The estimated employer cost in Germany is approximately 27.05% on top of gross salary. The main components are set out in the table below.
| Component | Notes |
| Retirement pension | Employer contributes 9.3% toward the statutory pension scheme. |
| Unemployment insurance | Employer contributes 1.3% toward the federal unemployment fund. |
| Healthcare | Employer contributes 7.3% base rate, plus approximately 1.75% toward the additional contribution depending on the employee's chosen health insurer. |
| Long-term care insurance | Mandatory contribution covering nursing and long-term care benefits. |
| Work accident insurance | Rate varies by sector and is set by the relevant statutory accident insurance association. |
| Insolvency fund | Small employer contribution to the wage guarantee fund in the event of employer insolvency. |
| The exact employer cost varies depending on the employee's chosen health insurer, salary level, and sector classification. Danbro International will confirm applicable rates during client onboarding. |
The following statutory benefits apply to all employees in Germany and are included within the standard cost structure:
• Statutory health insurance covering medical treatment, sick pay, maternity benefits, and related healthcare costs
• Statutory pension insurance providing retirement, survivor, and disability pension coverage
• Statutory unemployment insurance covering benefits in the event of job loss
• Long-term care insurance covering nursing and care needs
• Statutory accident insurance covering workplace injuries and occupational illness
Germany operates two distinct employment structures through Danbro International, each with different fixed-term rules:
• SGG Consulting GmbH (consulting entity): fixed-term contracts are permitted for a maximum of two years. At the end of the fixed term, employment may be converted to an indefinite arrangement without interruption.
• WF Safeguard GmbH (AUG staff leasing licence): fixed-term assignments are capped at 18 months under the Arbeitnehmerüberlassungsgesetz (AUG). Extensions beyond this threshold require prior agreement.
| The choice of employing entity in Germany is a meaningful one for clients. Danbro International will advise on the most appropriate structure based on the role type, duration, and client requirements during onboarding. |
Annual leave and public holidays
The statutory minimum annual leave entitlement in Germany is 20 days per year based on a five-day working week. In practice, 25 to 30 days is the market norm for professional roles.
Where an employee's tenure ends in the first half of the year (January to June), accrued leave is calculated on the basis of each completed month of service rather than the full calendar year.
Public holidays in Germany in 2026 (national days; state-level holidays vary):
| Date | Holiday |
| 1 January 2026 | New Year's Day |
| 6 April 2026 | Good Friday |
| 9 April 2026 | Easter Sunday |
| 10 April 2026 | Easter Monday |
| 1 May 2026 | Labour Day |
| 18 May 2026 | Ascension Day |
| 29 May 2026 | Whit Friday |
| 3 October 2026 | German Unity Day |
| 25 December 2026 | Christmas Day |
| 26 December 2026 | Boxing Day |
| Germany has 16 federal states, each with additional public holidays. The number of public holidays an employee observes will depend on the state in which they are based. Danbro International will confirm applicable holidays during onboarding. |
Probation periods in Germany can range from zero to six months. Six months is the standard for most professional roles.
During the probationary period, a reduced notice period of two weeks applies for both employer and employee. This shorter notice period does not apply once the probation period has concluded.
During probation, the statutory notice period is two weeks. Outside of probation, the minimum notice period is one month, which may be extended by agreement with the client.
Statutory notice periods increase with length of service as follows:
• Less than 2 years: 4 weeks to the 15th or end of the month
• 2 years: 1 month to the end of the month
• 5 years: 2 months to the end of the month
• 8 years: 3 months to the end of the month
• 10 years: 4 months to the end of the month
• 12 years: 5 months to the end of the month
• 15 years: 6 months to the end of the month
• 20 years: 7 months to the end of the month
| Contractual notice periods may exceed the statutory minimums. Danbro International will confirm the applicable notice period based on the employee's service record and contract terms prior to any termination action. |
In Germany, an employer's freedom to dismiss an employee is significantly restricted by the Kündigungsschutzgesetz (KSchG), the employment protection act. This applies to employees who have completed more than six months of continuous service with an employer of more than ten employees.
Termination must meet one of the following legal grounds:
• Personal reasons (e.g., long-term incapacity to perform the role)
• Conduct-related reasons (e.g., serious or repeated misconduct following prior warnings)
• Operational reasons (e.g., genuine redundancy or restructuring)
Where a works council (Betriebsrat) exists, it must be consulted before any dismissal is issued. The written dismissal notice must be signed by the employer and received by the employee to be legally valid.
| Termination in Germany carries significant legal risk if not properly documented and procedurally compliant. Danbro International strongly recommends engaging our in-country HR team at the earliest stage of any contemplated termination. |
There is no statutory severance pay obligation in Germany. However, severance is commonly agreed as part of a mutual termination agreement (Aufhebungsvertrag) or as a result of an employment tribunal settlement.
As a general reference point, courts tend to apply an informal benchmark of half a month's gross salary per year of service when assessing reasonable severance. This is not a legal entitlement but is widely used in practice.
• All accrued and unused annual leave must be paid out at termination.
• Where termination occurs in the first half of the calendar year, leave entitlement is calculated on the basis of completed months of service.
| Severance terms in Germany are typically negotiated. A full cost modelling exercise is recommended before initiating any termination or mutual separation process. |
The following supplemental benefits can be arranged for employees in Germany as part of a competitive total compensation package. These benefits represent an additional cost to the client:
• Private health insurance (supplementary to statutory cover)
• Life insurance
• Accidental death and dismemberment (AD&D) insurance
• Short-term disability (STD) insurance
• Long-term disability (LTD) insurance
• Long-term care insurance (supplementary to statutory cover)
• Occupational pension scheme
Danbro International supports immigration requirements for employees relocating to Germany. Immigration services are available as part of our employer of record offering and represent an additional cost to the client.
Common permit types relevant to employer of record engagements include:
• EU Blue Card: available to highly qualified non-EU nationals meeting the applicable salary threshold
• General employment permit (Aufenthaltserlaubnis zur Beschäftigung): for roles not meeting Blue Card criteria
• Intra-company transfer permit: for employees relocating within a multinational group
| Please raise any immigration requirements with your Danbro International account team at the earliest opportunity so that timelines, documentation requirements, and costs can be confirmed. Processing times vary significantly depending on permit type and applicant nationality. |
The standard pay cycle for employees in Germany processed through Danbro International is monthly. Salaries are paid on the last working day of each month.
The 2026 payroll processing schedule is set out below.
| Month | Changes due | Invoice client | Employee pay day |
| January | 29 January 2026 | 29 January 2026 | 29 January 2026 |
| February | 26 February 2026 | 26 February 2026 | 26 February 2026 |
| March | 30 March 2026 | 30 March 2026 | 30 March 2026 |
| April | 28 April 2026 | 28 April 2026 | 28 April 2026 |
| May | 28 May 2026 | 28 May 2026 | 28 May 2026 |
| June | 29 June 2026 | 29 June 2026 | 29 June 2026 |
| July | 29 July 2026 | 29 July 2026 | 29 July 2026 |
| August | 27 August 2026 | 27 August 2026 | 27 August 2026 |
| September | 28 September 2026 | 28 September 2026 | 28 September 2026 |
| October | 28 October 2026 | 28 October 2026 | 28 October 2026 |
| November | 27 November 2026 | 27 November 2026 | 27 November 2026 |
| December | 22 December 2026 | 22 December 2026 | 22 December 2026 |
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