Overview

Capital
Berlin
Currency
Euro (EUR)
Date Format
dd/mm/yyy

COVID-19

Additional statutory health insurance increases to 1.3%.

Taxes

Employer

Employer Payroll Tax

9.30%
General Pension
1.20%
Unemployment Insurance
7.90%
Health Insurance
0.60%
Accident Insurance
1.525%
Care Insurance
0.55%
Maternity Leave
0.12%
Insolvency Charge
21.195% Total Employment Cost
Employee

Employee Payroll Taxes

9.30%
Pension
7.90%
Health Insurance
0.25%
Additional contribution to long-term care insurance for childless
1.20%
Unemployment Insurance
1.525%
Care Insurance
20.175% Total Employee Cost

Employee Income Tax

0.00%
Up to 99,744 EUR
14.00%
9,744-14754 EUR
42.00%
14754- 274,612 EUR
45.00%
274,612 EUR and over
Employer Taxes
3 HIGHEST
3 LOWEST
Brazil
China
Slovakia
Germany
South Africa
Georgia
Macedonia
82.39%
41.12%
37.2%
21.195%
2%
2%
0%
Employee taxes
3 HIGHEST
3 LOWEST
Romania
Macedonia
Netherlands
Germany
Georgia
Belarus
Ukraine
45%
28%
27.65%
20.175%
2%
1%
0%

Minimum Wage

General

The minimum wage in Germany is €9.50 per hour.

July 1, 2021 minimum wage will be raised to €9.60 per hour.

 

Minimum wage (per month)
$4000
$2663
$2491
$1918
$47
$36.80
$2.33
Geneva
Luxembourg
Australia
Germany
Malawi
Angola
Venezuela
3 HIGHEST
3 LOWEST

Payroll

Payroll Cycle

Salaries are paid monthly at the end of the month, typically around the 25th.

13th Salary

13th salaries are not required, however, are sometimes outlined in collective bargaining agreements.

Working Hours

General

38-40 hours average per week, up to 48 hours in exceptional cases. Workdays are typically 8 hours and should not exceed 10 hours.

Overtime

Overtime payment is required when stated in employees’ individual contracts or collective labor agreements. The statutory maximum weekly working time is 48 hours. The regular daily working time may be extended up to 10 hours, provided that on average 8 hours per working day are not exceeded within a reference period of 6 months or 24 weeks.

Leave

Paid Time Off

Minimum of 20 working days (with respect to a 5-day working week). Most employers grant 25-30 days per year. Normally, the employee must use his vacation days during each calendar year. Unless otherwise stated by the employer, the vacation days may be carried over until March 31st of the following calendar year. If any unused vacation days are left upon the termination of employment, the employer will compensate the employee for the unused days.

Vacation days
Public holidays
3 HIGHEST
3 LOWEST
Brazil
Peru
Albania
Germany
Michigan
China
Federal
30
13
43
30
12
42
28
14
42
25
9
34
2
11
13
5
7
12
10
10
Public Holidays

German holidays differ based on the state. However, there are 9 national holidays that all states follow.

Sick Days

The first 6 weeks of sick leave are covered by the employer and is paid at the rate of 100% of the regular salary. After 6 weeks, any additional payment will be paid by the health insurance (the amount will not be the full salary and will be determined according to personal criteria). Employees must notify their employers that they are ill if they take leave and must submit a doctor’s note if the leave is longer than three days.

Maternity Leave

Mothers are entitled to 6 weeks leave at full pay prior to their child’s birth, and 8 weeks at full pay after birth. In the case of premature or multiple births, 12 weeks paid leave is permitted After birth.

During such maternity leave, the employer will continue the pay the employee’s salary, and the health insurance company shall fully reimburse the employer.

PAID MATERNITY LEAVE (DAYS)
410
365
365
98
45
30
0
Bulgaria
Serbia
Albania
Germany
United Arab Emirates
Tunisia
Federal
3 HIGHEST
3 LOWEST
Paternity Leave

Paternity leave falls under the parental leave.

Parental Leave

Parental leave is 36 months and can be divided as between the parents as they see fit. The eight weeks of maternity leave (after labor) are counted as part of this leave. In the case of the mother, the parental leave starts after maternity leave stops. During parental leave, parents can choose to work part-time up to 30 hours per week.

At least 12 months of the parental leave must be taken within the first 3 years after labor – the rest 24 of these 36 months can be taken until the child reaches the age of 8. Parental leave does not start automatically, it must be requested in writing or submitted to the employer at least seven weeks before the start of the parental leave.

Other Leave

No additional mandatory leave

Termination

Termination Process

All employees are protected by the German Termination Protection Act after the first 6 months of employment. The employer should have a specific reason to dismiss an employee, and there are different types of reasons (related to the personal situation of the person to be dismissed, related to the behavior of the person to be dismissed, related to the employer’s business).

A dismissal notice must be in writing and signed by the employer’s authorized representative. Generally, terminating employment in Germany, without the employee’s consent is a complex process, hence many termination processes are made under mutual agreement.

Notice Period

The notice period should be at least 4 weeks and increases according to the length of service as follows:

  • At least 2 years of employment: 1 months’ notice
  • 2-5 years of employment: 2 months’ notice
  • 5-8 years of employment: 3 months’ notice
  • 8-10 years of employment: 4 months’ notice
  • 10-12 years of employment: 5 months’ notice
  • 12-15 years of employment: 6 months’ notice
  • 15-20 years of employment: 7 months’ notice
Severance Pay

Severance payment is not mandatory if a justified reason and proper notice are given for the termination. However, severance payment must be given for termination caused by operational changes. When severance payment is given, it is a half month of the employee’s regular wage for every year the employee was in the company.

Probation Period

The probation period is up to 6 months and is subject to mutual agreement between both parties.

VAT

General

19% standard rate.

Version History

January 1, 2021
Additional statutory health insurance increases to 1.3%.

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    Questions & Answers

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    Robyn W.
    Robyn W.
    6 months ago

    Is it mandatory to provide employees with private health insurance?

    Erez Greenberg
    Admin
    6 months ago
    Reply to  Robyn W.

    Health insurance coverage is mandatory but it can be either public or private insurance
    and typically depends on the salary and personal preference of the employee.

    Klaus Lutz
    Klaus Lutz
    6 months ago

    What are the rules on vacation carry over? 

    Emily Kuhnert
    Admin
    6 months ago
    Reply to  Klaus Lutz

    Leave in Germany is supposed to be continuous unless the leave would interfere with the employer’s urgent operations.
    In this case, leave can be split up, with one vacation being at least 12 consecutive days. In general, leave must be taken within the same calendar year that it is accrued, however, if operations of the company or personal reasons of the employee prevent the leave being taken, leave can be carried over to the next year but must be used within the first 3 months.

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