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Last updated at June 16, 2022
A beautiful view of Germany


Euro (EUR)



Time Zone


Key Country Facts


Germany, officially the Federal Republic of Germany, is one of Europe’s largest countries. With over 83 million inhabitants it is the most populous country in the European Union (EU). Known for its highly skilled workforce and high levels of innovation, the German economy is the world’s fourth largest by GDP.


Germany lies between the Baltic and North Seas to the north and the Alps to the south. It has international land borders with 9 other countries.


Germany’s climate is moderate and has generally no extreme or longer periods of cold or hot weather. Coastal areas and Northern Germany have a maritime influenced climate, typically warm summers and mild cloudy winters. Further inland, the climate is continental, marked by greater seasonal variations in temperature, with warmer summers and colder winters.


Germany is known for its long and rich cultural history. It has had significant influence on European art, music and intellect throughout history. While German exerts its influence on each of the countries that border it; all of these cultures have, in varying degrees, had a hand in shaping today’s Germany.


Latest census records Christianity as the largest religion in Germany with just over 50% of Germans identifying themselves as Christian. The Christian population is split more or less evenly between Protestant (mostly Lutheran) and Catholic. Islam is the next largest religion amongst Germans at approximately 5%. Just under 40% of the population has no religious affiliation.

Official Language

German is the official and predominant spoken language in Germany. Turkish, as an immigrant language, is spoken by approximately 2% of the population. Most Germans now learn English as a second language and indeed English is spoken fluently amongst the younger populations in Berlin, Hamburg and other urban centers.

Germany HR at a Glance

Employment Law

The employment relationship is governed and regulated by:

  • Statutory laws,
  • The employment agreement, and
  • Collective agreements (if any), such as works agreements with the works council or collective bargaining agreements with the union.

Employment Contract

The terms of the employment (for example, working hours, remuneration, holidays, and benefits) are usually agreed on in a written employment agreement. Except for fixed-term employment and non-compete obligations (which must be in writing), verbal agreements are also permissible, but are not recommended. In addition, the employer is obliged to provide a written statement of the employment terms to the employee within one month of the commencement of employment. The written statement must include, in particular:

  • Start date of the employment,
  • Usual work location,
  • Brief job description,
  • Salary and other elements of the remuneration,
  • Working hours,
  • Annual holidays,
  • Notice period, and
  • Applicable collective agreements.

Employment agreements often include additional provisions, such as:

  • The flexibility to assign other comparable duties,
  • Confidentiality provisions,
  • Non-compete requirements for approval of other occupations,
  • Provisions regarding the return of company property, and
  • Deadlines to claim rights based on the employment relationship.

Contract Terms

The terms of the employment contract may not provide for lesser conditions than any minimum legal entitlements established in employment legislation or by applicable collective agreement.

Probation Period / Trial Period

Probation periods are permitted up to 6 months in length. During the probation period both parties are entitled to give 2 weeks’ notice of termination.

Working Hours

An average working week is considered to be 38-40. Workdays are typically 8 hours and should not exceed 10 hours. There is a statutory maximum of 48 work hours per week as average in any 6-month period. There must always be an uninterrupted minimum break of 11 hours after every workday. Work on Sundays and official holidays requires special permission.


No overtime rate set forth by statute, instead subject to contractual agreement, which is largely regulated by standard contract term provisions. The agreement needs to be fair; any provision incorporating overtime into overall wages needs to be related to a defined amount of overtime.


Bonuses are common but care should be taken to ensure clear and objective language in the contract or an addendum to the contract. For example, schemes may refer to a bonus as entirely discretionary, in practice as soon as a bonus has any relation to performance it is very difficult for the employer to make it entirely discretionary.

