Without having to setup an entity in Germany to employ a team onsite, you can launch your business for a fraction of the cost.
Hire staff in days, not weeks or months to start your business in Germany onsite.
Add additional employees to your operations at ease or simply stop your in-country presence.
The social security system in Germany consists of four mandatory major pillars: Health insurance, pension & retirement insurance, unemployment insurance and nursing care insurance.
Health insurance coverage is mandatory in Germany. Choosing between the statutory public health insurance or a private health insurance provider largely depends on the employee’s salary as well as on the personal preference.
Both, governmental and private providers are fully comprehensive and cover all necessary impatient and outpatient treatments. Nonetheless, many Germans stay publicly insured even if they can could afford to be enrolled in a private medical insurance plan.
Additional voluntary private insurances for extra coverage would commonly not be subsidized by the employer as salary additions would be fully taxable. It is worth mentioning that when traveling throughout Europe, the employee is fully covered by the German health insurance.
Upon employment start, employees will be automatically enrolled into the statutory Rension and Retirement Insurance. Besides pension and retirement coverage, the insurance also covers survivor and disability benefits.
Upon employee’s request, an employer in Germany must provide a supplementary pension scheme.
Unemployment protection plays a major role in Germany’s society and social insurance system.
In case a person has been in an employment relationship for at least 12 months in Germany, the employee is entitled to receive full unemployment benefits to the amount of 60-70% of the previous average income from the Federal Employment Agency for 6 months. The duration of payments can be longer depending on the length of service.
Nursing care insurance provides monetary compensation or subsidizes the use of professional nursing services depending on the degree of care dependency.
As per German Labor Law, it is prohibited for pregnant women to work within the last six weeks of their pregnancy as well as within at least eight weeks after giving birth.
These periods might be longer with multiple or pre-mature births. While the female employee is off, her basic net salary will still be covered out which is covered partly paid by the employer and by the National Health Insurance pool.
In addition, both parents are eligible to go on parental leave for a maximum of 36 months. For the first 12 months of the parental leave, the employee is subject to receive additional financial support from the National Health Insurance pool.
The statutory Work Accident Insurance fully covers any potential costs arising for medical treatments of accidents taking place either on the way to work, at work and on the way back.
The premium is determined according to the employee’ respective risk classes calculated based on the industry and working location.
Universal Hires’ PEO employment agreement are tailored to meet the AUG requirements and available in both German and English language.
In practice, employment agreements need to detail: Parties involved, duration terms, probationary period, working location, job details, remuneration package, working hours, paid time off, applicable notice period, etc.
Income tax is solely paid by the employee and withhold by the employer from the employee’s payroll on a monthly basis.
The amount of income tax to be paid depends on the amount of income earned. Starting from an annual income of 9,000 euros, the applicable tax rate is 14 percent. The highest tax rate is set at 42 percent for annual incomes exceeding 54,950 euros. Since 2007, the so-called “wealth tax” of 45 percent has been applied to incomes from 260,533 euros and higher.
As an Employer of Record in Germany, it is important to be aware of the national holidays on whichbusinesses are typically closed.
Germany has nine official public holidays in that are celebrated nationally each year, in addition to regional holidays that are only celebrated in certain German federal states (Bundesländer). This means that some German states have more German holidays than others. Employees in Germany are entitled to one of the highest amount of holidays in Europe of up to 13 days of German public holidays a year.
It’s important to be aware of the national holidays in Germany as businesses are typically closed.
No, you do not need to setup an entity in form of a branch office or GmbH to hire staff in Germany. Through our Employer of Record & PEO solution, Universal Hires will hire and payroll German staff on your company’s behalf.
New employees can be onboarded within a matter of days.
Universal Hires will hire and payroll your staff in Germany in your behalf. In practice, this includes the labor contract preparation and employee registration with the authorities as well as the ongoing payroll management (salary, taxes, mandatory contributions, expenses, etc.).
Universal Hires offers tailor-made employment solutions in Germany. Please reach out to our team to receive further information. We will be happy to prepare a detailed quote for review.
Universal Hires’ German entity is licensed under the Arbeitnehmerüberlassungsgesetz (AÜG) by the Federal Employment Agency. We ensure that our staff is working compliantly under the German labor law.
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Friedrichsstrasse 34
10117 Berlin, Germany
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