Contract in Germany

Contracting in Germany - FAQ

What is the monthly cost of using an Umbrella Company in Germany? 



How long does it take to get a work permit in Germany?

Up to 90 days

What is the estimated net retention in Germany for a contractor earning USD 500 per day?

*update pending

What is the estimated net retention in Germany for a contractor earning USD 1000 per day?


*doesn’t include fee for German work permit or other immigration costs

More questions? See the rest of the FAQ for more information on the Germany work permit process

Getting Started

Taking a contract in Germany means tackling numerous administrative headaches. Before you even begin working as an independent contractor, there are complicated payroll, tax, and immigration issues to work out.

All this complex admin comes on top of any personal matters you need to sort, as well. Even worse, it can be a huge nuisance when you’re already in Germany, trying to adjust to a huge relocation – and a new contract!

Streamlining even a few of these obstacles can dramatically improve your experience.

Luckily, there are ways to simplify more than just a few…

Freelance Germany Requirements


One of your first hurdles will be securing the proper work permit. To get one, you usually need an employer to sponsor you. This means they take full responsibility for you while you’re working in the country.

That’s fine for full-time employees, but what about independent contractors?

Many clients won’t offer sponsorship for a temporary worker and, even if they do, you’ll need to apply for a new permit for each new contract. This creates a mountain of paperwork each time you want to work with a new client.


Additionally, you need to figure out what you owe (if anything) in taxes for your work in Germany.

Of course, there’s also your country of tax residency; you’re likely to owe something on that front, too.

You can take advantage of certain tax structures, but doing so requires a strong familiarity with expat tax law in Germany.

Benefits of working through an Umbrella Company in Germany

You can outsource a lot of these admin problems to specialists at an Umbrella Company (or contractor management company).

An Umbrella Company basically becomes your full-time “employer,” even though you stay in control of your workload, clients, and schedule. The Umbrella Company simply collects and processes your payments, filtering out social security and any necessary fees.

They can also sponsor your work permit, meaning you get to take on new clients without the aggravation of applying for a new permit each time.

Even better, most specialise in tax law for contractors in Germany and can ensure you’re keeping the largest amount of your earnings as possible. They can even assist you with reducing your tax liability back home.

In short, you get all the benefits of a working for an employer, without sacrificing your autonomy as a contractor.

How to get started with the right Umbrella Company

There’s a lot of Umbrella Companies out there; finding the right one for you can be daunting.

We’ve done the research on Umbrella Companies in Germany, and know how to match contractors with the perfect company. If you’ve already secured a contract, get in touch with us and let us know your situation. We can get you started with the best Umbrella Company for you, or simply offer feedback on contracting in Germany.

Oh, and we don’t charge anything. Drop us a line and get free, honest, simple advice.

Send your details for more information

Additional FAQ - work permits & payroll


What documentation is required for a German work permit?

Copies of the candidate’s passport, degrees/diplomas/professional certifications, proof of relevant work experience, 2 passport photos.

What is the work permit process in Germany?

Two options: (1) if the candidate has a company in their home country, they can secure a visa as a representative of that company in Germany OR (2) if the client in Germany is willing to provide a supporting Letter of Invitation, the candidate can obtain a short term Residents Permit. In this instance the candidate will obtain a D Visa, then (on arrival) lodge an application for a Residence permit

Can you transfer from a business visa to a work permit in Germany?

Yes (although it’s technically from a D Visa to a Residence Permit)

Can we organise a business visa for Germany?


How long does it take to process a business visa in Germany?

1-2 weeks

How much does a German business visa cost?


Can nationals of certain countries enter Germany without a business visa (ex. on an entry visa or visa waiver)?




€300 a day

What is the monthly cost to outsource payroll in Germany?

For simple pay-roll calculations, it’s €30 per payslip. For a fully managed pay-roll solution, it’s €75 per person.

How does payroll work in Germany?


Your employer (the company sponsoring your visa) pays the candidate on a monthly basis. They deduct social security  - which is 20.855% for employers and 20.475% for employees. This is made up of 19.6% pensions insurance (employer 9.8%) capped at EUR 67200, 15.5% health insurance (employer 7.3%) (employee 8.2%) capped at EUR 45900, unemployment insurance 3% (employer 1.5%)capped at EUR 67200, nursing care insurance 1.95% (employer 0.975%), accident insurance 1.28% (employer 1.28%). They also deduct income tax - which is progressive and varies from 0-45% pendant on salary level. These deductions are made at source and paid to the Germany tax authorities. Candidates are able to offset their taxable income with relevant business expenses. The World Bank estimates it takes employers in Germany 148 man days to ensure compliance with payroll and labour taxes each year.