Hire & Pay Employees in Germany
With PamGro, your business can easily hire employees in Germany. No more worrying about local laws, complex tax systems, or managing international payroll.
Overview
Traverse the Germany Recruitment Market with ease.
When expanding your business to a new country such as Germany, it is essential to take into account both cultural nuances and employment laws. While the employment regulations in Germany may seem complex, they do share similarities with those of other European Union countries.
Germany boasts the largest economy in all of Europe. Additionally, it ranks as the fourth-largest economy in terms of nominal GDP and the fifth-largest in terms of PPP(Purchasing Power Parity). Over the years, Germany has established itself as a leader in various industries, experiencing continuous growth. Furthermore, it possesses the largest domestic market within the European Union.
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Benefits of hiring in Germany
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Challenges when expanding into Germany
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Cultural Nuances
Employment Contracts in Germany
Minimum Wages & Salaries
- The minimum wage in Germany is 12 EUR per hour.
Probation period
The probationary period for employment typically lasts for a maximum of 6 months and may differ from one company to another. This applies to both permanent and fixed-term work contracts.
Notice Period
The notice period’s duration varies depending on an individual’s length of service with the company. Employees with less than 2 years of tenure are required to give a standard notice period of 4 weeks. Those who have served between 2 to 4 years typically have a notice period of 1 month.
Individuals with 5 to 7 years of employment have a notice period of 2 months. As the length of service increases, the notice period also increases. Employees with 8-9 years of service have a notice period of 3 months, 10-11 years have 4 months, 12-14 years have 5 months, and those with 15-19 years of dedicated service have a notice period of 6 months.
Termination Requirements
- Mutual consent between the employer and employee allows for termination of employment contracts without any penalty.
- Indefinite contracts are more challenging to terminate as they require valid grounds and justification, which can be contested by the employee in labor court.
- Short-term and fixed-term contracts only necessitate proper notice and do not require reasons or justification for termination.
- The length of service determines the duration of the notice period.
- An employer has the right to terminate an employment agreement without notice in certain circumstances.
- Severe violation of the employee’s basic duties by the employee can lead to termination without notice.
- If the employee commits an offense that renders them unfit for the job, termination without notice is possible if the offense is evident or has been confirmed by a final court sentence.
- If the employee loses a necessary license for the job position due to their own fault, termination without notice is permitted.
- In case of illness, an employer can terminate the employment agreement without notice if the employee is unable to work.
- If an employee has a justifiable absence from work for reasons other than those mentioned above, lasting for more than 1 month, termination without notice is allowed.
Severance Pay
Severance pay is not governed by any statutory laws. Nevertheless, if an employee is terminated without notice, the employer is obligated to provide severance pay.
Quickstart Guide To Hiring in Germany
- Working Hours
- Leave Policy
- Statutory time off
- Onboarding Time
- Anti-discrimination Laws
General
The typical working hours in Poland are from 8am to 4pm on weekdays and from 8am to 2pm on Saturdays. It is common for most Polish workers to not take a lunch break during the day. It is important to note that the working time in Poland should not exceed 8 hours per day and an average of 40 hours per week, spread across five working days.
Overtime
- Any hours worked beyond 8 hours a day and 40 hours a week are considered overtime.
- According to the Polish Labor Law, individuals are prohibited from working more than 8 extra hours per week and a maximum of 150 overtime hours per year.
Overtime work is compensated with premium pay.
- Working overtime at night, on Sundays, and on public holidays that are not typically working days for the employee, as well as on a day-off granted in exchange for work on a Sunday or holiday, is rewarded with 200% of the salary.
- Working overtime on any other day is rewarded with 150% of the salary.
Working Week
Monday-Friday
Maternity Leave
Maternity leave no longer exists in Australia, it is just paid and unpaid parental leave that covers everything
Parental Leave
- Employees may receive Parental Leave Pay (PLP) from the Australian Government and paid parental leave from their employer. Those who receive both are still entitled to unpaid parental leave.
- Eligible employees receive 18 weeks’ PLP at the National Minimum Wage to care for a newborn or newly adopted child. Recipients may take PLP for a single set period and one flexible period, as of July 1, 2020.
- The initial, set period is 12 weeks and must last for one uninterrupted period within the first 12 months of the child’s birth or adoption. The second, flexible period entitles parents to 30 days’ PLP as negotiated between the employee and their employer. It must take place within the first 24 months of the child’s birth or adoption.
