PEO & Employer of Record (EOR) in Germany
Expand Your Business With Our Germany PEO
GlobalPEO delivers a top tier employer of record service for clients that are looking to recruit, hire, and operate payroll services without first setting up their own subsidiary in Germany.
How it Works: Our Germany PEO & Employer of Record (EOR) hires your candidate while abiding by local labor laws and cultural customs. The newly hired employee will communicate directly with your company and perform all job functions as if they were your own employee. We act as your in-country HR department and handle the entire onboarding, payroll, and benefits process in strict accordance to Germany’s regulations.
Why Choose our Germany PEO?
Without needing to setup a local entity in Germany, companies save thousands when expanding with GlobalPEO. From $400 USD.
Scale and onboard your workforce in days, not months by using our local entities and experts in Germany.
Minimize risk by ensuring your company is compliant with local laws and cultural customs and protecting your business from potential fines and legal fees.
Streamlined process for managing your payroll, benefits, and HR responsibilities with full flexibility to make changes at any time.
Germany PEO & Employer of Record
Hire, onboard, and manage employees in Germany quickly and easily with GlobalPEO. Working with our Germany PEO and Employer of Record solution eliminates the headaches that come with establishing a foreign legal entity and guarantees full compliance with local regulations.
Local Employer of Record
Your employees based in Germany will sign a local employment contract with GlobalPEO's in-country entity. Labor contracts are available in English and German, with employee payments processed in the local Euro currency. As the local Employer of Record, GlobalPEO operates with full compliance to the laws and regulations of Germany's Bureau of Labor.
Payroll Processing
GlobalPEO's complete payroll processing includes:
- New employee setup
- Social Insurance contributions
- Individual income tax declaration
- Expenses declaration
- Payslip provision
- Dedicated payroll officer
- Support for standard employment documents
Employee Onboarding
After officially hiring your local candidate, our Germany HR team will schedule an onboarding conference call with both the candidate and client. The onboarding process typically takes between 3-5 days.
Legal Liability Coverage
Our PEO solution covers the following functions to take legal liability as the local employer of record:
- Obligatory social and pension insurance enrollment.
-Employee income tax withholding
- Liabilities of early-termination, including severance calculation and mediation.
- Onsite health and safety liability coverage, which is shared with the client
Termination Guidelines
In the event a client decides to pause or end their presence in Germany when employing staff through our PEO and Employer of Records service, there are no termination fees to be paid as long as the client adheres to the 60 day termination-notice period.
#1 - Fast Facts For Hiring in Germany
One Of The Most Difficult Places To Open A Business
Germany ranks 114th on the worldwide rankings on the ease of opening a business in their country. It can take upwards of 6 months to successfully open a business after accounting for all of the strict rules, regulations, and customs.
Complex Tax Regulations
In order to begin running your operations and hiring in Germany, there are two sets of tax registrations that are required to be completed before opening.
New Licensing Agreement - AUG
PEO companies hiring on the behalf of foreign businesses are required to have completed the AUG licensing process in order to operate in Germany with full compliance. GlobalPEO has a team of licensed experts in-country to make sure all of the complex German rules and regulations are being executed on the client's behalf.
#2 - Working Hours in Germany
The standard workweek in Germany runs between 35-40 hours per week. An employee may not work more than 48 hours in a single week according to German law.
#3 - Germany: Employment Contracts
Employment contracts in Germany must clearly state the employees’ responsibilities, compensation details, benefits, grievance procedures, and requirements for termination. All offer letters, compensation details, and any document where income is discussed should be stated in Euros.
GlobalPEO includes all these services along with everything else in the jurisdiction of international expansion in Germany through our Employer of Record service.
#4 - German Holidays
#5 - Bonus Payments in Germany
#6 - Germany: Employment Benefits
Below is a breakdown of the German Social Security System:
There are 5 components of the German system: health insurance, unemployment insurance, pension insurance, nursing care insurance, and accident insurance. Employers and employees split the contributions to the employee’s social security fund. Employers should plan for an additional 20% – 25% to contribute in addition to the employee’s salary.
Germany does have a limit on social security contributions, which range from 5,800 € to 6,500 € per month for statutory pension and unemployment insurance. Also, some companies choose to offer a housing subsidy to help with rent, along with a child subsidy that exists to help employees with the high costs of raising children.
#7 - Sick Leave in Germany
#8 - Maternity Leave in Germany
#9 - Termination & Severance in Germany
The process of terminating employees working in Germany can be highly complicated.
Below are the statutory minimum notice requirements based on how long an employee has been working for your company:
(Please note that a more mutually beneficial notice arrangement can be agreed upon in the initial employment contract)
0-2 years of service with a probationary period – 2 week’s notice.
2+ years of service – 1 month’s notice.
5+ years of service – 2 month’s notice.
8+ years of service – 3 month’s notice.
10+ years of service – 4 month’s notice.
12+ years of service – 5 month’s notice.
15+ years of service – 6 month’s notice.
20+ years of service – 7 month’s notice .
If there is a “termination for cause,” then an employee may be dismissed immediately. However, proving cause can be challenging as the German government often sides with the employee in the case of a dispute.
#10 - German Tax Laws
Germany currently ranks 114th in the worldwide rankings for ease of opening a new business. If opening a business or subsidiary of your own, we suggest hiring a local tax advisor to assist with the complicated tax filing laws and registering your company with full compliance to German Law.
This is where working with GlobalPEO can take so much of the hassle of operating in Germany off of your hand. Our German PEO and Employer of Record services will allow you to easily hire and have new employees’ onboarded in a matter of days.
Why Choose GlobalPEO?
Global expansion is a great step for your business – and now it’s easier than ever. Setting up your own entity in each country where you wish to operate can be expensive, complicated, and requires deep knowledge of the specific rules and regulations. Let GlobalPEO take care of everything. From International PEO & EOR, Global Payroll and International Recruiting we deliver our exceptional services at an affordable price.