Notice Period

The Employer is obliged to give the Employee the following notice:

Length of Employment

Length of Notice
During probationary period two weeks’ notice at any time
After or without probationary period four weeks’ notice to the 15th of the month or to the end of the calendar month
After two years’ service one month’s notice to the end of the calendar month
After five years’ service two months’ notice to the end of the calendar month
After eight years’ service three months’ notice to the end of the calendar month
After ten years’ service four months’ notice to the end of the calendar month
After 12 years’ service five months’ notice to the end of the calendar month
After 15 years’ service six months’ notice to the end of the calendar month
After 20 years’ service seven months’ notice to the end of the calendar month


The Employee is obliged to give the Employer the following notice:

Length of Employment Length of Notice
During probationary period two weeks’ notice at any time
After or without probationary period four weeks to the 15th of the month or to the end of the calendar month



In most instances the Dismissal Protection Act (“Kundigungsschutzgesetz”) will be applicable (once the employee is employed for more than six months) and this act states a termination is only effective on the following grounds:

  • conduct related (malperformance or misconduct)
  • personal (such as longstanding illness) or
  • operational reasons.

Certain employee groups enjoy special protection against dismissal (such as pregnant employees and mothers within four months after the birth of the child, employees during parental leave or care-giver leave, severely disabled employees, works council members, data protection officers). The dismissal notification must be given in writing (i.e. signed in wet ink by a duly authorized representative of the employer) but does not have to state the reasons for the dismissal. The dismissal letter must be delivered to the employee in its original form. Where there is a dispute, the employer is required to evidence the proper and timely delivery of the dismissal notification.

Post-Termination Restraints

Must be in writing. Those that protect the employer’s legitimate business interests can generally be enforced if reasonable.

Non-competes – Typically no longer than 6-12 months, with a statutory maximum of 2 years. Compensation of 50% of the employee’s wages is required during the non-compete period.

Customer non-solicits – Permissible only in narrow circumstances.

Employee non-solicits – Permissible only if related to illegal poaching; an agreement not to hire employees from a certain business is not enforceable.

Severance Pay

No statutory severance. A valid dismissal will end the employment without compensation, unless it is part of a collective restructuring covered by a social plan agreed with the works council. Invalid dismissal leads to enforced reinstatement by the labour courts, unless the parties settle the dispute. Settlements are standard; the general formula is between 0.5 and 1.5 monthly salaries per year of service. There is no maximum threshold on settlements.

No statutory right to pay in lieu of notice. As to garden leave, the right depends on contract terms and merits of the case, applying a weighting of interests between both parties. Garden leave is common for senior employees.

Fixed Term Contracts

Fixed term contracts are only permissible for objective and material reasons. However, contracts with a term of 2 years or less are exempt from this ruling. Within this period the maximum number of successive fixed term contracts is 4. Fixed term contracts and contracts under AüG license must be signed in original, hard copy, wet signature.

Tax and Social Security

Personal Income Tax (PIT)

Income tax in Germany is calculated by applying a progressive tax rate schedule to taxable income as follows:

Taxable Income Bracket   Tax Rate
From (EUR) To (EUR) %
0 (0*) 9,984 (19,968*) 0
9,985 (19,970*) 58,596 (117,192*) 14-42
58,597 (117,194*) 277,825 (555,650*) 42
277,826 (555,652*) No limit 45

*figures in brackets denote married couple filing a joint return

In addition to the rates above, the following tax and surcharge are levied on all types of income:

  • Solidarity surcharge: 5.5% of the income tax if the income tax exceeds EUR 16,956 (single/Separately assessed taxpayers) or EUR 33,912 (married/joint tax assessment)
  • Church tax: 8 or 9 % of the income tax – church tax is only levied if the taxpayer is a member of a church that is recognized for church tax purposes.

The following categories of income are exempt from tax:

  • certain payments from health or accident insurance
  • certain social security benefits including unemployment benefits and maternity grants
  • kindergarten fees if certain conditions are met.

In case a secondary household is established in Germany for business purposes, the following payments are exempt under certain circumstances:

  • home trips (once per week)
  • meal allowances up to certain amounts and subject to certain time limits
  • rent at the place of work (actual costs but limited to EUR – 1,000 per month).

