Employer of Record in Germany

How hiring through an employer of record works in Germany

The local employer signs the German contract, reports the employee to social insurance and runs payroll, while your managers direct the daily work. Toku confirms the arrangement before an offer.

Registration goes to the health insurer with the first payroll, within six weeks of the start at the latest. The Nachweisgesetz also requires the essential terms in writing; since 2025 they may be sent electronically in text form with a request for confirmation of receipt, except in sectors listed in section 2a of the Schwarzarbeitsbekämpfungsgesetz.

Employer costs and contributions in Germany

For 2026 employer and employee split these rates equally: pension 18.6%, unemployment 2.6%, general health insurance 14.6% plus the fund's extra rate (2.9% on average) and long-term care 3.6%. The employer alone pays a 0.15% insolvency levy, accident insurance and the U2 maternity levy, and employers with up to 30 staff also pay the U1 sick-pay levy.

Adding the employer lines at the average extra rate gives about 21.3% (9.3, 1.3, 7.3, 1.45, 1.8 and 0.15) up to the contribution ceilings, before accident insurance and the U1 and U2 levies. Toku's country data cites about 20%. Toku's compliance guide says many sector agreements require a 13th month.

Working time, leave and pay rules in Germany

• Hours: eight a day, up to ten if the average stays at eight over six months, with 11 hours of rest between shifts. The Arbeitszeitgesetz sets no overtime premium, so overtime pay follows the contract or a collective agreement.
• Minimum wage: it applies to minijobs too, with limited exceptions.
• Sick pay: after four weeks of employment, up to six weeks of continued pay per illness.
• Public holidays: set by state law, except 3 October, which applies everywhere.
• Parental leave: up to a child's third birthday.

Probation, notice and dismissal in Germany

Probation can last up to six months, with two weeks' notice. Otherwise the base notice is four weeks to the 15th or a month end. Employer notice grows with service, from one month after two years to seven months after twenty. Notice must be written, not emailed.

Dismissal protection starts after more than six months of service: the dismissal must rest on the person, conduct or urgent operational needs. It does not apply where an establishment regularly has ten or fewer employees, for staff hired since 2004.

Getting paid in stablecoins, USDC, USDT, tokens and crypto in Germany

Short answer: Yes, by agreement, for part of pay only. Section 107 of the Gewerbeordnung allows agreed pay in kind up to the attachable part of euro wages, and the Federal Labour Court applied it to an Ether commission (10 AZR 80/24), not to stablecoins or base salary. The unattachable part stays in euro.

What the law says about the form of pay

Section 107(1) of the Gewerbeordnung requires wages to be calculated and paid in euro. Section 107(2) allows part of pay to be given in kind when that serves the employee's interest or suits the nature of the employment, but its value may not exceed the attachable part of pay. In a 2025 judgment (10 AZR 80/24) the Federal Labour Court held that cryptocurrency is not money under section 107(1), and that a commission calculated in euro and converted at the current rate into Ether can in principle be agreed as pay in kind where that is objectively in the employee's interest, provided the unattachable part of pay is paid in money.

What it means for employee salary

A German salary is still calculated, taxed and paid in euro. The court's reasoning lets only part of it be agreed in crypto: section 107(2) caps pay in kind at the attachable part of pay, and the case concerned a commission paid in Ether, not base salary and not a stablecoin. No official source opened says a stablecoin payout of salary is allowed, so whether a USDC element qualifies is confirmed per hire before an offer.

Contractors

Section 107 covers employees. Following instructions and being integrated into your organisation are indicators of employment under section 7 of Book IV of the Social Code, and the Deutsche Rentenversicherung Bund decides status under section 7a when the parties apply.

Tax on crypto and tokens

The Federal Fiscal Court held in 2023 (IX R 3/22) that gains on selling or swapping cryptocurrency within a year of buying it are taxable as private sales, and section 23(3) of the Income Tax Act leaves a year's gains untaxed below EUR 1,000.

How Toku handles it

Separately from what the law in Germany allows, Toku offers stablecoin payroll, including USDC, in supported arrangements and pays contractors in USDC or USDT through contractor management. Token grants are a separate arrangement from salary, administered through token grant administration. This page does not say any of these is available for a hire in Germany: that is confirmed before an offer.

Reviewed November 7, 2026 against the official sources listed below. General information, not legal or tax advice. Tax on crypto or tokens received depends on local rules and where the person is resident, so confirm it with a local adviser.

How hiring through Toku works in Germany

1. Share the role, location, salary and start date.
2. Toku confirms coverage, the contract type and the right to work.
3. The local employer issues the contract and onboards the person.
4. Payroll, contributions and filings run each cycle.

Toku checks the role, location and contract terms before a start date is set. Gather identification, bank details and the agreed euro salary. Your quote confirms the onboarding timeline for Germany.

What an employer of record costs in Germany

Where Toku supports the hire, its employer of record service starts at $599 per employee per month, with salary, employer contributions and benefit premiums itemized in your quote. Coverage in Germany is confirmed before an offer. See the published pricing.

More on hiring in Germany

• Payroll and hiring in Germany
• Germany full-time hiring compliance guide
• Employer of record in Germany: hiring your first Berlin employee
• Employer of record coverage in 100+ countries