Companies Sending Staff to Germany

At the bottom of this page we have detailed information about our solution for Germany, including management fees, work permit fees & processing times, payroll, taxation, and social security levels.

If you’re looking to send staff to Germany for an overseas project, it can be difficult to find clear information on an unfamiliar jurisdiction, much less efficient solutions. You’re facing complicated issues, in addition to a host of problems you may not have even considered yet. To compound these difficulties, you’re likely under sizable time and budget constraints.

Contractor Taxation offers a comprehensive solution to these concerns, helping companies extend into new markets and rapidly deploy expatriate resources. Read more about the kinds of goals your company could be achieving, instead of using time and resources to research Germany’s intricate tax and immigration information.

Taxation in Germany

One of a company’s biggest concerns will be guaranteeing total compliance with any and all tax requirements. In order to safeguard both itself and the end client, a company needs to consider:

  • Personal income tax for their employees in Germany
  • Social security costs
  • Payroll tax in Germany
  • VAT/Sales tax in Germany
  • Withholding tax in Germany (if you’re in the U.S., learn more about withholding tax here)
  • Permanent establishment

Work Permits for employees in Germany

Another major concern will be your ability to secure the appropriate Work Permit for your employee.

Employees need to be sponsored for a permit. To sponsor an employee yourself, you will need to be incorporated locally and be licensed to sponsor foreign workers. If you’re not already at that stage, organising a permit is an impossibility until you complete the (often lengthy) process of local incorporation and licensing. Depending on your project’s time frame, you might need employees on site quickly, making a Work Permit even more problematic.  

The end client may or may not be willing to sponsor a temporary worker, but this raises complicated payroll and employment issues. Sponsors often need to pay the sponsored employee, adding another layer of complication to the already-complex process of taking on a project in Germany.

You might be able to explore alternate visas for your employee, or even use one visa and transfer to a Work Permit in order to expedite secondment. However, missteps can cost even more time (and money). If an employee is working on the wrong visa, you could be opening the end client to serious legal and financial risks.  

What is a management company and how can it help send your staff to Germany?

Essentially, a management company operates like an outsourced employer. They sponsor your staff on local Work Permits (where required), employ your staff and payroll them locally. They deduct all local taxes and social security from the assignees’ pay at source, and then pay these to the local tax authorities. In short, they reduce your administrative burden, while mitigating the business risks of employee secondment.

Taxation: As specialists in local tax law, they ensure that an employee 1) is compliant with all regulations, and 2) keeps the largest possible portion of his or her earnings. This reduces your administrative work, along with any risk of tax violation in Germany.

Immigration: Management companies can sponsor Work Permits for staff, eliminating one of the largest barriers of project work in Germany.

If you urgently need staff on site, a management company can also help organise a Business Visa for the employee. They can then help the employee transition to a Work Permit, assuring that your employees start work faster while maintaining compliance with Germany’s immigration regulations. 

Your company’s role: Although a management company involves a fee, you typically save money and time by reducing your administration, as well as potential liability. Why not get a quote and compare the total cost of employment?

Germany payroll services

Firstly, do you have a local company in Germany? If so, is it appropriately registered to run a payroll, or to deduct and file taxes? Does it have the right administrative staff and is it capable of staying up-to-date with local tax requirements? Is it able to sponsor international hires for Work Permits?

Without a suitable local company already in Germany, you need to consider a few different options.

Setting up payroll in Germany

You can incorporate locally, get registered, and hire staff to handle payroll in Germany. This option depends on your circumstances; will your project justify the cost of incorporating locally? Will you be able to incorporate within the time limits of the project? Is it even possible to set up a company yourselves with local ownership requirements? Will this company be able to sponsor international hires on local Work Permits?

If you believe this is the correct route for your company, you likely need to consult a local accounting advisory firm. Time and budget permitting, you can also consult an international tax specialist like PWC or KPMG. Some of our partners offer assistance to foreign companies incorporating locally; check with us if you are interested.

Even if you decide that establishing a local payroll in Germany is the right option for you, you should still consider using a local payroll provider.

Using a local payroll provider

The time frame of your project may not justify local incorporation. In that case, a payroll provider is a more efficient solution. Even if you plan on incorporating in Germany, you can reduce security risks by using a payroll provider while you get set up. This solution is simple and only requires a monthly, commitment-free operational cost.

Payroll providers versus management companies

Outsourcing payroll can mitigate the risks and liabilities of sending employees to Germany, but it’s prudent to consider using a management company rather than just a payroll provider. A management company specialises in all of the same payroll tasks, plus a multitude of other services.

Most notably, they are able to sponsor Work Permits for your staff. This means a management company can reduce immigration-related liability, in addition to their specialist tax and payroll solutions.

Getting started with a management company in Germany

Co-employment eliminates your legal responsibility and dramatically lessens your administrative load. This frees your company to devote its resources to higher value business objectives, and helps maintain consistency across borders. However, different management companies offer different expertise, making it important to find the right company for your project.

Let us know your goals and we can give you easy, concise information on sending your staff to Germany.  Our advice is free and doesn’t obligate you in any way.

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Work Permits in Germany: Frequently Asked Questions




Can a management company sponsor Work Permits for foreigners in Germany? 


How long does it take to get a Work Permit in Germany?

Up to 90 days.

What is the work permit process in Germany?

There are 2 possible routes; if the candidate has a company in their home country they can secure a visa as a representative of that company in Germany OR more simply 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 an application for a Residence permit needs to be lodged immediately. This will take up to 90 days.

What documentation is required for a Germany work permit?

Copies of the candidates passport, degree/diploma/professional certifications, proof of relevant work experience, 2 passport photos.

What is the cost of a Work Permit in Germany?

€ 1,700

Can you transfer from a Business Visa to a Work Permit in Germany?

Yes but it’s actually from a D Visa to a Residence Permit.

€ 300 a day.


Business Visas in Germany: Frequently Asked Questions



Can we organise business visas for Germany?


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

1-2 weeks.

What is the cost of a Business Visa in Germany?

€ 200

Can nationals of certain countries enter Germany without a Business Visa (for example, on an entry visa or visa waiver)?



Management Companies in Germany: Frequently Asked Questions



What is the monthly cost of using a management company in Germany?

€ 400

What is the estimated net retention for an assignee in Germany earning USD 200,000 per year?


What is the estimated net retention for an assignee in Germany earning USD 100,000 per year?

*update pending


Payroll in Germany: Frequently Asked Questions



How does payroll work for employers of foreign nationals 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.

What is the monthly cost to outsource payroll in Germany?

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