Contracts must be written in English or German, and can be bilingual. Contracts must be in written form and signed by both parties.
Contracts must include:
Name (both parties)
Address (both parties)
Start date
End date (if applicable)
Work location
Job description
Salary (including all allowances)
Payment date
Working hours
Annual leave length
Notice period
Part – time Employees: IC Contracts
Similar to full – time employment contracts, except that the weekly working hours must be specifically listed, and these working hours should be less than the general legal working hours.
Interns
Special regulations for “Werkstudent” are as follows:
During the teaching period of the semester: The maximum working hours per week are 20 hours.
Exceptions to the 20 – hour rule:
Holidays between semesters (summer and winter vacations).
If the work is mainly done at night, in the evening or on weekends, and it does not affect studies with studies as the priority, then the 20 – hour limit can be exceeded, but not more than 26 weeks (182 calendar days) within 12 months.
Internships in Germany are generally divided into two categories: mandatory internships (usually in science and engineering majors) and voluntary internships (usually in liberal arts majors). In job advertisements, employers generally state which type of interns they are recruiting for the position.
In mandatory internships, the school will give clear regulations on the content and duration (usually 4 to 6 months) of the internship. Students need to complete the internship according to the regulations and write an internship report. The remuneration for mandatory internships does not need to follow the minimum wage law.
Voluntary interns are only subject to the minimum wage standard if they a) are over 18 years old; b) the internship period exceeds 3 months.
2. Overview of Local Statutory Welfare Systems
Salary Payment
Once a month
Monthly Minimum Wage
The minimum wage ranges from €2,088 per month (€12 per hour) to €2,253.30 per month (€13 per hour).
Probationary Period
The probationary period is not mandatory. There is no minimum probationary period. The maximum probationary period is 6 months (180 days).
According to local labor laws, our minimum probationary period is 0 days. You can extend it to the maximum probationary period of 180 days allowed by law.
Employer Costs
Employer costs are generally estimated to be 22.6% of the employee’s salary.
Retirement – 9.30%
Health insurance estimated – 8.61%
Unemployment insurance – 1.30%
Long – term insurance premium – 1.7%
Accident insurance – 1.14%
Maternity – 0.51%
Bankruptcy tax levy – 0.06%
One – time mandatory wet – ink employment agreement processing fee – $80
The contribution of some employers is limited, so the percentage may vary.
3. Salary Payment and Statutory Holiday Responsibilities
Salary Payment
Once a month
Monthly Minimum Wage
The minimum wage ranges from €2,088 per month (€12 per hour) to €2,253.30 per month (€13 per hour).
Probationary Period
The probationary period is not mandatory. There is no minimum probationary period. The maximum probationary period is 6 months (180 days).
According to local labor laws, our minimum probationary period is 0 days. You can extend it to the maximum probationary period of 180 days allowed by law.
Employer Costs
Employer costs are generally estimated to be 22.6% of the employee’s salary.
Retirement – 9.30%
Health insurance estimated – 8.61%
Unemployment insurance – 1.30%
Long – term insurance premium – 1.7%
Accident insurance – 1.14%
Maternity – 0.51%
Bankruptcy tax levy – 0.06%
One – time mandatory wet – ink employment agreement processing fee – $80
The contribution of some employers is limited, so the percentage may vary.
Personal Income Tax
The personal income tax rate ranges from 14% to 45%. Income tax is calculated on a progressive basis. The tax rate depends on the employee’s tax class (marital status, whether the employee has one or more sources of income, etc.) and the monthly salary amount.
These tax rates are updated annually by the federal government.
€0 – € 10,347: 0%
€10,632 – €61,971: 14% – 42%
€ 61,971 – €277,825: 42%
Above € 277,825: 45%
Overtime Pay and Maximum Working Hours
The standard working hours are 8 hours per day and 40 hours per week. The standard working week is from Monday to Friday.
Overtime pay is not mandatory. Employers can decide at their discretion to compensate for overtime hours with leave or financial compensation. Hours outside the standard working hours are also considered overtime. Employees can work a maximum of 2 hours of overtime per day and 12 hours of overtime per week. For additional working hours, employees are paid the same hourly wage as their normal wage.
