Cost to Hire an Employee in Germany (2026)

• Gross salary, usually paid monthly.
• Employer costs of about 22.6% at a €65,000 salary: €14,658 a year, of which the largest is pension insurance.
• An EOR fee, if you hire without your own entity. The providers in our Germany guide publish starting prices of US$399–699 per employee per month.

Mandatory employer costs at a €65,000 salary (mid-level professional). Employee contributions and income tax come out of gross pay and aren't included.

Contribution ceilings mean employer costs can be a smaller share of higher salaries. Figures exclude the EOR fee.

• Pension contribution ceiling: €101,400 / year
• Salary payments per year: 12 (13th month common)
• Minimum wage (2026): €13.90 / hour
• Statutory annual leave: 20 days (5-day week)
• EOR assignment limit: 18 months (AÜG)

• 13th-month salary (optional) (8.333% of gross): Common but voluntary. Adds one month's salary (plus contributions in real payroll).
• Contribution ceilings: health and care contributions apply up to €69,750 a year, pension and unemployment up to €101,400 (2026).
• The health insurance additional contribution (Zusatzbeitrag) varies by insurer. The model uses the 2026 average of 2.9% (employer pays half).
• Employee contributions (about 20–21% of gross up to the ceilings) and wage tax are deducted from gross pay and are not employer costs.
• Employers continue full pay for up to six weeks of sickness (Entgeltfortzahlung), which is a real cost not shown in these tables.
• Common voluntary benefits include a 13th month, company pension (bAV, with a mandatory 15% employer subsidy on salary-conversion schemes), and public transport tickets.

Without your own entity in Germany, an Employer of Record can employ your hire for a monthly fee. The alternative is setting up your own German GmbH. See the comparison in our Germany guide and EOR vs local entity.