Employer of Record in Germany: 20 Providers Compared (2026)

Employing someone in Germany: key facts

German employment law is set federally and applies uniformly nationwide; the only state-level (Bundesland) variation below is in public holidays.

Minimum wage

One uniform statutory floor, no regional or sectoral variation; some sectors run a higher, collectively-agreed minimum (Mindestlohn nach Arbeitnehmer-Entsendegesetz) not covered here.

Employer contributions

Combined statutory employer contributions run about 22% of gross pay at common salary levels, split across seven separate items with different earnings ceilings (Beitragsbemessungsgrenze, BBG).

*U3’s exact assessment ceiling wasn’t independently confirmed against primary law; this figure assumes it follows the RV/ALV ceiling rather than the lower KV ceiling.

U1 (sick-pay reimbursement levy) applies only to employers with up to 30 staff, so it’s excluded here — consistent with an EOR being a large-payroll employer. Unfallversicherung has no single national rate: the figure above is a representative office/IT estimate (VBG Gefahrtarifstelle 05, Gefahrklasse 0.63), not a guaranteed rate for every hire.

Working hours and overtime

• Daily working time is capped at 8 hours; it may extend to 10 hours/day only if the 8-hour daily average holds over a 6-month reference period — a de facto 48-hour week (ArbZG §3) (dejure.org, checked 2026-09-30).
• No statutory overtime premium exists. Hours above 8/day (up to the 10-hour cap) must be balanced out with time off within 6 months; any paid premium comes from the contract or a collective agreement (Tarifvertrag), not from statute.

Annual leave and public holidays

• Statutory minimum: 24 Werktage/year on a 6-day working week (BUrlG §3), equal to 20 working days on a standard 5-day week; contractual leave of 25-30 days is market-standard (gesetze-im-internet.de, checked 2026-09-30).

Each of the 16 Bundesländer sets its own count, from 9 (federal-only) to 13 (Bavaria).

Probation

• No separate statutory “probation” status exists in the BGB; §622 Abs. 3 BGB allows a shortened 2-week notice during an agreed trial period (Probezeit) of up to 6 months (gesetze-im-internet.de, checked 2026-09-30).
• General unfair-dismissal protection under the Kündigungsschutzgesetz (KSchG) doesn’t apply until the employment relationship has run, uninterrupted, for more than 6 months — regardless of what the contract calls “probation” (gesetze-im-internet.de, checked 2026-09-30).

Notice and severance

Source: gesetze-im-internet.de, checked 2026-09-30.

• Severance is not a general statutory entitlement. The main exception, §1a KSchG: on an operational-reasons dismissal, an employer may offer 0.5 month’s salary per year of service in the notice letter, and the offer becomes a binding claim only if the employee lets a 3-week objection deadline pass (arbeitsrechte.de, checked 2026-09-30).

13th salary and bonuses

• No German statute mandates a 13th- or 14th-month payment (Weihnachtsgeld/Urlaubsgeld); where paid, it’s contractual or collectively agreed, not a legal floor (bmas.de, checked 2026-09-30).

Mandatory benefits

• Statutory social insurance — pension, health, long-term care, unemployment — see Employer contributions above.
• Entgeltfortzahlung: the employer pays 100% of salary for up to 6 weeks of an employee’s sickness per illness episode (gesetze-im-internet.de, checked 2026-09-30).
• Employees can demand salary-sacrifice pension contributions (Entgeltumwandlung); the employer must add a 15% subsidy where it saves social-security contributions on the sacrificed amount — an employee-triggered right, not an automatic cost, so it isn’t in the cost figures below (ey.com, checked 2026-09-30).

Work permits

• EU/EEA/Swiss citizens: free movement, no permit needed.
• Non-EU nationals need a residence title covering work; the Bundesagentur für Arbeit must approve the specific job and employer first in most cases.
• EU Blue Card (Aufenthaltsgesetz §18g): a job contract of at least 6 months and, for 2026, a minimum gross annual salary of EUR 50,700 (general threshold) or EUR 45,934.20 for shortage occupations, recent graduates and IT specialists without a degree (amtsdeutschland.de, checked 2026-09-30).
• An EOR, as the AÜG-licensed lender, is the formal contractual employer for immigration paperwork, but the leasing structure itself must still independently satisfy AÜG (licence, 18-month cap, disclosure) regardless of the immigration route used.

Currency and payroll

• Euro (EUR). No statutory pay frequency is mandated; §614 BGB treats a month as the default pay period, and monthly bank transfer by month-end or the 15th of the following month is standard market practice (gesetze-im-internet.de, checked 2026-09-30).