Statutory Holidays
Full – time and part – time employees are entitled to 20 days of paid time off (PTO) per year. Part – time employees who work less than 5 days a week are entitled to a pro – rata amount of leave. PTO accumulates monthly, with 1.67 days accumulated for each full month of work.
Treatment or Conversion Logic for Unused Annual Leave at the End of the Year
Unused leave can be carried over to the next year only if it is due to business needs that employees cannot use up their leave, or for special personal reasons of employees (approved by the company).
The carried – over leave must be used up within the first three months of the next year. If a departing employee cannot use up the remaining leave within the notice period, monetary compensation is allowed. The conversion method is to calculate the average daily wage based on the salary of the last 13 weeks.
Statutory Public Holidays
Depending on the employee’s location, Germany celebrates 9 national holidays and up to 8 local holidays.
National public holidays include: New Year’s Day, Good Friday, Easter Monday, Labor Day, Ascension Day, Pentecost, German Unity Day, Christmas Day, and Boxing Day.
Other Types of Leave
Maternity Leave
Pregnant employees are entitled to 14 weeks of paid leave. 6 weeks must be taken before the child’s birth, and the remaining 8 weeks must be taken after the child’s birth.
During this period, employees will receive 100% of their average net salary from the past 3 months. The employer and the health insurance company are responsible for paying part of the salary. However, the employer can get a 100% refund from the health insurance company during the “U2 process”.
Employees must submit a medical certificate indicating the expected due date to the employer.
Special regulations apply to premature births, multiple births, and children with disabilities. In such cases, the maternity protection period is up to 12 weeks after childbirth.
Employees cannot extend their leave, but they can take unpaid parental leave.
Paternity Leave
In Germany, there is no specific law for paternity leave. However, employees are entitled to parental leave.
Parental Leave
Employees are entitled to up to 3 years of parental leave for each child until the child’s third birthday. Employees will receive a parental leave allowance of at least €300 and at most €1,800.
If employees have worked before taking parental leave, they will receive this allowance. The amount of the allowance will be calculated by the “Elterngeldstelle” (National Parental Allowance Fund) based on the total salary from the past 12 months minus fixed taxes and health insurance premiums.
Employees need to notify their employers 7 weeks before the planned start of parental leave.
Parental leave cannot be extended.
Sick Leave
There is no maximum limit for paid sick leave in Germany. Employees will receive 100% of their salary during sick leave. The first 6 weeks (42 days) of sick leave are paid by the employer, and then by the health insurance company.
To apply for leave, employees must submit a sick – note to their employer and the health insurance company.
Employees must work for at least 4 weeks to be eligible for sick leave pay from the employer. If an employee gets sick within the first 4 weeks of work, their sick leave will be paid by the health insurance. To apply for insurance, employees must apply to the health insurance company and send a sick – note.
If a child is sick, each parent can get 30 days of paid leave. This cost is paid by the health insurance company. To apply for leave, employees must submit a sick – note for the child and apply to the health insurance provider.
Calculation Logic for Incomplete Attendance Salaries (Including Absences or Unpaid Leave)
The calculation method for unpaid leave is based on the number of calendar days in the month when the employee’s absence or unpaid leave occurs; the monthly salary divided by the total number of calendar days in the month equals the daily wage that must be deducted for unpaid leave.
Expatriate Employees
Local Minimum Wage Required for Split Payroll Work Permits
Whether Local Social Welfare Can Be Withdrawn (Such as Provident Fund)
Pensions can be withdrawn, but only the part contributed by the employee can be applied for a refund. The condition is that the employee must cancel their German residency and apply after leaving Germany for two years.
4. Dismissal Rules and Compensation Arrangements
Dismissal (Legal Requirements and Best Practices)
Notice Period
Less than 2 years of service: 4 weeks until the 15th or the end of the current month.
At least 2 years of service: 1 – 7 months until the end of the calendar month, depending on the length of service.
Voluntary Resignation
Employees are allowed to resign at any time.
Dismissal during Probationary Period
Employers are allowed to unilaterally terminate the employment relationship at any time during the probationary period.
Reasons: Poor performance; Bad behavior; Frequent lateness or absence.
Negotiated Dismissal
Employers and employees are allowed to mutually agree to terminate the employment relationship for any reason.
