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EOR Germany
Employer of Record Germany
Our Employer of Record Germany service enables companies to hire employees in Germany without the need to establish a local legal entity. With ThisWorks you can onboard talent quickly and compliantly, so your business can grow your presence in Germany without delays, legal complexity or administrative burden.
- AÜG Licensed
- Onboard in Days
- Fixed Monthly Fee
Capital
Berlin
Official language
German
Remote workers
9.9M
Currency
€ Euro (EUR)
Working hours
36–40 hrs/week
Public holidays
9 days/year
Min. hourly wage
€13.90
Tax year
Jan 1 – Dec 31
Min. paid leave
20 days
Sources: Working Hours Act · Federal Minimum Wage · Probation & Notice Periods
What is an Employer of Record in Germany?
An Employer of Record (EOR) is a company that legally employs workers on behalf of another entity in the country where the employee resides.
In Germany this means the EOR becomes the official employer under German labour law, while your company continues to manage day-to-day responsibilities such as tasks, performance and integration in the team. In addition to being an official employer, the EOR takes care of monthly payroll, taxes and social security payments and compliance with German labour law.
This structure allows businesses to hire a suitable candidate in Germany without establishing a local legal entity — saving time, reducing administrative burden and eliminating legal risk associated with payroll in a new country.
You can read more about EORs in our detailed guide: What is an Employer of Record (EOR): 2026 Guide.
Why Use an EOR in Germany?
Germany remains one of Europe’s most important commercial and industrial hubs — home to 46 million workers and world-class expertise in engineering, IT and life sciences.
The biggest share of jobs (nearly 76%) sits in the service sector — healthcare, education, finance and business services. The country also leads globally in engineering, manufacturing and pharmaceuticals, supported by world-class technical universities and government investment in innovation.
However, Germany is also known for its complex employment laws and highly bureaucratic procedures. Focus on employee protection, challenging termination processes and complex payroll can be difficult to navigate without local expertise. That is where an Employer of Record delivers real value.
Faster Global Hiring
Setting up a GmbH takes months — notary fees, Handelsregister registration, Finanzamt sign-off. With an EOR you can hire in days without any of that.
Reduced Compliance Risk
German employment law is strict. An EOR ensures full adherence to the Minimum Wage Act, Working Hours Act and Protection Against Dismissal Act on your behalf.
Lower Expansion Costs
Skip notary fees, legal advisory, payroll setup and ongoing compliance overhead. EOR makes international expansion cost-efficient from day one.
Access to Global talent
Germany offers a highly skilled, specialised workforce. With an EOR you are not limited by geography or legal complexity when hiring.
scalable hiring model
Ideal for remote-first companies, startups entering the German market, or businesses with project-based or short-term hiring needs.
simplified HR management
The EOR handles all administrative tasks — payroll, tax compliance, employee benefits — so your internal team can focus on core business operations.
Hiring Employees in Germany: What You Need to Know
Hiring in Germany requires a clear understanding of local employment rules. Below is a breakdown of the core areas that affect international employers.
See our Germany hiring guide for a full overview.
Employment Contracts
- Job description & duties — must be specific; vague descriptions create legal ambiguity in terminations
- Working hours — 36–40 hrs/week; max 8 hrs/day (10 hrs with overtime compensation). Must comply with the Working Hours Act
- Probation period (Probezeit) — up to 6 months; 2-week notice during this period
- Notice period — minimum 4 weeks post-probation, starting the 15th or month-end
- Salary & benefits — gross salary, payment frequency, allowances
- Holiday entitlement — minimum 20 days/year (5-day week); most employers offer 25–30 days
Employment Protections
Notice periods must be delivered in writing — email or SMS are not legally valid. Post-probation minimum is 4 weeks, increasing with length of service.
Protection Against Dismissal Act (KSchG) applies after 6+ months of continuous employment. Dismissal must be justified by serious conduct reasons, incapacity, or operational requirements.
Employees can challenge terminations in labour courts, resulting in financial penalties and reinstatement claims. As the legal employer, ThisWorks manages the termination process on your behalf, ensuring full compliance.
Taxes & Social Security (2026)
Germany operates a comprehensive social security system. Employers are legally responsible for calculating, withholding and remitting payments. For foreign companies this is often the most complex aspect of hiring in Germany.
| Contribution | Total Rate | Employer Share | Employee Share | Notes |
|---|---|---|---|---|
| Health Insurance (Krankenversicherung) |
14.6% + add. fee | 7.3% + ½ add. fee | 7.3% + ½ add. fee | Private option above €6,450/month |
| Nursing Care Insurance (Pflegeversicherung) |
3.6% | 1.8% | 1.8% | Covers long-term care |
| Pension Insurance (Rentenversicherung) |
18.6% | 9.3% | 9.3% | Retirement, disability & survivor |
| Unemployment Insurance (Arbeitslosenversicherung) |
2.6% | 1.3% | 1.3% | Financial support on job loss |
Rates correct as of 2026. Source: German Federal Ministry of Labour and Social Affairs.
Employers also manage income tax withholding (Lohnsteuer) through payroll — calculating correct amounts by tax class, withholding from salary, submitting to the Finanzamt on time, and filing regular reports. By using an EOR in Germany you eliminate the risk of payroll errors, penalties and back payments.