Is Employer of Record legal in Germany?

Allowed, with limits — as licensed employee leasing, not a separate EOR category. German law treats an EOR hiring someone physically based in Germany as Arbeitnehmerüberlassung under the AÜG, confirmed directly by German law firms and reaffirmed, not overturned, by a 2025-10-01 Bundesagentur für Arbeit guidance update that only relaxed the position for work performed entirely outside Germany (bakertilly.de, checked 2026-09-30).

• Licence requirement: a company that leases employees to third parties needs a permit from the Bundesagentur für Arbeit (§1 AÜG) (gesetze-im-internet.de, checked 2026-09-30).
• 18-month cap (Überlassungshöchstdauer): the same employee can’t be leased to the same client for more than 18 consecutive months; gaps of 3 months or less count toward the same assignment; a collective agreement may permit longer (§1b AÜG) (gesetze-im-internet.de, checked 2026-09-30).
• Equal pay from day one (§8 AÜG), unless a sector temp-work collective agreement applies, in which case pay may deviate for the first 9 months of that assignment (haufe.de, checked 2026-09-30).
• Disclosure and specification duty: the lender-client contract must be explicitly labelled as Arbeitnehmerüberlassung, and the specific employee to be leased must be named before the assignment starts (cmshs-bloggt.de, checked 2026-09-30).

Client risks if these aren’t met:

• Illegal leasing — no licence, missing disclosure, or exceeding 18 months — voids both the lender-client and lender-employee contracts and creates a fictitious direct employment relationship between the client and the worker from the intended start date, unless the worker opts in writing, within one month, to stay with the EOR (§9-10 AÜG) (gesetze-im-internet.de, checked 2026-09-30).
• Fines up to EUR 500,000 for unlicensed leasing or equal-pay violations, up to EUR 30,000 for exceeding the 18-month cap or missing disclosure; unlicensed leasing of foreign nationals can trigger criminal prosecution of management (gesetze-im-internet.de, checked 2026-09-30).
• Permanent establishment risk: if the leasing is found illegal, or the leased employee’s role independently meets the PE test, the foreign client can become subject to German corporate taxation (orrick.com, checked 2026-09-30).

Who actually employs your hire in Germany

Most vendors describe their entity model globally rather than confirming it for Germany specifically. Here’s what each vendor’s own Germany page — or available registry evidence — actually says:

Eleven of these 20 don’t say whether Germany is served by their own AÜG-licensed entity or a partner’s — including Rippling, Oyster and Justworks, three prominent names in the category, and several don’t mention AÜG anywhere on their Germany page at all. That matters because the AÜG licence is the one legal requirement every genuine EOR in Germany must satisfy. Before signing, ask directly: “Do you hold your own AÜG licence for Germany, and can I see it?” A vendor that names its licence and entity is a different risk profile from one repeating a global “owned + partner network” line.

How to choose an EOR in Germany

Need the clearest evidence of a licensed, own-entity employer? Deel’s German GmbH is confirmed in the commercial registry (HRB 264857), and both Deel and G-P state on their own Germany pages that they hold an AÜG licence directly — a step beyond vendors that describe AÜG only in general terms.

Hiring for longer than 18 months? The AÜG cap applies to every EOR on this page, regardless of which one you pick — RemoFirst’s own guide describes a 3-month-plus-1-day reset before the same employee can restart with a different entity. For a role meant to stay permanent, hiring the person directly avoids the cap entirely: Germany doesn’t require a local entity for that, unlike the leasing route an EOR must use.

Weighing price against disclosure? Skuad discloses the lowest Germany-specific figure, a discounted $299/month, but names no entity or licence. Deel’s EUR 300-600/month is the only euro-denominated, Germany-specific price here and comes with registry-confirmed entity evidence.

Need to sponsor a non-EU hire’s visa? The EU Blue Card needs a job contract of at least 6 months and a 2026 salary floor of EUR 45,934.20-50,700/year depending on the role. We found no vendor that confirms, on its own Germany page, whether it can act as that sponsoring employer — ask before committing to a specific visa case.

What it costs to employ someone in Germany through an EOR

The EOR, not the client, is the legal employer, and it runs payroll for many clients, so small-employer reliefs (like the U1 sick-pay levy) don’t apply. Combined statutory employer contributions run about 22% of gross at these two salary levels.

Source: computed from the rates and ceilings in the Employer contributions table above (bundesregierung.de, lohn-info.de, checked 2026-09-30). Not included: the BetrAVG 15% pension-subsidy obligation, which only arises if an employee requests salary conversion (Entgeltumwandlung), and isn’t an automatic cost.

