HR Services in Germany
HR support for US, UK and international companies hiring in Germany: German contracts and policies, payroll coordination, compliance and recruitment. Build your German team without building an HR department first.
Last reviewed October 2026. Collective agreements can set higher standards.
Expand Into Germany With an HR Partner Who Knows the Rules
Germany gives US and UK companies Europe’s largest market and highly qualified workers. It also brings detailed employment rules on written terms, working time, dismissal protection, works councils and collective agreements. Failing to provide the essential terms in writing can be fined, and a dismissal without hearing the works council is invalid.
Europe HR Solutions is your HR partner for Germany. We prepare German contracts, policies and handbooks, put payroll foundations in place and coordinate your payroll provider, support hiring and reward, and review your HR practices as German law changes.
Expanding beyond Germany? The same team covers 27+ European countries, so you manage one relationship instead of a provider in every market.
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Tell us about your plans for Germany. We’ll tell you honestly what we see.
Book a Free Consultation Free, no commitment.HR Outsourcing in Germany With Europe HR Solutions
One senior Europe HR Solutions team coordinates your HR in Germany, working with independent in-country HR professionals from our European network who understand German employment practice.
Everyday HR, handled
Payroll coordination, recruitment, compliance and employee relations in Germany, handled as one service, so you can focus on growing the business.
Compliance with German labor law
We make sure your HR operations comply with German law, and review your contracts and policies as statutory obligations change.
Cost-effective HR
Outsourcing means you don’t need your own HR team in Germany, which reduces cost and frees resources for growth.
Flexible engagement
We work ad hoc, on an interim basis, by project or on a retainer, from a few weeks to several years.
HR Services We Provide in Germany
Each of our services is available for Germany.
Compliant contracts, payroll registration and statutory foundations in place before your first German hire.
Employment Documentation Package→German contracts, policies and handbooks aligned with German labor law.
Systems & Payroll Coordination→Your HR systems and payroll providers aligned, with consistent data and full visibility for leadership.
Compensation & Benefits Strategy→A structured reward framework aligned with German law, market data and internal equity.
Recruitment Support→Roles calibrated, salaries benchmarked and hiring aligned with German employment law.
HR Compliance Audit→A structured review of your HR compliance risk in Germany, with a clear action plan.
Retained HR Services→Ongoing senior HR oversight on a monthly retainer, including manager coaching and support with works council interactions.
M&A HR Support→HR due diligence, employee transfer and post-deal integration for deals in Germany.
Hiring Your First Employee in Germany: 6 Steps
What has to be in place before your first payroll in Germany.
- 01
Decide how you will employ
Decide whether to employ through a German entity. With your tax advisor, check whether you count as a domestic employer for wage tax.
- 02
Get a company number
Apply to the Federal Employment Agency for a company number (Betriebsnummer). You need it for social insurance reporting.
- 03
Set up payroll
Wage tax returns are filed monthly as a rule, and social contributions are paid to the employee’s health insurance fund.
- 04
Issue the contract
Provide the essential terms in writing or text form. The parties’ names and addresses, pay and working hours are due on the first working day.
- 05
Register the employee
Report the new employee to their health insurance fund with the first payroll, and no later than six weeks after the start.
- 06
Join accident insurance
Notify the statutory accident insurance body for your sector (Berufsgenossenschaft) within one week of starting the business.
Key Employment Regulations in Germany
Federal law sets the baseline. Collective agreements and works councils can add to it, so check both before you hire.
Show all 11 regulationsHide the regulations
Employment contracts (Nachweisgesetz)
Every employee must receive the essential terms of the job in writing. Since January 2025, text form such as email is allowed, except in sectors such as construction and hospitality. A fixed-term clause still needs a signed written contract.
Working hours (Arbeitszeitgesetz)
Up to 8 hours a day, or 10 if the average stays at 8 over six months, with at least 11 hours’ rest between working days. Employers must record working time (Federal Labor Court, 2022). A reform is in draft and not yet law.
Minimum wage (Mindestlohngesetz)
€13.90 an hour since January 1, 2026, rising to €14.60 on January 1, 2027. Collective agreements can set higher rates.
Paid leave and public holidays
At least 24 working days a year on a six-day week, which equals 20 days on a five-day week. October 3 is the only federal public holiday; the federal states set all others, so the number varies by state.