Common reasons
Whether the employment agreement is a fixed – term agreement or a fixed – term agreement.
There may be disputes or lawsuits involving the employee.
The employee cannot be dismissed for justifiable reasons, lay – offs, or other business reasons.
The employee has negotiated to terminate the employment contract.
Statutory notice period
Both parties can negotiate the last day of work and paid leave. It is recommended to comply with the notice period to avoid employees being unable to receive unemployment benefits.
If the notice period is not agreed upon in the contract, the following statutory notice periods will apply, depending on the employee’s length of service:
Less than 2 years of service: 4 weeks until the 15th or the end of the calendar month.
2 or more years of service: 1 month until the end of the calendar month.
5 or more years of service: 2 months until the end of the month.
8 or more years of service: 3 months until the end of the month.
10 or more years of service: 4 months until the end of the month.
12 or more years of service: 5 months until the end of the month.
15 or more years of service: 6 months until the end of the month.
20 or more years of service: 7 months until the end of the month.
Severance pay: Must be paid. It usually includes a payment equivalent to the total notice period and a bonus agreed upon by both parties (usually 1.5 months per year).
The bonus amount is calculated based on the length of service, professional level, and the compensation amount for unfair dismissal claims.
For employees with fixed – term contracts, the severance pay must be at least equal to the income the employee would have received during the remaining term of the contract.
Dismissal for Just Cause
Employers are allowed to immediately dismiss employees for serious misconduct without prior notice.
Reasons
Attendance issues
Theft of company money or property
Misconduct, including any form of serious violation of the employment agreement, policies, or applicable laws
Forgery of records
Harassment
Violence
Violation of the company’s code of conduct or ethical policies
Unauthorized leave
Compliance requirements
The misconduct must be very serious so that it becomes impossible to maintain the employment relationship, even temporarily.
A disciplinary procedure must be followed*, which usually requires notifying the employee of the facts that led to the initiation of the procedure and warning of possible dismissal. Except for the most serious misconduct, employees should have an opportunity to change their behavior to avoid dismissal.
The disciplinary procedure must be initiated within 2 weeks after the discovery of the facts that form the basis for dismissal.
Exceptions include situations involving serious violations of duties that cannot be resolved by changing behavior, or where it is not reasonable to expect the behavior to change.
Statutory notice period
For very serious contract violations, employees can be immediately dismissed without notice.
In other cases, the notice period will be implemented according to the provisions in the employment agreement. Otherwise, the statutory notice period will apply, depending on the employee’s length of service:
Less than 2 years of service: 4 weeks until the 15th or the end of the calendar month.
2 or more years of service: 1 month until the end of the calendar month.
5 or more years of service: 2 months until the end of the month.
8 or more years of service: 3 months until the end of the month.
10 or more years of service: 4 months until the end of the month.
12 or more years of service: 5 months until the end of the month.
15 or more years of service: 6 months until the end of the month.
20 or more years of service: 7 months until the end of the month.
Dismissal for Just Cause
Notice Period
For very serious contract violations, employees can be immediately dismissed without notice.
In other cases, the notice period will be implemented according to the provisions in the employment agreement. Otherwise, the statutory notice period will apply, depending on the employee’s length of service:
Less than 2 years of service: 4 weeks until the 15th or the end of the calendar month.
2 or more years of service: 1 month until the end of the calendar month.
5 or more years of service: 2 months until the end of the month.
8 or more years of service: 3 months until the end of the month.
10 or more years of service: 4 months until the end of the month.
12 or more years of service: 5 months until the end of the month.
15 or more years of service: 6 months until the end of the month.
20 or more years of service: 7 months until the end of the month.
Severance Pay
Must be paid. Usually includes a payment equivalent to the total notice period and a bonus agreed upon by both parties (usually 1.5 months per year).
The bonus amount is calculated based on the length of service, professional level, and the compensation amount for unfair dismissal claims.
For employees with fixed – term contracts, the severance pay must be at least equal to the income the employee would have received during the remaining term of the contract.
Resignation
Employees can resign at any time.
Dismissal during Probation
Employers can dismiss employees during the probation period at any time.
Reasons include poor performance, bad behavior, frequent lateness or absence.
Negotiated Dismissal
Employers and employees can mutually agree to terminate the employment relationship for any reason.
