Can you hire employees in Germany without a legal entity?

Yes, with an Employer of Record (EOR), you can hire employees in Germany without establishing a local entity. EuroDev becomes the legal employer while you direct the employee’s daily work.

What’s the difference between EOR and PEO in Germany?

An EOR employs the worker on your behalf (no entity required). A PEO typically supports companies that already have a local entity and want help administering payroll, HR, and compliance processes.

Are permanent contracts common in Germany?

Yes. Indefinite (unbefristet) contracts are common and often preferred. Fixed‑term contracts are possible but must meet legal requirements.

What are the limits for fixed‑term contracts in Germany?

As a general rule, fixed‑term contracts can often be extended up to three times and usually cannot exceed 24 months total, unless an exception applies.

How does payroll work when hiring in Germany through an EOR?

Payroll is typically processed monthly and includes wage tax withholding and social security contributions. EuroDev handles calculations, filings, and payments as part of the EOR service.

What are typical employer costs in Germany?

Employer costs are often about 19–20% above gross salary due to statutory social contributions. Exact percentages vary based on salary levels and contribution ceilings.

What notice period applies in Germany?

Germany has statutory notice periods that increase with tenure, starting at four weeks and rising up to seven months for long service.

How much vacation do employees receive in Germany?

Minimum statutory leave is 20 days per year for a five‑day week (or 24 days for a six‑day week), typically fully applicable after six months.

Do public holidays differ across Germany?

Yes. Holidays vary by federal state. There are several nationwide holidays, plus additional state-specific holidays depending on location.

Is using an EOR legal in Germany?

Yes, using an Employer of Record is legal when structured correctly and compliant with employment and payroll requirements. EuroDev ensures the employment model is set up and administered appropriately.

PEO & EOR services · Germany

Hire employees in Germany with an Employer of Record

Hiring in Germany through an EOR does not require setting up a local legal entity. EuroDev becomes the legal employer running payroll and compliance while you keep full operational control.

✓ No entity required

✓ Onboard in weeks

✓ Full compliance managed ✓ German payroll & social security managed

Talk to our EOR experts today →

EMPLOYER COST

SNAPSHOT

Avg. annual gross salary €53,335

Employer contributions ≈ 29.90%

Statutory annual leave 22 days

Standard work week 40 hrs

Source: EuroDev EOR payroll data for Germany, 2026.

PEO & EOR services · Germany

How hiring in Germany through EuroDev works

An Employer of Record lets your company hire in Germany without establishing a German subsidiary or branch. EuroDev becomes the legal employer, while your company retains day-to-day operational direction.

Employee selection

You select the candidate you want to hire in Germany.

Contract setup

EuroDev drafts a locally compliant contract, aligned with labor law and applicable CBAs.

Payroll & tax

We run monthly payroll and report income tax and social security accurately.

Ongoing compliance

Employment administration, benefits, and paid leave managed continuously.

The decision

Direct expansion vs. partner-led market entry

Both paths are legitimate - the right one depends on how fast you need to move and how permanent your presence in Germany will be.

Most chosen

Employer of Record

When an EOR is the right choice

✓ You want to hire quickly without long setup times

✓ You are testing the German market

✓ You plan to hire a small or distributed team

✓ You want to minimize legal and compliance risk

Local Entity

When a local entity makes sense

✓ You are building a large, long-term workforce in Germany

✓ You require a permanent commercial presence

✓ You want full internal control over payroll and HR

Employment contracts

Permanent and fixed-term contract rules

Germany assumes employment is indefinite by default - incorrectly structured temporary contracts can be automatically reclassified as permanent.

Contract type · default

Permanent (indefinite)

✓ No predefined end date

✓ Full statutory rights from day one

✓ Strong protection against unfair dismissal

✓ Statutory severance on dismissal

✓ Probation permitted within legal limits

Contract type · limited use

Fixed-term (temporary)

✓ Max. three renewals in most cases

✓ Max. duration: 24 months without objective justification

✓ Not permitted if previously employed by the same employer

✓ Converts to indefinite beyond the limit

✓ Misuse risks penalties and reclassification

Termination, notice & severance

Germany has strong employee protection laws

Employment ”at will” does not apply when hiring through an EOR in Germany.
EuroDev guides you through termination procedures to ensure compliance.

