In this era of globalization and free movement of people, working in other countries is common practice. It might be an advantage for your career or it is just for the experience concerning different lifestyles and cultures. It has become usual in Germany to employ well educated foreigners from all “corners” of the world. Therefore, here are some important things to address:
1. Trial period
Employment contracts usually include a 6 months trial period for both parties. The employee is not protected by the German employment dismissal law during this period. This means that the employer can terminate the employment contract without giving any reason.
Thus, foreigners who move to Germany take a financial risk by entering an employment contract in case of resigning during the first 6 months and not finding another job.
2. Job description, office, working hours
The standard hours of working is 40 hours per week, but there are also sectors where 35-38 hours are common. Germans, however, often work longer than the employee contract states. Some companies offer flexible time saving accounts.
Job description is often standardly formulated.
3. Reimbursement of work related expenses
Generally a German employer will reimburse all expenses an employee spends on behalf of his employer, but, there is one exception:
German tax law allows the standard deduction for additional expenses for food and drinks consumed at a business travel excluding representation. The standard allowance is:
In a 8-24 hour period you will be reimbursed 12 euros and more than 24 hours is 24 euros.
As in the most parts of the world, the salaries differ in Germany, depending were you work and in which region you live. Highly qualified people earn more money than lower qualified ones.
The most common form of salary is fix salary, but it also depends on which type of company you are working for.
5. Benefits in addition to wages
In addition to your salary there are other benefits that can be paid by your employer. They are either taxable or tax free. Examples of benefits are:
- Private use of a company car and telephone, contribution to private health-, life- or pension insurance.
- Contribution for travelling from and to your workplace.
- Kindergarten payments, gym card etc.
- Germany provides a wide range of tax-privileged retirement and pension schemes. However, the schemes are for various reasons not appropriate for expatriates except if they intend to stay in Germany for a long term.
6. Relocation expenses
Coming to German you can usually reimburse the following relocation expenses:
Costs for moving, shipping, travelling, finding an apartment (accommodation), double rent (home country and in Germany) and additional tuition of children.
For reimbursement, invoices are required for proof. In addition different flat rates can be deducted.
The usual vacation period in Germany by law is 20 days by 5 working days in the week.
8. Social Security Obligation
In general expatriates working in Germany are subject to the German social security system. Half of contributions have to be paid by the employer and the other half by the employee.
Expatriates are often confused by the fact that tax authorities and public social security agencies are totally independent from each other. Therefore wage taxes are paid to the tax office and social security contributions to various other agencies.
Expatriates who are privately health insured can avoid German social health insurance if their income exceeds a certain income level and their private insurance provides sufficient coverage of medical treatment and costs.
Whatever you are planning to do, we recommend to always asking a tax adviser and, concerning law, a lawyer.
We also want to point out the following link: