Employer of Record hub / Cost
What an Employer of Record really costs in Germany.
Provider fees are the smallest part of the bill. Here is the full loaded cost of a German employee through an EOR — contributions, deposits, sick pay and the line items that only appear on invoice three.
Short answer
Budget 1.3x the gross salary.
A German employee on EUR 80,000 gross costs roughly EUR 102,000 to 108,000 per year through an Employer of Record: about EUR 15,000 to 16,500 in statutory employer contributions and EUR 4,800 to 10,800 in provider fees on top of the salary. A useful planning rule is 1.25x gross for the statutory part and 1.3x to 1.35x once the EOR fee is included.
The deposit — one to two months of total payroll — is the number that surprises finance teams most, because it lands before the employee has worked a day.
Line by line
A EUR 80,000 hire, fully loaded.
| Line item | Annual cost | What it covers |
|---|---|---|
| Gross annual salary | EUR 80,000 | The number in the offer letter. German candidates negotiate on gross, not net. |
| Employer social contributions | ~EUR 15,000–16,500 | Roughly 20–21% of gross across health, pension, unemployment, long-term care and accident insurance. Partly capped at contribution ceilings. |
| EOR provider fee | EUR 4,800–10,800 | EUR 400–900 per month, or 8–15% of gross where priced as a percentage. Negotiable above two headcount. |
| Setup fee (one-off) | EUR 500–1,500 | Contract drafting, registration of the employee with health insurer and tax office, onboarding. |
| Security deposit | 1–2 months of payroll | Held by the provider, refundable. It is working capital, not cost — but it hits your cash plan in month one. |
| Benefits and equipment | EUR 1,000–4,000 | Laptop, phone, optional pension top-up (bAV), Deutschlandticket or job bike. Not statutory, but standard in competitive offers. |
Ranges reflect typical 2026 provider pricing and the statutory contribution rates in force at the time of writing. Contribution ceilings and the average supplementary health rate change annually — treat this as a planning model, not tax advice.
What moves the number
Four levers on the quote.
Salary level
Percentage-based pricing punishes seniority. At EUR 120,000 a 12 percent fee is EUR 14,400 per year for the same administrative work a EUR 500 flat fee covers. Always convert a percentage quote into euros at your actual target salary before comparing.
Headcount
Providers discount at volume, usually from the third employee. If you plan three hires in twelve months, negotiate the volume rate up front rather than accepting the single-hire list price and renegotiating later.
Contract term
A twelve-month commitment typically buys 10 to 20 percent off the monthly fee versus month-to-month. Given that AÜG assignments are time-limited anyway, a twelve-month term rarely constrains you.
Complexity of the role
Field sales with a variable commission plan, a works-council environment or an employee on parental leave all cost more to administer than a remote software engineer on a flat salary. Providers price that in, sometimes only after onboarding — ask.
Before you sign
Eight questions for the provider.
- Ask for the fully loaded monthly invoice at your target salary, not the headline fee
- Confirm the provider holds a valid AÜG (Arbeitnehmerüberlassung) licence and ask for the number
- Get the deposit amount, refund conditions and refund timeline in writing
- Clarify who pays statutory sick pay in weeks one to six — it should be inside the fee
- Ask what an off-cycle payroll run, a contract amendment and a termination each cost
- Check the notice period on the EOR contract itself, not just the employment contract
- Confirm whether equipment, expenses and benefits are passed through at cost or with a markup
- Ask what happens to the employee when you transfer them into your own GmbH later
FAQ
Cost questions we get asked.
How much does an Employer of Record cost in Germany per month?
Provider fees are typically EUR 400 to 900 per employee per month, or 8 to 15 percent of gross salary where the provider prices as a percentage. On top of that you pay the gross salary itself and roughly 20 to 21 percent statutory employer social contributions, so the fully loaded cost of a EUR 80,000 salary lands around EUR 102,000 to 108,000 per year.
Is a flat monthly fee or a percentage of salary better?
For salaries above roughly EUR 70,000 a flat fee is almost always cheaper, because a percentage model keeps scaling with seniority while the provider's workload does not. For junior or part-time roles a percentage model can be cheaper. Ask for both quotes and model them at the salary you actually intend to pay.
What are the hidden costs of an EOR in Germany?
The recurring items people miss are a one-time setup fee of EUR 500 to 1,500, a security deposit of one to two months of total payroll, off-cycle payroll runs charged per event, statutory sick pay for up to six weeks at full salary, mandatory occupational health and safety instruction, and the cost of the employee's statutory notice period when you terminate.
What are employer social contributions in Germany?
Approximately 20 to 21 percent of gross salary, split across statutory health insurance (about 8.1 percent including the average supplementary rate), pension (9.3 percent), unemployment (1.3 percent), long-term care (about 1.8 percent) plus accident insurance and levies. Several of these are capped at contribution ceilings, so the effective rate falls slightly on high salaries.
Do I pay a 13th month salary or bonus through an EOR?
Only if you agree to it. There is no statutory 13th salary in Germany, but it is common in many sectors and German candidates often expect it. Whatever you promise becomes part of the employment contract the EOR signs, and it carries the same social contributions as base salary.
How does EOR cost compare with running your own GmbH payroll?
A GmbH carries roughly EUR 5,000 to 12,000 per year in accounting, payroll and filing costs regardless of headcount, plus about EUR 12,500 paid-in capital and EUR 1,500 to 3,500 in formation fees. EOR fees scale linearly per person, so the two curves usually cross somewhere between three and five employees.
Next step
Get the numbers for your actual role.
Tell me the role, the target salary and the city. You get a loaded-cost model for both routes — EOR and your own GmbH — and a straight answer on which one fits the next twelve months.