Quick facts

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Germany, the largest economy in Europe, is known for its robust industrial base, strong export market, and advanced social welfare system. The country is a leader in sectors such as automotive, engineering, and technology. Germany offers a highly regulated labor market with strong protections for workers, including comprehensive social security and health insurance systems.

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Employment Contracts

In Germany, temporary contracts can last up to 18 months and must comply with local labor laws, ensuring equal treatment regarding salary, working conditions, and benefits. Employment contracts should be in writing and must outline key terms such as salary, working hours, and holidays.

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Probation Period

Employment contracts in Germany can include a probation period of up to 6 months. During this period, either party can terminate the contract with 2 weeks' notice without providing a specific reason.

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Working Hours

The standard working week in Germany is 8 hours per day, 6 days a week. Overtime may extend the working day to 10 hours, but the average working hours must not exceed 8 hours per day over a 6-month period.

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Vacation Days

Employees are entitled to a minimum of 20 days of annual leave based on a 5-day workweek. Most employees receive 28 to 32 days of leave. Any untaken leave must be used by December 31, though in certain cases, this can be extended until March 31 of the following year.

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Sick Leave

When an employee is ill, the employer must continue to pay their salary for up to 6 weeks. After this period, the employee receives support from their health insurance provider. Sick leave requires a medical certificate, which the employee must provide to the employer.

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Wages and Salary Payment

Salaries in Germany are typically paid on the 15th of the following month. The minimum wage in 2022 is €10.45 per hour. Employees on a work permit visa must earn a minimum annual salary of €56,800.

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Public Holidays

Public holidays in Germany vary by state, but there are 9 national public holidays, including:

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• January 1: New Year’s Day
• May 1: Labor Day
• October 3: German Unity Day

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Some states may observe up to 5 additional holidays.

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Employer Taxes

Employers contribute approximately 23% towards social security, which includes:

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• 9.35% for pensions
• 7.3% for statutory health insurance
• 1.5% for unemployment insurance
• 1.275% for long-term care insurance

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Employee Taxes

Employee tax rates in Germany are progressive, starting at 14% and going up to 45% depending on income. Social security contributions are shared between the employer and employee, covering health insurance, pensions, and unemployment insurance.

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Notice Period

The statutory notice period depends on the employee’s length of service:

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• 4 weeks for up to 2 years of service
• 1 month for 2-4 years of service
• 2 months for 5-7 years
• 3 months for 8-9 years
• Up to 7 months for over 20 years of service

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Termination and Severance Pay

Termination in Germany can be complex, requiring adherence to statutory notice periods. During probation, either party may terminate with 2 weeks' notice. After probation, notice periods range from 4 weeks to 7 months, depending on the employee's length of service. Severance pay is not mandated unless agreed upon in the contract or through collective agreements.