GLOBAL EMPLOYER OF RECORD IN 190+ countries

Employer of Record in Germany

Move on critical hires in Germany while the business case for a permanent entity is still developing. Acumen acts as your Employer of Record, giving you the flexibility to build headcount now and take on the cost and commitment of incorporation only when it makes commercial sense.

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Employer of Record in Germany: German employment without a GmbH

With an Employer of Record, your German team is employed by Acumen International on German contracts, with wage tax and social insurance running through its German payroll. The employees work on your projects and take day-to-day direction from your managers, while Acumen International holds the employer’s legal obligations.

Three ways to employ in Germany

What the Employer of Record model gives you

• No notary and no share capital up front. You can hire before deciding whether Germany justifies a GmbH.
• Complete German payroll from the first month. Wage tax is withheld at source and social insurance paid, so employees receive the net pay German candidates expect.
• Visa routes run by the employer. Acumen International handles EU Blue Card and skilled worker applications, including the fast-track procedure.
• Works council steps planned in. Where your German operation has a works council, hearings and consultations are built into hiring, changes and exits.
• A planned move to your own entity. When the GmbH is registered, employees transfer with their service and residence permits intact, timed around the AÜG assignment limits.

Who does what

The legal footing: the AÜG framework

In Germany, an Employer of Record arrangement that places an employee at a client company is regulated as labour leasing (Arbeitnehmerüberlassung) under the Temporary Employment Act (AÜG). Four rules apply:

How Employer of Record works in Germany: the AÜG framework

In Germany, standard Employer of Record (EOR) arrangements for placing personnel at a client company are strictly regulated as labor leasing (Arbeitnehmerüberlassung) under the German Temporary Employment Act (AÜG). Operating compliantly requires adhering to statutory licensing, duration caps, and equal treatment mandates:

• AÜG Licensing: All labor leasing must be executed under an official license issued by the Federal Employment Agency (Bundesagentur für Arbeit).
• Assignment Duration Limits: Placements with the same client are legally capped at 18 months by default, though industry-specific collective agreements (Tarifverträge) can modify or extend this limit.
• Equal Treatment Mandate: Leased employees are legally entitled to receive the same essential working conditions and remuneration as comparable permanent staff at the host company.
• Mandatory Contract Disclosure: The employment contract between the provider and the client must explicitly designate the arrangement as labor leasing (Arbeitnehmerüberlassung).

The Operating Split

Acumen International acts as the official legal employer, holding the German employment contract, processing local payroll, and remitting social security contributions, while your local managers retain full operational control and direct the day-to-day work.

Employment in Germany at a glance

Last reviewed October 2026.

Works councils and co-determination in Germany

German employees can elect a works council (Betriebsrat) in any business with five or more permanent staff, and where one exists it shapes many everyday employment decisions.

• Co-determination: the works council has a say on working time, pay structures, holiday planning and tools that monitor performance.
• Hiring at the client: where your German operation has a works council, it is consulted before supplied employees start working there.
• Dismissals: the works council must be heard before every dismissal; a dismissal made without that hearing is invalid.
• Voting rights: supplied employees who work at a client for more than three months can vote in its works council elections.

Employment contracts, probation and working time in Germany

• Written terms: every employee receives a statement of the essential terms of employment, as the Evidence Act (Nachweisgesetz) requires.
• Fixed-term contracts: allowed for up to 2 years without a specific reason, with up to three extensions in that period; longer terms need an objective reason.
• Probation: up to 6 months, during which either side can end the contract with 2 weeks’ notice.
• Working time: up to 8 hours a day, or 10 where the average over six months stays at 8, with at least 11 hours’ rest between working days. Employers must record working time.
• Collective agreements: sector agreements (Tarifverträge) set pay and terms where the employer is bound or the contract refers to them.
• Post-employment non-compete: binding only for up to 2 years and only if the employer pays at least half of the employee’s last remuneration for its duration.

Notice periods, dismissal protection and severance in Germany

The basic notice period is 4 weeks to the 15th or the end of a calendar month. The employer’s notice grows with length of service:

• Dismissal protection: after 6 months’ service in businesses with more than 10 employees, a dismissal needs a reason related to the person, their conduct or operational needs, with a fair selection where roles are cut.
• Form and deadlines: dismissals must be in writing, and an employee has 3 weeks to challenge one in the labour court.
• Special protection: pregnant employees, severely disabled employees and works council members have additional safeguards.
• Severance: there is no general statutory right, but where a dismissal for operational reasons offers it, the benchmark is half a month’s pay for each year of service.

Employment risk mitigation in Germany with Acumen International

Hiring international talent in Germany: EU Blue Card and skilled worker visas

Germany’s skilled immigration rules give employers several routes for professionals from outside the EU. Salary thresholds are set as a share of the pension contribution ceiling, which is €101,400 a year in 2026.

Most routes need approval from the Federal Employment Agency, which must respond within two weeks. Under the fast-track procedure for skilled workers, the employer pays a €411 fee and the visa process usually takes around six weeks, with the employee’s spouse and children included if they follow within six months.

Cost of employing in Germany: social insurance and income tax

Social insurance in Germany is shared roughly equally between employer and employee, up to annual ceilings.

Income tax is withheld monthly through payroll on a progressive scale from 14% to 45%, with a tax-free allowance of €12,348 in 2026. A solidarity surcharge applies only to high incomes, and church tax applies to registered church members.

The Global Payroll Calculator draws on Acumen International’s research into more than 1,500 official government sources, validated by local lawyers, compliance specialists and accountants.

Specialist hiring in Germany’s investment sectors

Germany has set aside around €500 billion for infrastructure and climate investment through 2037, and expects up to €40 billion of semiconductor investment by 2030, centred on the Silicon Saxony cluster around Dresden.

Why companies hire in Germany with Acumen International

• Test the German market first. Build a first team and prove demand before committing to a GmbH.
• Convert freelancers with confidence. Move long-term contractors onto German employment and close the question of bogus self-employment.
• Switch provider without a break. Transfer employees from another Employer of Record or your own entity while service and benefits continue.
• Keep teams stable through change. Employ acquired or carved-out staff while the long-term structure is decided.
• Bring in talent from abroad. Combine employment and the EU Blue Card or skilled worker visa under one provider.
• Know the cost before you commit. Costing and the legal route are scoped before the hire, from Acumen International’s own payroll data.
• Offer packages that win candidates. Add company pensions, private health cover, bonuses and equity plans to the statutory minimum.

Employee benefits and payroll in Germany

German employee benefits packages are judged on more than salary. Common additions are a company pension, a 13th-month or Christmas bonus, a public transport ticket, a company car, private health cover and equity plans for senior roles. Where an employee converts salary into a company pension, the employer adds 15% of the social insurance it saves.

Payroll. Salaries are paid monthly. Each month, Acumen International files the wage tax return, pays social insurance contributions to the employee’s health insurance fund and issues a payslip; at year end it issues the annual wage tax statement.

Annual leave and statutory leave in Germany

Sources

• Minimum wage rises to €13.90
• Contribution assessment ceilings 2026
• What changes in the new year
• Statutory health insurance contributions
• Financing of long-term care insurance
• Temporary agency work: questions and answers
• Dismissal protection
• Working time rules
• Civil Code, section 622: notice periods
• Federal Leave Act
• Continued Remuneration Act
• Possibilities of skilled worker immigration 2026
• Parental leave and parental allowance
• Germany funds long-term infrastructure investment
• Semiconductor industry in Germany