Employer of Record

Everything You Need to Know.

This page explains how Employer of Record services work in Germany, what legal and financial aspects to consider, and how to avoid common compliance risks when hiring without a local entity.

Welcome to Germany. Employment Information at a Glance

Office-Building-Tall-2–Streamline-Ultimate

Capital

Berlin

Currency

EUR

Messages-People-Person-Bubble-Circle-1–Streamline-Ultimate

Language

German

Swimming-Pool-Stairs–Streamline-Ultimate

Public Holidays

10-12

Hours

35-40

Standard VAT

19%

User-Multiple-Male-Female–Streamline-Ultimate

Population

84 Mio.

Min. Wage

13.90 EUR

Average Salary

45,800

Why Germany is Especially Complex

Germany has one of the most regulated labor markets in Europe. Strict employment protection, mandatory social security systems, and complex termination rules make compliant hiring challenging without a local legal setup.

PROTECTION

Strong Employee Protection

Hiring in Germany means navigating one of the most protective labor systems in the world — mistakes are costly.

COMPLIANCE

Complex Employment Contracts

German employment contracts follow strict legal rules, with collective agreements partially applying and adding further complexity.

REGULATIONS

Employer of Record = AÜ

In Germany, the Employer of Record model is legally classified as employee leasing (AÜ) and requires an official license.

LEGAL

Strict Enforcement of the AÜ Act

The German AÜ Act is actively enforced, with audits, fines, and significant compliance risks.

VIEW AÜ LICENSE —

Germany Employment Guide

Germany Market Overview

Employment Contracts & Working Conditions

Understanding Total Employment Costs in Germany

Employee Leave, Time Off & Statutory Benefits

Termination, Notice Periods & Compliance Requirements

What a compliant Employer of Record must handle in Germany

A compliant Employer of Record in Germany must navigate strict labor laws, complex payroll rules, and close coordination with authorities. End-to-end compliance is not optional — it’s essential.

Employment & Labor Law

Employment of your workforce in full compliance with German labor law, based on the EOR / AÜG model.

Hand-Deposit-Thin–Streamline-Phosphor-Thin

Payroll & Statutory Contributions

End-to-end payroll processing, including salary payments and the calculation and remittance of taxes and social security contributions.

Folder-Simple-User-Thin–Streamline-Phosphor-Thin

Contracts & Documentation

Preparation and ongoing management of employment contracts, contract amendments, and all required labor-law-related documentation.

Address-Book-Tabs-Thin–Streamline-Phosphor-Thin

Compliance & Authorities

Ensuring full labor-law compliance and handling coordination and communication with all relevant authorities.

Ok, I am convinced! What are the next steps?

Step 1: Tell us who you want to hire

You send us a short message outlining your hiring plan in Germany. We need to know who you want to hire, for which role, the intended start date and the planned salary.

Based on this information, we quickly assess feasibility and confirm that the setup works under German labor law.

Step 2: Receive a clear offer

You receive a transparent offer with fixed pricing. The standard monthly fee is EUR 599 per employee, plus one-time onboarding and offboarding fees.

There are no hidden costs and no percentage-based pricing. Once you confirm, we take over the setup.

Step 3: We handle contracts and compliance

worknow prepares all required contracts and statutory documents under German law.

You don’t need to deal with German legal requirements, authorities or compliance details — we manage this end to end and guide you personally through the process.

Step 4: Smooth onboarding of your employee

We coordinate the onboarding, collect all required employee data, run the mandatory safety instruction and set up payroll.
Everything is prepared so the employee can start on time and fully compliant.

Step 5: Your employee starts working

Your employee starts work as planned — legally employed in Germany through worknow.
We run payroll, handle taxes and social security and act as the local HR contact, while you stay in control of day-to-day work and performance.

Ongoing Support

Throughout the entire employment, you have a dedicated contact at worknow. We support you and your employee with payroll questions, changes and compliance, so you can focus on growing your business.

FAQs

EoR Pricing

Deposit Info

With worknow, you get the best of both worlds. EOR - Made in Germany.

Hiring an EOR provider without the necessary Agentur für Arbeit authorization can expose your business to serious risks. Under German law, you could face subsidiary liability, meaning you could be held accountable for any violations of labor, tax, or social security laws committed by your provider. This could result in hefty fines and unexpected back payments.

Get a Quote

What Can Go Wrong with the Wrong EOR

Germany is not forgiving when it comes to mistakes in employment compliance. Choosing an inexperienced or careless EOR can result in severe consequences:

Illegal Contracts

If contracts do not meet German legal standards, they can be challenged in court, leaving you exposed.

Misclassification

Treating someone as a contractor when they are an employee can result in back payments of wages, taxes, and social security contributions — plus penalties.

Unlicensed Labor Leasing

In Germany, hiring through the wrong structure without proper licenses (Arbeitnehmerüberlassungserlaubnis) can be illegal. Violations can lead to fines of up to €500,000.

Payroll Errors

Late or incorrect salary payments destroy employee trust and may violate German law.

Social security non-compliance

Failing to make mandatory contributions results in liability for both employer and employee shares, with penalties and interest.

Termination mistakes

If dismissals are not executed strictly according to German labor law, employees can sue — and German courts often side with employees.

For these reasons, companies should carefully assess an EOR’s local expertise, licensing, and operational presence before entering the German market.

Do not hesitate to contact us today for a free consulting on EoR in Germany

A compliant Employer of Record in Germany must navigate strict labor laws, complex payroll rules, and close coordination with authorities. End-to-end compliance is not optional — it’s essential.