Overview

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

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Taxes

Employer
9.30% - Pension
7.30% - Health Insurance
1.25% - Unemployment Insurance
1.525% - Nursing Care Insurance
1.18% - Accident Insurance
Employee
9.30% - Pension
7.30% - Health Insurance
1.25% - Unemployment Insurance
1.525% - Nursing Care Insurance
0.00% - Up to 9,000
14.00% - 9,000 - 55,961
42.00% - 55,961 - 265,327
45.00% - Over 265,327

Minimum Wage

General

Minimum wage in Germany is €9.35 per hour.   

Working Hours

General

Full time work is considered 40 hours weekly.

VAT

General

19% standard rate.

Mandatory Benefits

Pension Fund

› First pillar: mandatory state pension insurance (gesetzliche Rentenversicherung). This is part of the basic social security system. All employees and employers pay a percentage of salaries into this system (about 9.5% dependent on the region). › Second pillar: voluntary occupational pension insurance. › Third pillar: private insurance. Common practice for private insurance is monthly employee contribution of up to 4% their gross salary and employer contribution of 4% of the gross salary by standard plus half the percentage of the employee’s contribution (maximum 6% employer contribution in total).

Social Security

Employers contribute 20.55% of workers wages. Employees contribute 19.37% of their salary.

Termination

Termination Process

Termination is monitored by the German Employment Protection Act (Kündigungsschutzgesetz) and provides protection to employees by ensuring dismissals are justified. 

Advance Notice

An employer must notify the employee with a written notice 4 weeks prior. If the employee has been in the company for over 20 years, the termination notification period becomes 7 months.

Severance Pay

Severance payment is not mandatory if a justified reason and proper notice is 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.

Payroll

Payroll Frequency

Salaries are paid monthly.

Pay Date

The pay date in Germany is the end of the month, however, salaries are typically paid around the 25th.  

Working Hours

A work week varies between 38-40 hours. Workdays are typically 8 hours and should not exceed 10 hours.

Overtime Payment

Overtime payment is only required when stated in employees’ individual contracts or collective labor agreements.