Employer of Record (EOR): How to succeed in Germany? With its recent growth, umbrella companies in Germany are attracting a large number of independent professionals and entrepreneurs. Portage is particularly attractive for French consultants planning to set up in Germany. However, the services offered by freelance administration companies are also advantageous for corporate clients wishing to recruit in Germany.
Increasingly, the freelancer is opting to relocate in order to develop his or her business. Although the job market in France offers many opportunities, many professionals, in search of a challenge, renewal or for many other reasons, are looking to move abroad, and in particular to international umbrella companies. And Germany is a very popular destination for consultants from France. Salaries, working conditions and social protection are all attractive. What’s more, French citizens and those from other European Union member states don’t need to apply for a visa to settle in Germany. Freelance administration in this country is a benchmark alternative for self-employed people wishing to do business there, and SKALIS can help you get started and succeed in this country of great professional opportunities!
Employer of Record (EOR): How to succeed in Germany?
The advantages of umbrella companies and payroll services in Germany
Germany’s dynamic job market is prompting many French people to choose this destination to launch or expand their business. For self employed entrepreneurs wishing to establish themselves professionally in this country, wage portage is the ideal solution. In fact, being a » freelance employee » is more profitable than the » kleingewerbe » status in Germany.
While » freelance administration » is advantageous for self-employed workers wishing to adopt the status of salaried employee, it is equally advantageous for entrepreneurs planning to start up their business by recruiting employees in Germany.
By using the services of a EOR company like SKALIS, you can hire consultants without having to set up a German company.
SKALIS takes care of hiring the professional, who then becomes an employee of the EOR company. We take care of all the administrative, social and tax formalities, in addition to the monthly remuneration of the porté employee. We also offer quality support to the client company throughout the duration of the collaboration. We take care of contract renewals and severance negotiations.
The laws on employee portage you need to know in Germany
Since April 1, 2017, strict laws have governed wage portage in Germany. Companies that hire people to work on behalf of other companies as part of a human resources outsourcing business solution are legally required to have a temporary agency license. Under German law, the end customer is at risk if an employee is hired on their behalf in Germany by an unlicensed company. So it’s important to know and respect the rules in force in the country you’re going to. This is another point on which SKALIS can provide you with support and peace of mind, so that you can develop your business without worrying about this important but rather time-consuming and complicated aspect.
Employer of Record (EOR): How to succeed in Germany?
Hiring employees in Germany
You don’t need to set up a company in Germany to hire employees. However, the employer must take care to respect a few essential rules, such as not giving the employee the power to conclude contracts. Social security contributions are divided in two between the employer and the employee. The latter benefits from social protection covering unemployment insurance, health care, pensions and so on. The company is also required to provide accident insurance for employees. Some companies offer other benefits such as private health insurance or housing payments. Employees are subject to income tax (IR), which varies from 0% to 45%. Calculation is based on income.
Using a « EOR » company like SKALIS to hire staff in Germany is advantageous for several reasons:
● Hiring time is short, as the company handles the entire recruitment process.
● The client company can grow rapidly thanks to the ease with which new employees can be hired.
● Operating costs are reduced, as there’s no need to set up a company.
● The umbrella company recruits the best talent, so that client companies have access to the most competent consultants.
Working conditions in Germany
In Germany, the minimum wage is 11.27 euros per hour. Earnings as a freelancer are more attractive than those earned by self-employed workers. For example, a self-employed entrepreneur with monthly sales of €10,000 earns no more than €3,193. And that’s after deduction of all charges and taxes. If he works on a « portage » basis, he earns a monthly salary of 4,792 euros (example) net after deduction of certain expenses. These include portage costs, income tax, and employer and employee contributions.
Working conditions in Germany are also advantageous for those who choose to work on a « portage » basis. When a freelance administration company works with a consultant, the latter signs an official contract that covers all employment formalities.
The average working week is 36 to 40 hours. It is forbidden to work more than eight hours a day. This can be extended to 10 hours a day if within six months (or 24 weeks) the average working time does not exceed eight hours a day.
In the event of illness, employees are entitled to 6 weeks’ leave on full pay. Maternity leave is 1.5 months before the birth and 2 months after. It is extended to 12 weeks for multiple births.
It’s important to note that the German healthcare system is socialized, and all residents benefit from free essential care.
With SKALIS, you don’t have to worry about all these technical aspects – we do it for you. SKALIS is more than just an in-depth accompaniment on the road to success, it’s a true support in the realization of your projects.
