Unbefristeter Vertrag — the default, standard employment relationship in Germany with no fixed end date, continuing until terminated by either party per statutory notice periods and, where applicable, Kündigungsschutzgesetz (KSchG) dismissal protection
Under TzBfG, a fixed-term contract without an objective reason (sachgrundlos) may run up to 2 years total, with up to 3 renewals within that period. A contract with an objective/material reason may exceed 2 years and renew more flexibly but must be justifiable. Must be agreed in writing before the start date.
Under ArbZG, standard workday is 8 hours (max 48 hrs/week across 6 days), extendable to 10 hrs/day provided the average over 6 months/24 weeks does not exceed 8 hrs/day. No statutory overtime pay premium; overtime compensation typically set by contract or CBA.
A probationary period (Probezeit) of up to 6 months is standard and aligns with the qualifying period for KSchG dismissal protection. During probation, either party may terminate with 2 weeks' notice (§622(3) BGB) without needing to state cause.
Where paid, Weihnachtsgeld (often ~one month's salary, paid Nov/Dec) and Urlaubsgeld (paid before summer holidays) are most common; amounts/eligibility vary significantly by industry, region, and whether a CBA applies
None — Germany has no general statutory regulation of job titles for private-sector roles, aside from separately protected professional/trade titles (e.g., 'Ingenieur', regulated crafts/professions) requiring specific qualifications
Approximate employer share of gross salary: pension insurance 9.3%; health insurance 7.3% base rate plus roughly half of the average additional contribution (Zusatzbeitrag, ~1.45% of ~2.9% average); unemployment insurance 1.3%; long-term care insurance 1.8% (flat, unaffected by childless surcharge). Employers alone also fund statutory accident insurance via their industry's Berufsgenossenschaft, rated separately.
Approximate employee share of gross salary: pension insurance 9.3%; health insurance 7.3% base rate plus ~1.45% additional; unemployment insurance 1.3%; long-term care insurance 1.8% (with children, 23+), rising to 2.4% for childless employees over 23 (0.6% surcharge, reduced for parents of multiple children). No employee contribution to statutory accident insurance.
In addition to statutory leave, employees are entitled to the following statutory benefits:
Germany's statutory social insurance system has five branches, funded jointly by employer and employee (accident insurance is employer-only). Contributions are calculated on gross salary up to annual contribution assessment ceilings, updated each January.
Workplace accident and occupational illness coverage is provided through Germany's statutory accident insurance (gesetzliche Unfallversicherung), administered by industry-specific Berufsgenossenschaften.
Funded entirely by the employer — employees make no contribution — premiums set annually per employer based on industry risk classification and payroll. Covers medical treatment, rehabilitation, and compensation for workplace accidents and recognized occupational diseases, generally replacing an injured employee's right to sue the employer directly.
Germany has no general statutory right to severance pay simply upon termination. Severance typically arises from a negotiated settlement, a social plan (Sozialplan) agreed with a works council, or an individual settlement agreement (Aufhebungsvertrag).
A widely used market convention, referenced in §1a KSchG for operational dismissals, is approximately 0.5 month's gross salary per year of service. Under §1a KSchG, an employer can offer this formula in the dismissal letter in exchange for the employee not filing an unfair dismissal claim within the 3-week deadline.
A 13th (or 14th) month's salary is not legally mandated in Germany. However, a Christmas bonus (Weihnachtsgeld) and/or vacation bonus (Urlaubsgeld) are common in practice, particularly where a CBA, works agreement, or individual contract provides for it, or where it has become established company custom (betriebliche Übung).
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Your employee's hours, time off, holidays, bonuses, and commissions are automatically calculated into payroll. RemoFirst will invoice you in either US Dollars (USD), Euros (EUR), British Pounds (GBP), Canadian Dollars (CAD), Australian Dollars (AUD), or Singapore Dollars (SGD) around the 15th of each month to make sure your employees are paid on time. To make it even easier, you can summarize your entire global team's salaries to aggregate them into one payment (instead of many individual payments).
Unlike full-time employees, contractors work on projects with multiple companies at a given time and are technically self-employed. Full-time employees are solely focused on their employer and usually receive benefits (such as health insurance, equity or stock options, and time off) as an additional form of compensation. While it can be cheaper to work with international contractors instead of paying benefits to a full-time employee, you run the risk of misclassification. It's recommended to work with an EOR for contractor onboarding and payments, so you can know that your international contractors are paid compliantly and on time.
Whenever the employee or employer has a question about, or anything else related to international employment, they can speak with our customer support team to get answers from our team of experts.
