Germany has one of the most complicated labour laws which can be extremely hard to comply with. Especially for the newcomers. Hiring in this country places a number of obligations on you. The employer must, amongst other things, deduct taxes and insurance, give them a certain amount of vacation days and many more.
So where do you start? We have created the checklist of the minimum duties required in order to legally employ in Germany.
Register with the Federal Agency of Employment
The first thing to do when hiring in Germany is to register as an employer with the Federal Agency of Employment. After enrolling your first employee, you will receive a company number under which all reports to the health insurance shall be made. Luckily, it is a fairly straightforward procedure: you can register as an employer online.
Secondly, it is your responsibility as an employer to check that each potential recruit has the legal right to work in Germany. All non-EU citizens must have a work permit before entering any employment agreement. Failure to comply with the local immigration law may result in in civil or criminal penalty.
Contact us regarding the information on the documents proving the right to work in Germany.
Get Tax Identification number
Every employee, regardless whether they are a German citizen or not, is subject to income tax. Again, it is employer’s responsibility to calculate the income tax amount for each employee and supply the withheld amount to the authorities. Therefore, it is important to get employee’s Tax Identification number and register as an employer with tax authority before the first pay day.
Written Work Contract
It is equally important to provide your employees with a written work contact that includes all the employment particulars. This should be done within one month after the employee’s start date. However, when employing an intern, the agreement has to be provided prior the start date.
The last but not the least important point is that as an employer you are ought to give your staff itemised pay statements with the details of the gross and net pay they receive on or before the pay day.
Even though the process seems pretty straightforward, hiring in Germany can be a true struggle for you HR department. Bradford Jacobs offers a number of simple and cost-effective solutions to address your payroll in Germany or any other country, immigration and tax challenges. Contact us today to find out how we can assist with your business needs.