- Fathers and partners (including same-sex couples) receive two weeks’ paid leave from the Australian Government at the National Minimum Wage.
Sick Leave
Employees are entitled to sick and care leave in Australia. This is also referred to as personal/carer’s leave. Full and part time employees receive at least 10 days of paid annual sick and care leave, to use if unable to work due to illness or to care for an immediate family member who is ill. Unused leave is carried over to the next year.
Employees can take any accumulated sick or care leave. Employees are paid at their base rate on days they are on personal/carer’s leave. Employees also receive two days unpaid leave to care for an immediate family or household member.
Employees are not permitted to take unpaid care leave when they have available paid personal/carer’s leave.
Paid Time Off
Both full-time and part-time employees are entitled to 20 days of paid time off (PTO) a year. PTO accrues monthly 1.67 days per month. Employees are eligible for annual leave after they have accused enough leave to take.
Public Holidays
Australia celebrates 7 national and several regional holidays based on the location of the employee. National public holidays include:
- New Year’s Day
- Australia Day
- Good Friday
- Easter Monday
- Anzac Day
- Christmas Day
- Boxing Day
Onboarding
There’s no one-size-fits-all approach to onboarding a new employee in Poland. It’s best to tailor the onboarding experience to your company’s culture and goals. Make sure to schedule the necessary onboarding training well ahead of the employee’s first day, familiarize them with the business environment through culture training modules and videos, and make sure the onboarding process is seamless.
At PamGro, we understand that every employee is unique. That’s why we offer flexible global employment solutions backed by experienced HR and legal teams who are committed to helping businesses build international teams seamlessly.
Anti-discrimination Laws
In Poland, employers are prohibited from discriminating based on age, sex, race, religion, disability, trade union membership, nationality, political beliefs, ethnic origin, or sexual orientation. Compliance with these laws begins during the recruitment process, so it is important to avoid asking about protected characteristics during interviews or casual conversations.
Competitive Benefits Package in Germany
PamGro allows you to provide localized benefits for employees in Germany within minutes. All in one manageable online dashboard.
Health Insurance
Vision Insurance
Pension or 401(K)
Dental Insurance
Life and Disability Insurance
Payroll in Germany
Payroll Cycle
Employees are paid weekly, bi-monthly, or monthly.
There are no legal requirements to when an employee needs to be paid by, however, it is common to pay employees by the following schedule:
- Monthly – By the 28th to the 30th of the month
- Bi-weekly – Every second week on any agreed day (usually Wednesday or Thursday)
- Bi-monthly – Every 15th and 30th
Overtime Pay:
On a general note, for overtime on weekdays, the pay is 1.5 times the regular pay for the first 3 hours of overtime and, after that, twice the regular pay. On Sundays, the payment is twice the rate of regular pay. These vary depending on the industries and states.
Taxes in Germany
Employer Payroll Tax
From 1 April 2015 onwards, the employer is responsible for paying a total contribution ranging from 19.21% to 22.41% of the employee’s gross salary. This contribution rate includes an element of accident insurance, which varies based on the number of insured employees and the business sector. On the other hand, the employee’s contribution rate is 13.71% of their gross salary.
Both the employer and employee can deduct the social security shares from their respective Personal Income Tax (PIT) settlements. It is important to note that certain rates mentioned above are applicable to salaries below the cap of PLN 157,770 in 2021. This cap is subject to annual changes. Once the salary exceeds this cap, the contribution rate increases to 3.22% to 6.41% for the employer and 2.45% for the employee.
| Taxable income | Tax(AUD) | Tax % on Excess |
| 0 – 18,200 | – | 0% |
| 18,200 – 45,000 | – | 19% |
| 45,000 – 120,000 | 5,092 | 32.5% |
| 120,000 – 180,000 | 29,467 | 37% |
| 180,000 – onward | 51,667 | 45% |
*Employee Income Tax Table
VisaVisa and Immigration
Foreign nationals looking to work in Australia need to apply for a visa. Application is taken in through the various immigration programs administered by the Department of Home Affairs (DHA) of Australia.
The Temporary Skills Short visa (subclass 482) can be utilized by businesses to meet skill shortages by hiring foreign nationals to live and work in Australia for 2 years – or up to 4 years in some circumstances – where a suitably skilled Australian cannot be engaged.
Calculate the payroll of an employee in Australia?
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