EOR - Made in Germany.
FAQs for Employer of Record Services
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?
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.
AUG Licence
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.
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.
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.
How do we start the process...?
Which information do you we need to get started?
The process starts with a short email from you to worknow outlining your planned hire in Germany. To assess feasibility and ensure compliance, we ask you to provide the following information:
- The name of the person you would like to hire,
- Is this person a citizen of Germany or the EU
- the position and a short description of the role
- and responsibilities,
- the intended start date,
- the planned duration of employment (end date),
- the agreed gross salary
- and the number of annual vacation days.
Please note that in Germany, employer social security contributions amount to approximately 25% on top of the gross salary.
In addition, employment under an Employer-of-Record / employee leasing model is legally limited to a maximum duration of 18 months.
Based on these details, worknow reviews the request and prepares the next step.
How does pricing work at worknow?
worknow charges a fixed monthly EOR fee of EUR 599 per employee. In addition, a one-time onboarding fee of EUR 199 and a one-time offboarding fee of EUR 199 apply.
No further regular costs arise. Additional charges only apply in exceptional cases and subject to prior agreement, for example if an unusually high volume of expense receipts or complex travel expense processing is required.
Which contracts and documents are required under German law?
Several contracts and statutory documents are required.
- First, an EOR service agreement is concluded between worknow and the client, defining scope, responsibilities and commercial terms.
- Second, German law requires a separate employee leasing agreement (Arbeitnehmerüberlassungsvertrag). This document specifies which employee is assigned, for which role and under which professional requirements.
- Third, an Equal Pay declaration must be completed. Under German law, leased employees must receive the same remuneration and core working conditions as comparable permanent employees from day one. If no comparable employee exists in Germany, a hypothetical comparable role is used as the reference.
worknow prepares and guides you through all required documentation.
How is the Employee onboarded?
During onboarding, worknow collects all legally required employee data via a personnel questionnaire. This includes, for example, the social security number, health insurance provider and bank details.
We also conduct a mandatory safety instruction, which is provided online and documented in accordance with German regulations.
The German employment contract is then sent to the employee for signature. Due to statutory written-form requirements, the contract must be signed physically and returned to worknow before employment can formally commence.
Security deposit invoice
Why is a security deposit required?
Before the employment starts, worknow issues a security deposit invoice. The security deposit corresponds to 1.5 months of the employee’s total employment cost, consisting of the gross salary plus approximately 25% employer social security contributions.
The security deposit ensures that all statutory and contractual employment obligations can be fulfilled at all times, particularly in connection with the termination of an employment relationship.
Under German employment law, termination may give rise to mandatory costs beyond the regular monthly salary, including:
- salary payments during the statutory notice period, which may exceed four weeks after six months of employment, and
- financial compensation for accrued but unused vacation, which must be paid out as part of the final payroll.
- The security deposit provides a financial safeguard to cover these obligations and ensures that employee payments can be made without interruption, even in the event of early termination or unexpected changes.
The deposit is fully refundable and is credited against the final payroll and settlement at the end of the employment. Any remaining balance is returned once all statutory payments and social security contributions have been completed.
see all information on deposits here
Can worknow provide a company car?
No. While we are frequently asked about company cars, providing vehicles is not feasible within a typical Employer-of-Record setup.
The limited duration of employee leasing arrangements, combined with the financial and legal risks of long-term leasing contracts, makes company cars impractical. In addition, the tax and accounting treatment of company cars in Germany is complex and would significantly increase administrative overhead.
For these reasons, worknow does not provide company cars or fuel cards.
What are the alternatives for mobility?
As an alternative, we recommend that the client arranges a long-term rental or lease directly. Where applicable, worknow can reflect the private-use component correctly via payroll to ensure compliant taxation under German law.
If employees use their private vehicle for business travel, German law allows a reimbursement of EUR 0.30 per business kilometer driven. Subject to prior alignment with the client, worknow can process this mileage reimbursement via payroll in a compliant manner.
Why is this handled so strictly?
worknow’s approach prioritizes compliance, transparency and risk mitigation. By clearly defining what is and is not feasible within an EOR setup, we avoid hidden risks, unexpected tax exposure and administrative complexity for our clients.
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info@w-now.de
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