COUNTRY GUIDE
A short guide to building a dedicated offshore team in Germany
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Berlin
German
83.29 million
GMT+2
900,000+
Euro (EUR)
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$133.12B
$11.4B
Berlin
German
83.29 million
GMT+2
900,000+
Euro (EUR)
$133.12B
$11.4B
Germany is a major player in the global IT sector, situated at the heart of Europe. The country has a strong commitment to technological and engineering excellence, producing 40,000 engineering graduates annually and establishing itself as a leader in technological innovation.
Berlin, the capital, is a hub of tech innovation with state-of-the-art innovation centers, prominent tech conferences, and groundbreaking startups attracting talent from diverse tech fields, from software engineering to Industry 4.0 solutions.
The German IT industry is projected to grow at a CAGR of 7.8% from 2023 to 2028, thanks to its expansive ecosystem of tech enterprises and cutting-edge research facilities. With over 900,000 developers, Germany is a dominant force in the global IT service provider market.
The country's culture of precision and its workforce's commitment to both innovation and efficiency further solidify its position as a premier tech hub in Europe. Given its central location, renowned engineering expertise, and drive for tech advancement, Germany is an ideal destination for businesses seeking unparalleled software development expertise.
Payroll Cycle
In Germany, employees typically receive their pay once a month, usually on or around the 25th of the month, though the exact pay date is determined by the individual employment contract.
Employer Taxes
20.645%
Overtime Pay
Overtime work should adhere to the maximum working hours specified in the employee's contract or collective agreement. Two prevalent forms of overtime exist in Germany:
Paid Leave
Employees in Germany have a statutory minimum annual leave entitlement of 20 working days for those working a standard 5-day week and 24 working days for those on a 6-day week, as established by the Bundesurlaubsgesetz, or the Federal Holidays Act. Starting in 2023, employees in Germany can roll over their unused vacation days for up to three years.
This paid leave entitlement is referred to as Urlaubsanspruch. The specific number of Urlaubstage (holiday days) is detailed in the employment contract or in a collective agreement (Tarifvertrag), which varies based on the industry. Notably, many collective agreements grant employees up to 30 working days of leave. Moreover, those working in hazardous or high-risk fields often receive extra vacation days.
Sick Leave
Employees who have been with their employer for at least four weeks before taking sick leave are entitled to sick pay. For the initial six weeks of sickness, they receive 100% of their regular salary (known as Entgeltfortzahlung bei Krankheit oder Kur). After this period, the health insurance fund (Krankengeld) steps in, compensating the employee with between 70% and 90% of their regular wage for up to 78 weeks over a span of three years. This is specifically for cases where the incapacity is due to the same illness, starting from the initial day of sickness. The exact percentage of compensation depends on the specific level of the insured employee's fund.
Public and Provincial Holidays
There are 9 national holidays in Germany. Other additional holidays may apply depending on the region.
Notice Period
Generally, in Germany, the notice periods are set at four weeks. However, these periods are outlined in the employment contract or collective agreement and are determined based on the duration of the employee's service as follows:
Up to 2 years - 4 weeks (per the 15th or last day of the month)
2 to 4 years - 1 month
5 to 7 years - 2 months
8 to 9 years - 3 months
10 to 11 years - 4 months
12 to 14 years - 5 months
13th Month Bonus
In Germany, it's customary to receive a 13th-month salary, which is typically paid on the December pay date.
Forming a separate business entity in Germany where you plan to establish a team can be demanding and bring about substantial legal expenses.
Simultaneously, interpreting German labor laws and meeting employee expectations can present complex and onerous challenges. The complexity is further increased by the need to acquire accurate and up-to-date employment information for Germany. In addition, managing contracts and overseeing invoices through email and spreadsheets can lead to disorganization and errors.
In this context, compliance is essential, and it's imperative to adhere to German regulations, notably concerning taxes and legal matters.
AALLSTARSIT simplifies this process by offering a comprehensive staff augmentation solution for identifying and hiring employees in Germany, handling HR and payroll, and ensuring compliance is automated.
Choose the right expert professionals required for your specific project, saving time and wasted effort.
This service enables software development companies worldwide to meet any technical needs outside their core skill set by adding specialized staff on demand while retaining control of the project's specifications and scope.
Establish R&D / Tech Support / QA & Testing / DevOps / Data Entry Centers in your chosen location.
Forget about investing in facilities, equipment, technology, or human resources. We manage all necessary operations as your specialist. This can help you save money and resources, all while reducing frustration and simplifying internal processes.
Use ALLSTARSIT as your EOR / CM to easily hire employees in new countries without setting up a legal entity.
We act as the employer for your new hire, handling all HR, payroll, tax, and compliance requirements on your behalf, while you maintain control of their workload.
Effortlessly Access Expert Tech Support for Your Projects
Our Tech Support service provides companies worldwide with access to the best technical experts tailored to their specific project needs. Whether you require troubleshooting, maintenance, or specialized assistance, we ensure that you have the right professionals on hand to support your endeavors effectively.
Maximize Your Customer Satisfaction Level with Our Customer Support Service
Access tailored customer care solutions for your business needs. Our expert team is dedicated to addressing inquiries, resolving issues, and delivering personalized assistance. Say goodbye to challenges and hello to exceptional customer care with us.
AI/ML and Data annotation projects with specialized talent tailored to your needs, ensuring efficiency and precision.
This service helps businesses worldwide enhance their AI/ML and Data annotation capabilities by providing skilled professionals on demand, enabling you to scale seamlessly while maintaining full control over your project’s direction and outcomes.
Contact us, and we’ll help you hire the best tech talent in Germany