Common reasons include the nature of the employment contract, potential disputes or lawsuits, inability to dismiss for justifiable reasons, and negotiated contract termination.
Statutory notice periods apply based on the employee’s length of service.
Severance pay is required, usually including notice – period pay and a bonus.
Dismissal for Cause
Employers can immediately dismiss employees for serious misconduct without notice.
Reasons include attendance issues, theft, misconduct, forgery, harassment, violence, policy violations, and unauthorized leave.
A disciplinary procedure must be followed, except in extreme cases.
Statutory notice periods apply based on the employee’s length of service.
5. Local Government Incentives and Policy Analysis for Company Establishment and Local Hiring
Incentive Policies
Local Employment Protection Policy
None. Due to the large labor shortage, the previous regulation that required employers to post job openings locally and prove that they could not recruit suitable local talents before approving work visas for foreign employees has been lifted.
Quota Ratio for Foreign Employee Work Permits
There are no special restrictions.
6. Local Human Resources Analysis and Employment Suggestions
Number of Employed People
In the second quarter of 2024, the number of employed people in Germany was approximately 46.1 million. After seasonal adjustment, it increased by 54,000 people compared to the first quarter, an increase of 0.1%.
In August 2024, the unemployment rate increased by 0.1 percentage points to 6.1%. After seasonal adjustment, the index remained unchanged at 6.0%.
Average Salary Trend
In 2023, the median monthly income (not the average salary) of full – time employees in Germany increased by 4.1% to €3,796. The survey shows that men’s wages in Germany are still higher than women’s. The average monthly wage for men is approximately €3,930, while for women it is €3,563.
At the federal state level, Hamburg ranked first among the states with an average salary of €4,304, followed by Baden – Württemberg (€4,134) and Hesse (€4,087). The lowest were Mecklenburg – Western Pomerania (€3,098), Thuringia (€3,109), and Saxony – Anhalt (€3,152) in eastern Germany.
It is recommended to mainly hire local Chinese employees and local employees, with a small number of Chinese expatriates in key positions. Considering the fierce talent competition in Germany, it is recommended to consider other cash and non – cash benefits in addition to the basic salary and bonuses in the offer as selling points. The recommended employment form is hybrid, combining office work and working from home. The recommended working – hour management principle is trust rather than punch – card records.
7. Local Cultural Adaptation
Language
The official language of Germany is German, and English is also widely spoken. In addition, the Sorbs, Frisians, and Danes also retain their native languages in their respective living areas.
Religious Customs
The Catholic Church and the Protestant Evangelical Church in Germany are the two most influential churches in Germany. In terms of the number of believers, the Greek Orthodox Church can be ranked as the third – largest religion in Germany. In addition, 3.6% of the population believes in Islam, and 42% have no religious beliefs.
The German constitution guarantees freedom of belief and religion. Religious communities that comply with the constitution are recognized as “public law corporations” and have the rights conferred by law and the right to collect church taxes within the scope permitted by tax regulations.
When talking with Germans, it is not appropriate to mention topics such as Nazism, religious and party disputes. German law prohibits the use and dissemination of various Nazi symbols and behaviors. Germans consider the numbers “13” and “Friday” to be unlucky. In addition, it is not appropriate to give roses or wild roses casually. The former represents courtship, and the latter is specifically used for mourning.
Business Culture
In Germany, “making an appointment” in advance is very important. It is rather abrupt to want to meet a German without an appointment. Once the appointment time is set, it is best not to change it easily without special circumstances.
The overall style of dressing is solemn, simple, and tidy. Wear appropriate clothing for different occasions.
Social etiquette: For example, do not force others to drink alcohol at the dinner table; do not casually inquire about Germans’ personal privacy, including income, age, relationship experience, and political inclination.
In Germany, it has become a habit to give tips to service industry staff. Tips are an important source of income for waiters. Giving tips is not only a reward for their service but also a respect for others’ work. For example, when dining in a restaurant (except for buffets), customers usually add an additional 5% – 10% as a tip.
Germans are quite averse to four – person cross – handshaking or cross – talking in social situations. Because both of these practices are considered impolite.
When talking with Germans, it is not appropriate to mention topics such as Nazism, religious and party disputes.
