends 8 weeks after giving birth. For this period, the employee is eligible for maternity payments.

◦ During the protection period before birth, the employe may only continue her work if she explicitly agrees to it. The employee can revoke her consent at any time.

◦ During the 8-week protection period after birth, she cannot be working under any circumstances, even if she wishes to do so.

◦ In the case of multiple births, the protection period after delivery is 12 weeks. In the case of premature births, maternity protection is generally extended to 12 weeks. Additionally, the maternity leave period is further extended by the time missed before birth. Whether a premature birth is present is determined by a medical certificate.

◦ Furthermore, there is a 12-week protection period after birth for mothers who have given birth to a disabled child.

Who's paying?

The employer is required to keep paying out the salary to the employee within paternity leave period of 14 weeks,

Nevertheless, the salary payment is fully covered by the health insurance provider of the employee and will be automatically reimbursed to the company along with the monthly payroll declaration. Therefore, the company does not have to bear any financial risks when an employee goes off for paternity leave.

Dismissal protection

Pregnant employees are protected from termination to a special extent during the duration of pregnancy and for a period of 4 months after childbirth, including during parental leave.

Germany Employer Of Record Peo

Navigation

EOR in Germany

Employment Laws

Employment benefits in Germany

Compensation & Benefits

Maternity Leave in Germany

Frequently asked questions

Hire borderless talent with Horizons

Hire in Germany in 24h without your own local entity.

With Horizons, you get quick service, transparent pricing, and expert support.

Frequently asked questions

Does Horizons operate under a labour-leasing license (Arbeitnehmerüberlassung (AÜG))?

We confirm that Horizons is fully licensed under the German Federal Ministry of Labor in Kiel:

New Horizons Global Partners Germany GmbH
Skalitzer Strasse 85/86, 10997 Berlin
AÜG License No.: 90101/191021/5539

Can Horizons employ beyond the 18 month deployment limit in Germany?

At Horizons, we operate under a labour-leasing license (German = Arbeitnehmerüberlassung (AÜG)), which is seen as a temporary employment solution by the German authorities. When we hire employees and become their Employer of Record, we can offer the employees a temporary or a permanent employment contract. However, due to our AÜG license, we can only deploy the employee to the same end-client for a maximum of 18 continuous months. So, although the employee can essentially have a permanent contract with Horizons, they can only be deployed to the end-client for a maximum period of 18 months.

Important: Note that employing is a federal offence and punishable by German law. As we have seen other EORs in the market setting up multiple entities to find workarounds for the 18-month limit, we can only strongly recommend to stay away.

What are the options once the 18 month deployment limit has been reached?

Once the 18 month deployment limit has been reached, there are a number of options to continue the deployment of the staff via Employer of Record:

(i) The preferred solution is that, in the meantime, an entity has been incorporated in Germany, e.g. GmbH, and can hire the employee directly under their entity (Horizons can assist with this set-up process);

(ii) The employee signs a termination agreement ceasing their employment with Horizons and takes a mandatory “cool-off” period of 3 months plus 1 day before being re-hired by Horizons and re-deployed to the end-client. Please note that simply switching Employer of Record, e.g. Horizons to another EOR provider, is not a legal option. The deployment to the end-client can only have a maximum duration of 18 continuous months, regardless of who the Employer of Record is.

What is the difference between a Germany PEO and a Germany EOR?

Generally speaking, the terms “Germany PEO” and “Germany EOR” are used interchangeably.

Can an EOR in Germany hire both local and foreign nationals to work in Germany?

An EOR in Germany can feasibly hire both local and foreign nationals to work in Germany.

However, the ability of Horizons to sponsor your foreign national employee in Germany may be limited due to visa quotas practiced in many countries.

Contact us with your requirements and our Global Mobility team with review the case and get back to you within 2 business days.

How long does Horizons' Germany EOR service take to hire an employee?

In most cases, Horizons’ Germany PEO can hire & onboard your employee within 24 hours. The actual start date of the employee will depend on their notice period obligation to their previous employer as well as any relevant hiring rules in Germany.

Is it possible to get a work visa in Germany?

It is possible to get a work visa in Germany. Horizons’ Global Mobility team is a dedicated team of work visa experts. They assess the details of each case to determine feasibility and costs before Horizons applies for the work visa on behalf of your employee. If the Global Mobility team determines that your case is feasible, the process is smooth and transparent. Visa spots in Germany are limited, however—get started today to secure your employees’ visa spot.

Do you have a physical office in Germany?

Of course we do! Our office is located in the heart of Kreuzberg district in Berlin at Skalitzer Strasse 85. Feel free to stop by and meet with our team. For (future) EOR employees, we’d always recommend you to stop by and meet face to face. Our team will be happy to run you through the process of how the employment setup works.

Any questions, you can contact our team in Berlin directly via +49 30 3119 9653.

Germany EOR & PEO

Start hiring in Germany

Simple, compliant hiring with Horizons EOR

EOR in Germany

Facts & Stats

EOR Platform

EOR Cost

Time-to-hire

Contracts

Local Benefits

185+ Countries

Our Presence in Germany

Employment Laws

AÜG Labor Leasing Licence in Germany

Employment Agreements in Germany

Fixed-term contracts

Probationary period

Termination notice period

Severance

Working hours in Germany

National holidays in Germany

Employment benefits in Germany

Vacation leave in Germany

Social benefits in Germany

Sick leave in Germany

Notice periods in Germany

Employee severance and terminations in Germany

Tax laws in Germany

Health insurance in Germany

hassle-free Germany compensation & benefits

Compensation & Benefits

Compensation laws in Germany

Benefit management in Germany

How it works & what to keep in mind

Maternity Leave in Germany

How it works

Maternity leave periods

Who's paying?

Dismissal protection

Hire in Germany in 24h without your own local entity.

Frequently asked questions

180+

100+

24x5

130+

180+

100+

24x5

130+

The Global Workforce Payment Platform

What to expect when you connect with Horizons