Sick pay (Entgeltfortzahlung)
Full pay for up to six weeks per illness, after which employees with statutory health insurance receive sickness benefit (Krankengeld). Employees must have a doctor confirm any absence that lasts more than three calendar days, and you can ask for this earlier.
Parental leave (Elternzeit)
Each parent can take parental leave until the child turns three, and up to 24 months of it later, until the child turns eight. The employer pays no salary during it; parents can claim parental allowance (Elterngeld) instead.
Probation and notice
Up to six months of agreed probation with two weeks’ notice. After that, statutory notice starts at four weeks and rises to seven months after 20 years’ service.
Dismissal protection (Kündigungsschutzgesetz)
After six months’ service in a business with more than ten employees, a dismissal needs a reason related to the person, their conduct or urgent business needs. Notice must be given in writing.
Works councils (Betriebsrat)
Employees can elect one in any establishment with at least five permanent employees with voting rights. It has co-determination rights on matters such as working time and monitoring tools, and must be heard before every dismissal.
Social security
Employer and employee each pay about 21% of gross salary into pension, health, unemployment and long-term care insurance, up to annual earnings ceilings. Accident insurance is paid by the employer alone.
Pay transparency (Entgelttransparenzgesetz)
Employees in establishments with more than 200 staff can already request pay information. Germany missed the June 2026 deadline for the EU Pay Transparency Directive, and a new law is still to come.
The Benefits of Expanding to Germany
What Germany offers companies that set up properly.
Europe’s largest market
Germany is Europe’s largest market, according to Germany Trade & Invest (GTAI), with 83.5 million people at the end of 2025.
Innovation clusters
Seven of the world’s top 100 innovation clusters, the most of any European economy (Global Innovation Index 2026).
Corporate R&D
Third worldwide for global corporate R&D investors (Global Innovation Index 2026).
Highly qualified workers
The availability of highly qualified workers and engineers is one of Germany’s main advantages as a business location (GTAI). Germany has 3.9 million employed scientists and engineers, the most of any EU country (Eurostat, 2025).
High productivity
High productivity and production standards make companies in Germany technology leaders, the basis of “Made in Germany” quality (GTAI).
Hiring support
The Federal Employment Agency’s employer service helps fill vacancies, and a wage subsidy is possible for some hires if you apply before they start. The standard subsidy covers up to 50% of the eligible wage for up to 12 months.
The Challenges of Expanding to Germany
Six things to plan for before your first hire.
Detailed employment law
Dismissal protection, works council rights and collective agreements all limit what a contract alone can decide.
Employment costs
About 21% of gross salary in employer social contributions, plus accident insurance, paid leave and up to six weeks of sick pay per illness.
Setup before the first payroll
A company number, wage tax registration where required, social insurance reporting and accident insurance all need to be in place.
Skilled worker shortages
The Federal Employment Agency found shortages in 157 occupations in 2025, mainly in care and health jobs, construction and skilled trades.
Payroll filings and audits
Wage tax is declared monthly as a rule, and the German Pension Insurance audits every employer’s social contributions at least every four years.
German as the official language
German is the official language of the authorities, so filings and official letters are in German.
Key HR Compliance Risks in Germany
Eight mistakes to avoid in Germany, and what each one leads to.
Missing written terms
Not providing the essential terms in writing is an administrative offense, with fines of up to €2,000.
Dismissal without valid grounds
Once dismissal protection applies, a dismissal without a valid reason is invalid.
Contractor misclassification
If a freelancer is really an employee (Scheinselbständigkeit), the client owes back employer and employee contributions for up to four years, or 30 if intentional.
Notice given by email
A dismissal must be signed in writing. Email or an electronic signature makes it invalid.
Fixed terms misused
An invalid fixed term, for example one without a signed written contract, makes the contract permanent.
No working time records
Employers must record working time, and hours beyond 8 a day must be recorded and kept for two years. Breaches can be fined.
Works council bypassed
Working time and monitoring tools need the works council’s agreement, and a dismissal without hearing it first is invalid.
Collective agreement overlooked
Where a collective agreement applies, contracts can only deviate from it in the employee’s favor.
Not sure where you stand? Our HR Compliance Audit gives you a structured review of your HR compliance risk in Germany, with a clear action plan.