1 mo.

Minimum statutory notice

0.25–1 mo.

Typical severance per year of service

7 mo.

Maximum severance notice

Probation

Probation periods

Not mandatory, but must be agreed in writing. Probation may run up to six months. Either party may terminate employment during probation with two weeks' notice.

In practice

Notice & severance in practice

Notice may be extended based on employee seniority and may also be affected by contractual terms or collective agreements. Severance is not automatically required under German law but is common in practice. Severance amounts are typically linked to seniority, age, collective agreements, and dismissal protection claims.

Payroll & employer costs

What hiring through an EOR costs in Germany

Employer costs typically run around 20–25% on top of gross salary, covering all mandatory employer charges and statutory contributions.

Cost example

Estimated annual employment cost

Average annual gross salary €53,335

Employer contributions (≈20–25%) €10,667–€13,334

Estimated total employment cost €64,002

Contribution breakdown

Mandatory employer contributions

Pension insurance

9.30%

Health insurance

~8.10%

Unemployment insurance

0.20–0.60%

More rows needeeedddd

!!!!!!!!!!!!

Total estimated

~29.90%

Registration

Social security registrations

✓ Registration with German social insurance authorities

✓ Monthly payroll and contribution reporting

✓ Withholding employee social security contributions

✓ Paying employer social security contributions

Working time

Working hours & overtime

✓ Standard schedule: 40 hours/week, 8 hours/day

✓ Overtime rules may apply under labor law or CBAs

✓ Often governed by collective agreements

✓ Compensated financially or with time off

Paid leave & public holidays

Statutory leave entitlements in Germany

EuroDev ensures every leave entitlement is tracked and administered correctly, from vacation days to parental leave.

Vacation

Annual leave

22 days

✓ 20 days for employees working a 5-day week

✓ 24 days for employees working a 6-day week

Statutory

Public holidays

9-13 days

✓ Number of public holidays varies by federal state

✓ Additional holidays may apply at state level

Parental leave

Maternity leave

14 weeks

✓ 6 weeks before the expected birth date

✓ 8 weeks after childbirth

✓ 18 weeks for multiple or premature births

✓ Income replacement through statutory health insurance

Parental leave

Paternity leave

✓ Available to both parents

✓ Can be taken during the child's early years

✓ Job protection applies throughout approved leave

✓ Return to the same or an equivalent role after leave

Ready when you are

Hire employees in Germany with confidence

Local expertise · Global support

EuroDev helps international companies hire in Germany quickly, compliantly, and without unnecessary risk whether you're onboarding your first employee or expanding an existing team.

Talk to our EOR experts → Explore EOR services

What happens after you contact us? +

1 Share your hiring needs and expected timeline.

2 Receive a compliant employment setup plan.

3 Start contract preparation and employee onboarding.

FAQ's

: Yes, with an Employer of Record (EOR), you can hire employees in Germany without establishing a local entity. EuroDev becomes the legal employer while you direct the employee’s daily work.
: An EOR employs the worker on your behalf (no entity required). A PEO typically supports companies that already have a local entity and want help administering payroll, HR, and compliance processes.
: Yes. Indefinite (unbefristet) contracts are common and often preferred. Fixed‑term contracts are possible but must meet legal requirements.
: As a general rule, fixed‑term contracts can often be extended up to three times and usually cannot exceed 24 months total, unless an exception applies.
: Payroll is typically processed monthly and includes wage tax withholding and social security contributions. EuroDev handles calculations, filings, and payments as part of the EOR service.
: Employer costs are often about 19–20% above gross salary due to statutory social contributions. Exact percentages vary based on salary levels and contribution ceilings.
: Germany has statutory notice periods that increase with tenure, starting at four weeks and rising up to seven months for long service.
: Minimum statutory leave is 20 days per year for a five‑day week (or 24 days for a six‑day week), typically fully applicable after six months.
: Yes. Holidays vary by federal state. There are several nationwide holidays, plus additional state-specific holidays depending on location.
: Yes, using an Employer of Record is legal when structured correctly and compliant with employment and payroll requirements. EuroDev ensures the employment model is set up and administered appropriately.