How Our Germany EOR Service Works
Expanding your business to Germany doesn’t have to be complex. With our EOR service you can grow your team compliantly without setting up a local entity. Learn more about the team behind ThisWorks.
1
Finding the right employee
You identify your business needs and find the best candidate. We can also support you with recruiting and salary benchmarking services
2
Onboarding locally
We provide locally compliant employment contracts and handle all required registrations of the new employee in Germany.
3
Payroll management
We take care of salary payments, withholding tax and social security contributions, ensuring compliance with German labour law — including monthly payslips.
4
Benefits administration
We manage all statutory benefits and additional allowances in line with German law and any agreements between you and the employee.
5
Compliance & support
Our team ensures the process remains compliant, supporting you and the employee throughout the employment lifecycle — employment certificates, annual leave, local policy guidance and HR queries.
Hire with a German EOR today!
With ThisWorks, your business can easily hire employees in Germany with our EOR solution. If you have an entity, our Global Payroll solution takes care of payroll and compliance for your direct employees.
EOR vs Setting Up a Legal Entity in Germany
When expanding to Germany, the typical choice lies between opening a local legal entity or using an Employer of Record. Each approach has advantages — the right decision depends on your business stage and objectives.
| EOR (via ThisWorks) | Local Legal Entity | |
|---|---|---|
| Set-up time | ✓ A few days | Several weeks to several months |
| Upfront cost | ✓ Low, predictable monthly fee | High — notary, registration, share capital (min. €25,000 for GmbH) |
| Admin burden | ✓ Minimal — outsourced to ThisWorks | High — payroll, legal, admin managed in-house |
| Flexibility | ✓ Easy to scale up or down | Scale possible but constrained by fixed infrastructure |
| Control | Employment handled by EOR provider | ✓ Full control over contracts and processes |
| Compliance risk | ✓ Handled by experienced EOR team | Full liability — your company owns compliance |
| Best suited for | Market testing, smaller teams, fast entry | Long-term, large-scale operations |
In many cases companies start with an EOR to enter the German market quickly and transition to a local entity once the market is proven. If you are considering entity setup in Germany, learn how we can help with that process too.
Cost of Using an Employer of Record in Germany
The cost of using an EOR in Germany varies depending on several factors, but is generally more cost-effective than setting up a local legal entity — especially for individual hires, smaller teams or market entry.
Percentage of Salary
Some providers charge based on a percentage of each employee’s salary. This model scales with compensation and can become significantly more expensive as salaries grow.
Fixed monthly fee per employee
Predictable pricing that allows you to plan your expansion without unexpected costs. Our fixed monthly fee covers all employment, payroll, and compliance management.
Why Choose ThisWorks for EOR in Germany?
We are an established EOR provider in Germany with a proven track record and an indefinite AÜG licence.
Reliable
We hold an indefinite AÜG licence, granted after multiple successful audits by German authorities. Our processes fully comply with German labour law.
Fast
New onboardings completed within a few days once all required information is provided — no entity setup delays.
Secure
Our service is backed by experienced professionals specialising in German labour law and HR compliance.
Transparent pricing
Germany offers a highly skilled, specialised workforce. With an EOR you are not limited by geography or legal complexity when hiring.
Local Expertise
Ideal for remote-first companies, startups entering the German market, or businesses with project-based or short-term hiring needs.
Dedicated support
A named point of contact for you and your employee throughout the employment lifecycle.
Germany EOR FAQs
What is an employer of record in Germany?
An Employer of Record (EOR) is a third-party provider that legally employs workers on your behalf in Germany, while you manage their day-to-day activities. The EOR handles contracts, payroll, taxes and compliance.
Is EOR legal in Germany?
Yes. Provided the EOR provider complies with local labour laws, EOR services are legal and common in Germany. They are regulated under the German Employee Leasing Act (Arbeitnehmerüberlassungsgesetz or AÜG), which requires EOR providers to hold a valid AÜG licence.
How long does it take to hire through an EOR?
Hiring through an EOR can typically be completed within a few days once all required information is provided — compared to weeks or months when setting up a local entity.
Can I hire contractors in Germany instead of employees?
While possible, Germany has strict rules on hiring independent contractors. Misclassification — where German authorities deem a contractor to be a de facto employee — can lead to significant financial and legal liabilities. An EOR provides a safer alternative for long-term or ongoing roles.
What are employer social security contributions in Germany?
Employers must contribute to health insurance (~7.3%), nursing care insurance (1.8%), pension insurance (9.3%) and unemployment insurance (1.3%) — a total employer burden of approximately 20–25% on top of gross salary. Employers also manage income tax withholding (Lohnsteuer) through payroll.
Do I need a German entity to hire there?
No. An EOR allows you to hire employees in Germany without establishing a local legal entity. This is precisely the value of the EOR model — fast, compliant market entry without the cost and complexity of entity setup.
Ready to hire with a German EOR?
Hiring employees in Germany doesn’t have to be complex or time-consuming. With ThisWorks you gain access to a team of experienced specialists who handle employment, payroll and HR compliance — so you can focus on growing your business.
Alana Peters
Germany EOR Consultant
“German employment law is structured and evolves continuously, which makes compliance a real challenge for international employers. Our role is to remove that complexity so companies can hire in Germany with clarity, speed and compliance from day one.”