If certain other conditions are met, rental cost incurred for the employee, meal allowances and commuting expenses can be reimbursed tax-free, in general.

Wage tax is due monthly and must be withheld on salary by the employer. Other categories of income where prepayments may be due will be assessed by the authorities and paid by the individual.

Interests, dividends and capital gains on stocks are subject to a flat tax of 25% plus a solidarity charge.

Social Security

The employer is obligated to make the social security contributions as follows:

Rates for 2022

Insurance Employer Contribution % Employee Contribution % Charged up to an annual income ceiling of:
Pension insurance (Rentenversicherung) 9.3 9.3 EUR 84,600 (West), EUR 81,000 (East)
Unemployment insurance (Arbeitslosenversicherung) 1.2 1.2 EUR 84,600 (West), EUR 81,000 (East)
Health insurance (Krankenversicherung) 7.3 + 0.8 7.3 + 0.8 EUR 58,050
Accident insurance 1.5
Employer allocation health insurance 2.9
Nursing insurance (Pflegeversicherung) *supplement 0.35% for childless individuals over 23 years of age 1.525 1.525 (+0.35 for childless employees) EUR 58,050

+Depending on the provider selected, the supplemental premium can be up to an additional 2.5% (average 1.3%), split equally between employer and employee contribution.

*The above rates serve as a broad guideline. Actual rates charged will differ.


Salary Payment

Normally paid monthly on or around the last workday of the month, payment must be made by electronic transfer.


If an employee has an employment contract, then a written salary advice showing gross payments and full details of deductions is a legal requirement.

Timesheets and Record Keeping

In 2019, the European Court of Justice stated that companies must set up a system to record the working time of their employees. Thus, employers are obliged to implement an objective, reliable and accessible system that allows recording of the daily workday performed by each employee.

Annual Leave

There is a minimum entitlement of 20 days per annum (full time employees). However, many employees are provided with a greater number of days; 25-30 days is common practice amongst white collar employees.

Holiday should under normal circumstances be used in the same year. Carry over is only permissible if urgent to the business operation or for urgent personal reasons for the employee. However, all carry over must be agreed by both the employer and the employee and must be used within the first 3 months of new holiday year.

Public Holidays

German public holidays, between 9 and 12 days, are determined by each federal state (except German Unity day). There is in principle a ban on working on public holidays, to which there are only a few exceptions. Holidays are normally observed on their calendar day.

Sick Leave

Employees are entitled to receive the full remuneration from their employer for up to six weeks of sickness, subject to certain conditions. Afterwards they can apply for sick pay with the statutory (or voluntary private) health insurance for up to 72 weeks.

Maternity & Parental leave

Women must not work for a period of six weeks before giving birth and eight to twelve weeks after.

A woman is entitled to 14 weeks maternity pay which is equal to the last salary and funded by the employer with a contribution from the employee’s health insurance.

Mothers and fathers are entitled to parental leave of up to three years. Parental leave paid by the state for 12 months (14 months if the other parent takes at least 2 months) with a 67% net payment rate. Further 24 months of unpaid parental leave possible with full protection of the workplace and right to return to work.

While on parental leave and subject to certain conditions, the employee is entitled to take up part-time employment of up to 30 hours per week either with the original or with a different employer (in the latter case the permission of the original employer is required). At the end of parental leave the employee is entitled to return to work on their original terms and conditions.

Employees who are pregnant or on maternity or parental leave have additional protection against dismissal.

Nursing Care Leave

Employees who need to provide acute care for a child or adult dependent are entitled to up to 10 days caregiver leave from the employer. Employers may be obliged to continue salary payment if notice of this exists in a bargaining agreement or the employment contract. If not paid, employees can claim subsidy from the state under the Nursing Insurance social provision.

Compassionate and Bereavement Leave

Any leave, other than the above-mentioned statutory leaves (e.g. compassionate leaves, leave when moving) is generally subject to individual negotiations or may be part of collective bargaining agreements/works council agreements.