Employer contributions on a flat EUR 45,000 salary have moved only modestly since 2021 — from about EUR 9,460/year to EUR 9,908/year in 2026, roughly a 4.7% rise — driven mostly by a higher health-insurance Zusatzbeitrag and rising contribution ceilings, not a change in the core rates (lohn-info.de, checked 2026-10-01).

The EOR’s own fee is on top of the above. Published Germany-specific numbers in our data: Deel’s EUR 300-600/month is the only euro-denominated, Germany-specific range; Skuad discloses a discounted $299/month on its own Germany page; G-P and Atlas HXM both quote a flat $599/month on their Germany pages; Borderless AI quotes $579/month. Playroll’s $199-$1,200/month and Remote People’s $300-600/month are stated as general market ranges on their own pages, not confirmed as the vendor’s own quote. Most other vendors (Remote, Justworks, Oyster, Multiplier, RemotePass, Rivermate, RemoFirst, Native Teams) publish only a global list price, and Rippling, Safeguard Global and Pebl publish no price for Germany at all.

Hidden costs: no vendor in our data publishes a Germany-specific setup fee, deposit, minimum term or termination fee. Several state a general no-fee policy globally rather than for Germany specifically: Remote says it charges no platform, onboarding or setup fees for EOR anywhere; RemoFirst and Playroll each say they have no setup fee and no minimum term globally; Borderless AI says it requires no setup fee and no security deposit globally; Justworks states “no setup fees, no minimums” as a global pricing-page claim. Where the field is blank in the table above, treat it as unpublished for Germany, not zero.

When you don’t need an EOR

• A genuinely independent contractor. See how to pay contractors in Germany and our hiring guide for the Scheinselbständigkeit (false self-employment) test that German social-security authorities apply.
• Your own German entity (GmbH). Needed if the role must sponsor a work-permit case your EOR won’t confirm it can handle, or if you want the hire employed directly with no 18-month limit and no leasing structure at all.
• A PEO. Co-employment alongside an entity you already have, rather than an EOR standing in as the sole legal employer. The only Papaya Global Germany page we found is a PEO product, distinct from its EOR offering; see our PEO glossary entry and EOR vs PEO for how the liability split differs.
• Direct hire without a local entity. Germany, unlike some countries, doesn’t require a foreign company to hold a local legal entity to directly employ staff: you can hire the person as your own employee and run payroll through a local payroll provider, without a leasing relationship, an AÜG licence, or the 18-month cap (gesetze-im-internet.de, checked 2026-09-30).

What changed in 2026

• 2026-01-01 — Statutory minimum wage rises to EUR 13.90/hour (from EUR 12.82), the largest single increase since the minimum wage’s 2015 introduction.
• 2026-01-01 — Pension/unemployment contribution ceiling (Beitragsbemessungsgrenze) rises to EUR 101,400/year; health/long-term-care ceiling rises to EUR 69,750/year.
• 2026-01-01 — Average statutory health-insurance Zusatzbeitrag rises to 2.9% (from 2.5%), pushing the effective total GKV rate to 17.5%.
• 2026-01-01 — EU Blue Card general minimum gross salary threshold set at EUR 50,700/year (shortage-occupation/graduate/IT-non-degree threshold: EUR 45,934.20/year).
• 2026-01-01 — Insolvenzgeldumlage (U3) stays unchanged at 0.15%.
• 2027-01-01 — Statutory minimum wage rises further to EUR 14.60/hour, already legislated alongside the 2026 step.

Source: bmas.de, bundesregierung.de, gkv-spitzenverband.de, migazin.de, haufe.de, checked 2026-09-30.

Numbers vendors haven’t updated

• Skuad states the post-probation notice period as a flat 1 month on its Germany page. The statutory scale under §622 BGB is longer-tenured than that: 1 month only applies at 2 years of service, rising in steps to 7 months by 20 years — Skuad’s own guide doesn’t show the full table other vendors (Rippling, RemoFirst) publish.

How we built this page

Facts were collected and checked between 2026-09-30 and 2026-10-01 against primary German sources — gesetze-im-internet.de, bmas.de, bundesregierung.de and the GKV-Spitzenverband — plus law-firm analysis (Baker Tilly, Orrick) for the AÜG legal picture. Vendor entity claims were checked against Germany’s commercial registry where possible: Deel’s GmbH is confirmed on northdata.de; no other vendor’s German entity could be independently matched there in the time available, so those are recorded as vendor statements, not registry facts. The ranking above puts confirmed, Germany-specific own entities first, then a disclosed partner, then vendors that don’t say. Nobody pays for placement on this page.