worknow | EoR Germany

Hire Top Talent in Germany, Compliantly and Effortlessly.

Your local Employer of Record expert for navigating German labor law with confidence. Stop letting bureaucracy slow down your growth.

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Welcome to Germany. Employment Information at a Glance

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Capital

Berlin

Currency

EUR

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Language

German

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Public Holidays

10-12

Hours

35-40

Standard VAT

19%

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Population

84 Mio.

Min. Wage

13.90 EUR

Average Salary

45,800

Germany: A Land of Opportunity... and Complex Labor Laws

Germany's thriving economy and highly skilled workforce make it a prime market for expansion. However, navigating its notoriously complex and strict labor laws can be a significant hurdle for international companies. From the Arbeitnehmerüberlassungsgesetz (AÜG) to intricate social security contributions and rigid data protection (GDPR) rules, a single misstep can lead to costly fines and legal disputes.

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.

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Payroll & Statutory Contributions

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

Contracts & Documentation

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

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Compliance & Authorities

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

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

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.

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.

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.

FAQs

What does Employer of Record mean at worknow?

An Employer of Record (EOR) enables companies to employ staff in another country in a fully compliant manner without setting up a local legal entity. worknow operates exclusively in Germany and acts as the legal employer for employees hired in Germany on behalf of foreign companies.

Where employees are hired and perform their work in Germany, Employer of Record arrangements fall under Germany’s labour leasing framework. According to the prevailing legal view, EOR models with a German nexus qualify as labour leasing (Arbeitnehmerüberlassung). For this reason, worknow operates its EOR services accordingly and holds the required AUG licence issued by the German Federal Employment Agency.

Based in Berlin, with in-depth knowledge of German labor, tax and social security law and the required legal authorizations, worknow ensures that employment in Germany is fully compliant. Our approach focuses on personal support, clear processes and direct accessibility.

Which services does worknow provide as an Employer of Record?

worknow assumes all legal and administrative employer responsibilities in Germany. This includes the preparation of compliant German employment contracts, full payroll processing, payment of taxes and social security contributions and all required filings with authorities and social security institutions.

Day-to-day management and operational collaboration with the employee remain fully with the client company.

How does payroll work at worknow?

As Employer of Record, worknow bears full responsibility for accurate and timely payroll in Germany. Salaries are paid on time, all statutory deductions are correctly processed and all reporting obligations are fulfilled.

This allows foreign companies to employ staff in Germany without having to deal with the complexity of German payroll, tax and social security regulations themselves.

What are the costs of using worknow?

worknow’s standard monthly EOR fee is EUR 599 per employee. This fee covers ongoing Employer-of-Record services, including payroll, compliance and administrative support.

In addition, a small one-time onboarding fee and a one-time offboarding fee apply. All costs are communicated transparently before the start of the engagement. worknow does not charge hidden fees or percentage-based fees on employee salaries.

Can I hire employees in Germany without an Employer of Record?

worknow is not a global platform provider, but a Germany-focused Employer of Record. With a clear regional focus, a Berlin headquarters and personal support, worknow offers a significantly higher level of legal certainty than broadly positioned international providers.

Instead of anonymous workflows, you work with dedicated contacts who understand German labor law and take your specific situation into account.

How does worknow differ from international EOR providers?

Instead of anonymous workflows, you work with dedicated contacts who understand German labor law and take your specific situation into account.

AUG Licence

As part of the licensing process, the Federal Employment Agency conducts regular and comprehensive reviews of a provider’s reliability, financial stability, and full compliance with wage payments and social security contributions. An indefinite AUG licence is only granted after several years of audits without any objections, making it a strong indicator of long-term compliance and operational stability.

Is there a minimum or maximum duration for employment with worknow?

There is no minimum duration for employment with worknow.

Under German law, employment within an Employer-of-Record / employee leasing setup is subject to a maximum duration of 18 months. worknow ensures that this statutory limit is observed and supports you in structuring the engagement accordingly.

If longer-term employment in Germany is planned, worknow is happy to advise on alternative, compliant setups.

Can worknow provide a company car or fuel card?

No. As an Employer of Record, worknow does not provide company cars or fuel cards.

Due to the limited duration of EOR arrangements and the financial, legal and tax risks associated with vehicle leasing, this is not feasible. As an alternative, clients may arrange a vehicle directly, for example through a long-term rental. Where applicable, worknow can reflect private-use taxation or mileage reimbursement in a compliant way via payroll.

Bonus Payments & Incentives

Can we include bonus agreements in the employment contract?

To maintain maximum flexibility and a clear separation of legal liability, worknow GmbH does not fix any performance-related bonus entitlements in the primary employment contract.

Our role is to provide a compliant platform for your international or local hiring needs.

Regarding incentives, we operate under the following principles:

Discretionary Nature: Any rewards or incentives are treated as purely discretionary payments initiated by the client. These are not part of the core contractual salary obligations of worknow GmbH.
The Pass-Through Model: We act solely as a technical processing agent. A payout can only be facilitated if the client explicitly requests it and provides the necessary funds in advance.
Budgeting for Ancillary Costs: Please be aware that the total cost for a bonus includes the gross amount plus approximately 25% in employer-side contributions (social security, etc.).
Execution only upon Funding: worknow GmbH will process the payment through the next available payroll once the full amount (including all employer costs) has been secured.

The Benefit: This structure ensures that you retain full control over your budget on a month-to-month basis without creating long-term legal precedents or fixed contractual liabilities for either party.

How does the collaboration with worknow start?

Getting started with worknow is simple.

You send us a short email outlining your hiring plans in Germany, including who you want to hire, for which role, the intended start date, the planned salary and the expected duration of employment.

Based on this information, worknow reviews feasibility and, in most cases, completes the entire setup within 3–5 business days. Where required, we are also able to progress steps over weekends to meet tight timelines. Throughout the process, you are supported by a dedicated contact to ensure a compliant, transparent and straightforward setup.

Don't Just Be Compliant. Be Confident.

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.