Benefits to the Employee in Germany

Statutory Benefits

Social security contributions underwrite an excellent social provision in Germany ranging from unemployment benefit of up to 67% of previously received net salary to one of the best and most comprehensive health care systems in the world, providing its residents with health, sick pay and long-term nursing care insurance coverage.

The employee can choose between different statutory health insurances. Only employees with an income exceeding the annual remuneration thresholds (62,550 Euros in 2020) are exempt. They can become members of private health insurances. In both cases, the contributions are shared equally by the employer and the employee.

Other Typical Benefits

Different types of bonus payments and other benefits are common, all of which have to be negotiated individually or are typically part of collective bargaining agreements/works council agreements, such as company car, car allowances, gym memberships, group accident insurances, “Jobticket” (subsidised commuter passes) , childcare arrangements or allowances, or additional allowance for sick pay.


If an employee’s role requires a lot of business travel and a company car is not provided, it is common practice to pay a car allowance.

The car allowance is a normal taxable amount like gross salary.

The amount can be dependent on how many business trips the private car will be used for, which kind of car will be used etc. Typical allowances range from €500 to €800 per month but can also be as high as €1,400 per month in certain circumstances.

Please note, that the employer is still allowed to pay an additional mileage rate of €0.30 per km for all business-related kilometers driven with the private car. This mileage rate is tax free.

Visas and Foreign Workers

General Information

To be eligible to work in Germany, you must either have a work/residence permit and a work visa. But not everyone is subject to the visa requirements, however, everyone is subject to the residence/work permit.

  • Residents of the following do not need a visa to work in Germany: EU/EEA, Australia, Canada, Israel, Japan, Republic of Korea, New Zealand, Switzerland, USA.
  • If you are from the EU/EEA, Switzerland, Liechtenstein, Norway or Iceland you do not need a work visa to enter Germany for employment purposes. You just have to register your residence once you arrive in Germany, using a passport or valid ID.
  • If you are from Australia, Israel, Japan, Canada, South Korea, New Zealand or the USA, you do not need a work visa to enter Germany, nor do you need to have a job offer prior to entering Germany. But you do need to apply for a residence permit at the Foreigners’ Office upon your arrival in Germany.
  • If you are not a resident of any of the aforementioned countries, you will have to apply for a work visa in order to enter Germany and commence work. You must also apply for a residence permit for work purposes upon your arrival in Germany.

Visas can currently only be issued in the specific exceptional cases listed below:

  • Healthcare professionals, health researchers and elderly care professionals;
  • Transport personnel employed in the movement of goods; seasonal workers, sailors (for transit)
  • Temporary visits
  • Diplomats, staff of international organizations, military personnel, humanitarian aid workers in the exercise of their functions
  • Passengers in transit
  • For humanitarian reasons or protection
  • Family reunification.

Applications from skilled workers and highly qualified workers from the following categories:

  • skilled workers with a concrete job offer in accordance with the legal definition
  • scientists/researchers
  • secondments and in company transfers restricted to managers and specialists
  • senior employees
  • IT experts
  • employment in particular public interest

Entry as a skilled worker or highly qualified employee is conditional on proof of an obligation to be present in Germany (e.g. employment contract) and prima facie evidence that employment is necessary from an economic perspective and that the work cannot be postponed or carried out from abroad (verification from the employer/contractor). Economic necessity refers to economic relations and/or Germany’s economy or that of the single market. Relevant documentation must be carried and presented to border control personnel.

Public Holidays in 2022

S.No Occasion Date
1. New Year’s Day January 1st
2. Good Friday April 15th
3. Easter Monday April 18th
4. Labour Day May 1st
5. Ascension Day May 26th
6. Whit Monday June 6th
7. German Unity Day October 3rd
8. Christmas Day December 25th
9. Boxing Day December 26th

*above mentioned holidays are nationwide – regional and local holidays may apply in certain states of Germany


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