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Do you want to hire an employee in Germany without a permanent establishment, but
need German payroll processing?
IPS can help you hire and pay employees in Germany in full legal compliance – even without a German entity
or permanent establishment. With us, you can outsource your foreign payroll processing.
There are 2 options:
1. Employer of Record (Germany)
Your employee is hired directly by us and seconded
to you on a full-time basis. In Germany, this is also
known as Arbeitnehmerüberlassung or Umbrella Company.
✓ Fast start in Germany
✓ No own entity required
✓ Payroll and administration fully outsourced
Please note: Under German law, this arrangement is only permitted for a maximum of 18 months.
2. Direct Employment
Direct employment within your company, but with
payroll processed under German law by registering
your company as a foreign employer.
✓ Long-term employment possible
✓ Employees hired directly within your own company
✓ German payroll via IPS
IPS is your global payroll solution for fast and successful
cross-border payroll processing without your own entity.
Remote Work Full Time from Germany – Key Facts About Payroll Abroad
To ensure you succeed in Germany right from the start, IPS is your partner for cross-border payroll and salary processing – helping you correctly employ your staff in Germany and handle German payroll in full compliance with local regulations.
Below are some key facts to help you understand the German payroll system.
Employer Social Contributions
International companies should expect additional employer costs of approximately 22–25% when running payroll in Germany. The exact amount of social contributions depends on the contribution assessment ceiling and the gross salary.
Overview of German employer social contributions
- Health insurance
- Unemployment insurance
- Long-term care insurance
- Pension and accident insurance
Sick Leave
When running payroll services in Germany, international companies must comply with the statutory regulations on continued salary payment during sick leave.
Employers in Germany are generally required to continue paying salary for up to 6 weeks in the event of illness.
Leave and Public Holidays
In Germany, every employee working a 5-day week is entitled to a minimum of 20 days of paid annual leave. However, it is common practice to grant between 24 and 30 days of leave.
These are the public holidays observed in all federal states:
→ 1 January – New Year’s Day
→ Good Friday
→ Easter Monday
→ 1 May – Labour Day
→ May – Ascension Day
→ May/June – Whit Monday
→ 3 October – German Unity Day
→ 25 December – Christmas Day
→ 26 December – Boxing Day
Probationary Period and Termination
In Germany, the probationary period may be set for a maximum of 6 months. During the probationary period, the notice period is 2 weeks.
The notice period after the probationary period is set out in the employment contract. It can either be agreed for a specific duration (for example, a minimum of 1 month) or the statutory notice periods apply:
→ Up to five years of service: 1 month
→ After five years: 2 months
→ After eight years: 3 months
→ After ten years: 4 months
→ After twelve years: 5 months
→ After 15 years: 6 months
→ After 20 years: 7 months
Expand into Germany fully prepared
Deploying your own employees in Germany comes with numerous legal and administrative requirements. With our international payroll solutions, we ensure compliant and efficient processing.
Your benefits:
✓ Legally compliant payroll processing
✓ Compliance assurance and risk minimisation
✓ Full handling of all social security matters
✓ Employment of staff without your own permanent establishment
✓ Flexible expansion and access to new locations
Get a no-obligation consultation now and employ staff in Germany with full legal certainty.
Where we can support you
Still have questions?
We’re here to help – quickly and straightforwardly!
Just call us: +49 2173 2039568
or send us an email!