Key Sectors in Germany
Germany’s leading export sectors in 2025, based on Eurostat trade data.
Free HR Guide for Germany
Navigating Germany’s Labor Laws: A Comprehensive Guide for Employers
Employment regulations, mandatory benefits, contracts and working conditions, termination and severance, and compliance best practices.
Want to read more first? See our HR and Compliance in Germany guide and our article on German works councils.
Hiring in Germany: Your Questions Answered
Questions companies ask before they hire in Germany.
Do we really need written employment contracts in Germany?
Yes. Every employee must receive the essential terms, including pay, working hours, leave and notice periods, in writing. Since January 2025, text form such as email is allowed, except in sectors such as construction and hospitality, and a fixed-term clause still needs a signed written contract. We draft contracts that comply with German law.
Can we let someone go in Germany if they don’t work out?
During an agreed probation period of up to six months, either side can give two weeks’ notice. After six months, in a business with more than ten employees, dismissal protection applies and you need a valid reason. We make sure your contracts include a clear probation period.
How much does an employee in Germany cost on top of salary?
Employer social contributions add about 21% of gross salary, up to annual earnings ceilings, and statutory accident insurance is paid by the employer alone. Also plan for at least 20 days of paid leave and up to six weeks of sick pay per illness. Our Compensation & Benefits Strategy builds a reward framework aligned with German law, market data and internal equity.
Can staff in Germany work longer hours if we pay them more?
No. Extra pay doesn’t lift the legal limit of 8 hours a day, or 10 if the average stays at 8 over six months, and employees need at least 11 hours’ rest between working days. Breaches can be fined up to €30,000. We structure work schedules that comply and still leave room for flexibility.
What can we do if employees in Germany abuse sick leave?
Employers pay full salary for up to six weeks per illness. Employees must have a doctor confirm any absence that lasts more than three calendar days, and you can ask for this earlier. We put clear sick leave policies in place.
Do we really have to give 20 or more vacation days in Germany?
Yes. The legal minimum is 24 working days a year on a six-day week, which equals 20 days on a five-day week. We keep you compliant with leave entitlements and help you offer a competitive benefits package.
Is it really that hard to terminate employees in Germany?
It’s strict, not impossible. Once dismissal protection applies, you need a valid reason and the correct notice period, and where a works council exists, it must be heard first. Notice must be given in writing with a handwritten signature; email is not enough. We guide you through every step.
Can we put everyone on fixed-term contracts in Germany?
No. Without an objective reason, a fixed term can last up to two years in total, with up to three extensions within that time. In its first four years, a new company can use up to four years. If a fixed term is invalid, the contract counts as permanent. We make sure every fixed-term contract meets these rules.
Can we avoid collective agreements in Germany?
Not if one binds you. If you are a member of the employers’ association that signed it, or it has been declared generally binding, its terms apply directly to the employment relationships it covers, and contracts can only deviate in the employee’s favor. We keep you compliant with any agreement that applies, with as much flexibility as it allows.
Do we have to accept a works council in Germany?
You can’t prevent one. In any establishment with at least five permanent employees with voting rights, employees can elect a works council. It has co-determination rights on matters such as working time and monitoring tools, and must be heard before every dismissal. We guide you in setting up and working with a works council.
What does pay transparency mean for us in Germany?
Today, the Pay Transparency Act gives employees in establishments with more than 200 staff a right to pay information. The EU Pay Transparency Directive adds pay information for job applicants and pay gap reporting for employers with at least 100 workers. Germany missed the June 2026 deadline and had not published a draft law as of September 2026. Our Compensation & Benefits Strategy covers EU Pay Transparency readiness.
What happens if we fail a labor inspection or audit in Germany?
Customs authorities check, among other things, that the minimum wage is paid, and the German Pension Insurance audits every employer’s social contributions at least every four years. Breaches of the Minimum Wage Act can be fined. We conduct regular compliance audits so your documentation is ready for inspection.
Plan Your German Expansion With an HR Specialist
Tell us about your plans for Germany, whether it’s your first hire or a growing team. We’ll tell you honestly what we see.
- Germany and 27+ European countries, through one team.
- No commitment, no generic pitch.
New to working with us? See how we work, from the first call to ongoing support.
What happens next: a senior consultant reads your message and replies within one business day to set up a short call.