As the largest economy in the European Union, Germany is a popular destination for international businesses and international migrants. In 2020, Germany was second only to the United States in its share of the total global migrant population, with over 13 million resident first-generation immigrants. Germany’s expat employee population reflects its status as a global hub, with thousands of businesses moving employees to the country every year. While Germany holds exciting opportunities for individuals that arrive to work in the country, it also presents a range of global mobility challenges for employers.
If you’re moving employees to Germany, learn more about the immigration process, and its challenges, with our global mobility guide.
Following Brexit, we may find that countries across the EU take a different position on various items which may impact global mobility and so it is important to seek advice from specialists when considering mobilising people to any EU country.
Germany Global Mobility Basics
Whenever you move employees to an international location there are a number of basic global mobility challenges to take into account. As a member of the European Union, many of the global mobility considerations that apply to Germany are shared across the bloc, and include:
- Personal items: International moves will require employees to ship personal items or acquire those items in their new destination. Your global mobility plan should take the cost of shipping personal items or reimbursing the cost of the employee purchasing new items, into account.
- Relocating family members and pets: Some employees will need to move partners and children with them to their new location and employers may wish to take account of this in their global mobility programme. Employers may also wish to take into account family needs such as visas, healthcare and schooling. Employees that wish to relocate their pets to Germany may need to be aware of additional immigration requirements.
- Residential property: Expat employees will need to think about what happens to any property they own in their country of origin. They may wish to sell their property or rent it out for the duration of their time in Germany.
Employees should be made aware of any home and host location employment tax implications of the proposed arrangement. This is generally done as part of a tax briefing with a global mobility specialist which is something sometimes offered to internationally mobile employees. Further information on this can be found below.
German Visas and Permits
Individuals who are EU nationals or citizens of countries in the European Economic Area (EEA) do not have to obtain a visa in order to live and work in Germany (or for stays of any length). Upon entry to Germany, however, employees from the EU and the EEA will need to register at their local Civil Registry (Einwohnermeldeamt).
Employees from non-EU countries (now including the UK) that move to Germany for the purposes of work will likely need to obtain a work visa in order to stay permanently. German work visas involve certain eligibility criteria, including professional skill level requirements, academic qualification requirements, and requirements for an existing job offer in Germany.
With that in mind, some of the available visas for employees moving to Germany for the purposes of work are:
Blue Card EU: The Blue Card EU visa is intended for skilled workers with a recognised university degree, that have a job offer in Germany with a salary of €56,800 per annum (before taxes). For employees working in STEM fields, the salary threshold is reduced to €44,304 per annum.
Work Visa with contract: The Work Visa with contract is similar to the Blue Card EU in the sense that it requires applicants to have a job offer in Germany and have a recognised level of academic achievement such as a university degree or a vocational qualification. Skilled workers may access a fast-track application procedure for this category of visa.
Work Visa with partially recognised qualification: Employees with vocational qualifications that are only partially recognised by the German educational system may apply for a visa that enables them to attain the necessary additional qualifications in Germany. This category of visa requires employees to have a certain level of German language skill, and proof that they need the extra training. Once the training is complete, the employee may apply for a long-term residence permit.
IT specialist with work experience: Foreign employees arriving in Germany to work in the IT sector do not need a recognised degree. The IT specialist with work experience visa requires employees to have been working in an IT job for at least 3 of the last 7 years and have a job offer with a salary of at least €51,120 (before taxes).
Immigration rules regarding UK nationals working in EU countries has recently changed following Brexit, so employers should seek advice from an immigration specialist to ensure they are following current guidance.
Compensation in Germany
Your Germany global mobility programme may include a compensation framework for employees that are relocating. Practically, this means considering the Euro exchange rate with the employee’s home currency, along with German income tax and social security liabilities. Employers may also wish to consider the cost of living in the employee’s German location along with any school, healthcare and relocation costs.
Employers may find it helpful to engage a benefits provider to provide guidance on the type of benefits which may be expected, or are mandatorily required to be provided, as part of any remuneration package offered.
Healthcare in Germany
Germany has a modern, universal healthcare system that is funded by social security contributions and private insurance. All employees in Germany make contributions to a statutory health insurance plan based on their salary, but employees on higher levels of income may opt to contribute to a private insurance plan with risk-related contributions.
German Payroll, Income Tax and Social Security Contributions
Income tax is withheld at source in Germany, and charged progressively. Social security contributions are also withheld at source - including contributions to the relevant health insurance plan.
Employers often offer a tax briefing with a global mobility specialist who can talk them through the income tax and social security implications of their assignment or relocation both from a home and a host country perspective as there may also be ongoing implications in the home country, dependent on the employee’s circumstances.
Employees will find a variety of accommodation options in Germany, in environments that range from densely populated urban centres to more remote rural locations. Employees should be able to find a variety of residential properties, including family homes, townhouses, and apartments, in locations around the country. With a well-developed infrastructure, Germany’s residential areas are served by a range of amenities, medical facilities, and public transport options.
As a modern, progressive European country, Germany welcomes thousands of expat workers from across the world. Employees arriving in Germany will find a diverse, multicultural society with plenty of options for education and entertainment. Prior to beginning their roles, and to ensure a smooth transition, it may be worth offering employees guidance on integrating in Germany, including German language lessons, information on how to pay for utilities, and other insight into local customs and culture.
Find out more about German global mobility, tax and payroll, and other business considerations, in our Global Insight Guide to Germany.