Business
Germany — Business: Hiring Employees
Employing staff in Germany requires registering with statutory health insurance and social security systems, deducting Lohnsteuer (wage tax) and social contributions from payroll, and complying with the E-Rechnung (electronic invoice) mandate that went live 1 January 2025 requiring all B2B companies to receive structured invoices. Total employer social security contributions run approximately 21% on top of gross wages (pension 9.3%, health insurance 7.3%+avg 2.9% Zusatzbeitrag split, unemployment 1.3%, nursing care ~1.8%). Contribution assessment ceilings for 2026 are €5,812.50/month (€69,750/year) for health/long-term care insurance and €8,450/month (€101,400/year) for pension/unemployment insurance.
VerifiedGovernment / official sourceGTAI (Germany Trade & Invest) Social Insurance SystemLast reviewed: 2026-07-20
Key facts
- Total employer social security contribution: ~21% on top of gross wages.
- 2026 contribution assessment ceilings: €5,812.50/month (€69,750/year) for health/nursing care; €8,450/month (€101,400/year) for pension/unemployment insurance.
- E-Rechnung (electronic invoice) mandate went live 1 January 2025 — all B2B companies must be able to receive structured invoices.
- Employers must register new hires with statutory health insurance and social security systems before or on their start date.
Costs
- Total employer social security contribution: ~21% of gross wage
Required documents
- Employment contract (Arbeitsvertrag)
- Health insurance registration
- Tax ID (Steuer-ID) and social security number for the employee
Common mistakes
- Underestimating total employment cost by only budgeting gross salary — employer social security contributions add roughly 21% on top.
- Not being set up to receive structured E-Rechnung invoices, which has been mandatory for B2B transactions since 1 January 2025.