Employment contracts in Germany.

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Standard employment contract in Germany: Open-ended contract

In Germany, open-ended contracts are the most common type of employment contract. These are ongoing contracts with no end date and can be full-time or part-time.

Alternative employment contract in Germany: Fixed-term contract

In Germany, a fixed-term contract permitted under the law, but is less common than the open-ended contract. A fixed-term contract, unlike the open-ended contract, has an end date and it is therefore easier to have a day that it is possible to terminate the employee and not rehire.

Are there other types of employment contracts in Germany?

Yes. In addition there are contracts for so-called ‘Mini-jobs’ & ‘Midi-jobs’

A Mini-job is a work contract where the employee earns no more than 520 euros a month (520-Euro-Minijobs) or works for less than three months or 70 days per year (Kurzfristige Minijobs). These can be the main form of income or an additional form of income.

Individuals with a mini-job you are not required to pay income tax or social security contributions. Note, however, that employees in these roles have the same employment rights as other employees, including sickness benefits and holiday pay.

Midi-jobs are where an individual earns more than 520 euros but less than 2.000 euros per month. Taxation and social security contributions apply, but at a lesser rate than other jobs.

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FAQs

What are the main differences between the standard contract and the alternative contract in Germany?

The standard employment contract has no end date. Therefore, it can be difficult to terminate this employee because of the open-ended contract timeline. Whereas with the fixed-term employment contract, the work can have an end-date in the case you no longer wish to work with that employee.

Which Germany employment contract is right for me?

This will depend on your exact situation, in most cases in Germany, the standard open-ended contract will be used. However, this may be more difficult if you are an international company seeking to hire employees through a labour leasing arrangement, which generally means an 18 month maximum contract is required.

If you have any specific questions for your hiring project, you can contact us for a quote and consultation.

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"As a seed-stage, London-based startup, we were initially hesitant to expand internationally due to the administrative workload involved. Horizons took the headache out of the process, allowing us to hire a team of software engineers in Germany."

Gabor SzedlakCo-founder & COO at MindLabs (UK)

"I truly appreciated the thoroughness and the professionalism of Horizons personnel while we hired internationally with them. They were knowledgable on all subject matters pertaining to international employment."

Gary PaskyVP Software Development, PICS ITech (USA)

"On deciding to begin commercial activities in Asia Pacific, we needed a provider to handle the employment and remuneration of our workforce. With Horizons the result was fast, efficient, and fit-for-purpose. We recommend Horizons as an EOR provider.”

Chris MorrellManaging Director, Schaeffler Group (Germany)

"The collaboration with the Horizons team is excellent. Both our local employee as well as our HQ in Germany are more than pleased with the support provided and the simplicity of the service. We can highly recommend the Horizons solution to anyone."

Christoph EngelbertCo-Founder & CTO, Clevabit (Germany)

"We needed an EOR that could provide expert support for payroll in APAC. We are pleased with Horizons’ expertise and the fact that they are flexible, responsive, and easily accessible from Belgium. They were able to provide services within the short timeline we required."

Katia FlamandHuman Resources, Devian Chemicals (Belgium)