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You are hiring someone for the first time

Hiring your first employee in Germany

Draft the employment contract correctly, understand the social-insurance notifications and wage tax, compute the employer cost, the permitted fixed term, the leave and your filing period, apply for the establishment number and file the wage tax return: 10 steps.

Start here: German employment contracts, fixed terms and working time

Understand: employment contract, immediate notification and contribution statement, wage tax

  1. Step 1 of 10
    CoursePaid individually65 min

    German employment contracts, fixed terms and working time

    What an employer in Germany must get right when hiring. The Evidence Act requires fifteen minimum items within three deadlines, on paper or, under conditions, in text form, and fines any failure. A fixed term needs an objective reason or must stay within the limits of section 14 of the Part-Time and Fixed-Term Employment Act: duration, extensions, prior employment, new businesses and older employees; without written form before work starts it is invalid. Then the Working Hours Act: the daily limit and the average, breaks, rest periods, Sunday work and record keeping. Three modules with case studies worked on the statute itself.
  2. Step 2 of 10
    CoursePaid individually44 min

    German social security reports and contribution statements

    Which events an employer must report to the collecting agency, and by when: registration and deregistration within six weeks, an interruption within two weeks, the annual report by 15 February — and in eleven sectors the immediate report no later than the first working day. The second module covers the money: contributions due on the third-last banking day, the contribution statement two working days earlier, payroll records, the pension insurance audit and the fines in section 111 of Social Code Book IV. Two modules with case studies worked on the statute itself.
  3. Step 3 of 10
    CoursePaid individually40 min

    Filing and remitting German wage tax

    The filing period follows from the wage tax remitted in the previous year: above 5,000 € monthly, up to 1,080 € annually, the quarter in between — and for a new place of business the first FULL month counts, not the partial one. Plus the liability in section 42d and the correction cut-off in section 41c. The second module covers what lowers the amount: the premiums of section 3b, the difference between an exemption limit and an allowance in section 8, and the four flat rates of section 40a. Two modules with case studies worked on the statute itself.

Compute: employer share, fixed term without cause, leave entitlement, filing period

  1. Step 4 of 10
    CalculatorFree result

    German employer social security contributions — what a gross salary really costs

    The employer bears half of each contribution: 9.3 percent pension, 1.3 percent unemployment, 1.8 percent long-term care and half of the health insurance rate including the fund's supplement. It does not bear the childless surcharge; where the place of work is in Saxony it pays 1.3 instead of 1.8 percent for care.
  2. Step 5 of 10
    CalculatorFree result

    Fixed-term contract without objective grounds — how long, how often?

    Two years and three extensions as a rule — four years for young companies, five years from age 52 after unemployment; prior employment with the same employer closes the first two routes.
  3. Step 6 of 10
    CalculatorFree result

    German statutory holiday entitlement calculator

    24 Werktage are not 24 working days: a Werktag is any day other than a Sunday or public holiday, so a six-day week. On a five-day week the entitlement is 20 days.
  4. Step 7 of 10
    CalculatorFree result

    German payroll tax filing period — month, quarter or year

    The logic is the REVERSE of VAT: here the MONTH is the rule, and you step down to the quarter and the year as the amount falls. Anyone transposing their VAT reasoning believes they file quarterly and misses nine deadlines a year.

File: establishment number, wage tax return, wage tax certificate

  1. Step 8 of 10
    FormFree15 min

    Applying for a German establishment number (Betriebsnummer) before your first hire

    From the first employee, even a mini-jobber, every establishment needs an establishment number from the Federal Employment Agency (§ 18i SGB IV). Get the accident insurer's company number first, expect the confirmation by post, and in immediate-reporting sectors have it by day one. Guide and worked example.
  2. Step 9 of 10
    FormFree15 min

    German wage tax return (Lohnsteuer-Anmeldung)

    File AND pay by the tenth day: how monthly, quarterly or yearly follows from last year's wage tax, what applies to a newly opened business, and why the duty keeps running until you notify the tax office. Guide, deadlines and worked example.
  3. Step 10 of 10
    FormFree25 min

    German wage tax certificate (Lohnsteuerbescheinigung)

    Two triggers, not one: the wage account must be closed on the ENDING of an employment relationship just as at the year end. Who receives the data, why the February deadline is not the deadline for handing it over, and what applies to household mini-jobs. Guide and worked example.

The other paths

A different procedure, the same principle: the three pillars in order.

Read in German