Expanding your team into Europe's strongest economy can be a smart strategic move. Germany offers a highly skilled workforce, strong infrastructure, and access to the broader EU market. However, hiring in a new country involves understanding local labor laws, tax regulations, and compliance requirements. In this guide, we'll explore how international companies can successfully recruit employees in Germany and how WorkMotion can simplify the process.

Why Hire in Germany?

how to hire employees in germany  is one of Europe's largest and most stable economies. With major business hubs like Berlin, Munich, and Frankfurt, the country attracts top talent across industries such as technology, engineering, automotive, and finance.

Key advantages include:

• Highly educated and skilled workforce

• Strong employee protections and structured labor system

• Access to the European Union market

• Advanced infrastructure and digital ecosystem

However, strict employment regulations mean businesses must follow detailed legal procedures when hiring.

Understanding German Employment Laws

Germany has comprehensive labor laws designed to protect employees. Employers must comply with regulations covering:

1. Employment Contracts

Written employment contracts are standard practice. These contracts typically include:

• Job role and responsibilities

• Salary and payment schedule

• Working hours

• Notice periods

• Probation period (usually up to six months)

2. Working Hours

The standard workweek in Germany is 40 hours. Overtime is regulated and often compensated with additional pay or time off.

3. Minimum Wage

Germany has a legal minimum wage that employers must meet. This rate may change annually, so staying updated is crucial.

4. Social Security Contributions

Employers and employees both contribute to social security, which covers:

• Health insurance

• Pension insurance

• Unemployment insurance

• Long-term care insurance

• Accident Insurance

Employers are responsible for registering employees with the appropriate authorities.

Hiring Options for Foreign Companies

When expanding into Germany, businesses typically have two main options:

Option 1: Establish a Legal Entity

Setting up a German subsidiary directly allows you to hire employees. However, this process can be time-consuming and costly. It involves:

• Company registration

• Opening a local bank account

• Tax registration

• Ongoing compliance and reporting

Option 2: Use an Employer of Record (EOR)

An Employer of Record allows you to hire employees in Germany without opening a local entity. The EOR legally employs the worker on your behalf while you manage daily operations and performance.

This is where WorkMotion becomes a valuable partner.

How WorkMotion Simplifies Hiring in Germany

WorkMotion provides an Employer of Record service that handles:

• Employment contracts compliant with German law

• Payroll processing

• Tax and social security contributions

• Benefits Administration

• Ongoing compliance management

This approach reduces administrative burden and legal risks while allowing you to focus on growing your business.

Step-by-Step Process to Hire in Germany

Here's a simplified process when using an EOR like WorkMotion:

1. Select the Candidate – Identify the right talent for your team.

2. Offer & Contract Preparation – The EOR prepares a compliant employment agreement.

3. Onboarding – The employee is registered with German authorities.

4. Payroll & Compliance Management – ​​The EOR manages monthly payroll and contributions.

5. Ongoing Support – Continuous compliance monitoring and HR support.

This streamlined model enables faster market entry compared to establishing a local entity.

Key Considerations Before Hiring

Before hiring employees in Germany, consider:

• Collective bargaining agreements (if applicable)

• Works council regulations in larger companies

• Data protection compliance under GDPR

• Notice periods and termination rules

German employment law strongly protects employees, so proper legal structuring is essential.

Final Thoughts

Hiring in Germany offers access to exceptional talent and a strong European market presence. However, navigating labor laws, tax systems, and compliance requirements can be complex for foreign companies.

Partnering with an experienced Employer of Record like WorkMotion allows businesses to expand confidently and efficiently—without the need to establish a local entity.