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Germany has emerged as a favorite destination for businesses seeking expansion opportunities in overseas markets. An important aspect of such expansion drives is to hire competent and talented professionals locally for ensuring business growth and success. However, Germany, like most other countries has its own set of employment laws that the hiring organizations should be aware of before making any new recruitments. Some important things that organizations need to know in this context are discussed in brief as follows.
Compensation Laws
Business organizations in Germany need to follow the Minimum Wages Act of 2014. Companies are currently liable to pay a minimum wage of €9.35 per hour to their employees under the Act, and this amount is set to increase to €10.45 per hour in 2022. Moreover, there is a law governing the maximum limit for the overtime that the employees can put in per week, although the payment for such overtime is not specified. Most companies choose to hire a professional payroll service provider Germany to ensure complete adherence to these laws.
Working Hours And Required Leave
According to the German employment law, a workweek for employees cannot be more than 48 hours with 6 working days and a maximum of 8 work hours per day. Moreover, employers also need to pay their employees the benefits of paid vacation and sick leave. German employees are also entitled to nine calendar holidays through a year and any additional public holidays that individual states might be having.
About PAYE And Social Security
It is the responsibility of the provider of payroll service Germany to inform their clients that the country follows Pay As You Earn or PAYE model. Under this model, the employers are required to calculate and deduct the necessary with holdings from the paychecks of their employees. These mainly include the applicable income tax and the four different types of insurance that form an integral part of the German social security system each with a specific percentage and cap.
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