How much do the employees in Germany cost their employer?

Work abroad – the cost of keeping an employee in Germany is surprisingly high.

When calculating employee maintenance costs – regardless of whether they use the services of an employment agency or not – the employer must take into account the actual costs and indirect costs. Real costs include:

– employee insurance, which amounts to 19.275% of his gross wage. Disability insurance 9.45%, health 7.30%, unemployed 1.50%, nursing 1.025%. And this is not the end! To this should be added approximately 2.5% insurance giving the company a partial refund of the salary paid to the employee during illness. And at the end of the year, the contribution to the professional association, the amount of which depends on the risk of an accident at the workplace;

– employee insurance, which amounts to 19.275% of his gross wage. Disability insurance 9.45%, health 7.30%, unemployed 1.50%, nursing 1.025%. And this is not the end! To this should be added approximately 2.5% insurance giving the company a partial refund of the salary paid to the employee during illness. And at the end of the year, the contribution to the professional association, the amount of which depends on the risk of an accident at the workplace;

– holiday or Christmas gratification (addition – the so-called thirteen salary);

– any allowances (for children, retirement provision [Altersforsorge], bonuses);

– payment of salary in the event of illness or other absence;

– course, training – fortunately, here you can reduce finances by e.g. the costs of employee health and safety training in the case of cooperation with an employment agency (then the employee’s health and safety training is within the scope of the employment agency’s responsibilities);

– 1 salary paid “for free” in connection to vacation leave.

Indirect costs are: furnishing the workplace, additional gifts and more.
For example, if an employee earns EUR 35,000 a year, his overall cost to the employer is EUR 63,000.

Employment agency – one of the ways to reduce the cost of doing business.

An employer from Germany can reduce the costs of doing business using the services of an employment agency. The employment agency provides a service to the employer, in exchange for which they usually issue an invoice. And it is included in the company costs, which are later written off.
As we mentioned earlier, the employer can also save on health and safety training because they are provided by the employment agencies.
In addition, the employement agency is responsible for ensuring that employees have appropriate training in the selected job (or experience in selected industries), thus saving employers from Germany tedious and long searching for a suitable candidate (HR costs, costs associated with recruitment).

Advantages of using employment agency services – the summary.

So the invoice issued by the employment agency is not the only plus of using its services. The advantages of using the services of an employment agency also include: relief from HR tasks, such as preparing employment contracts, sending an employee for health and safety training or medical examinations. What’s more, the employer using the services of an employment agency does not have to worry about preparing job offers, often lengthy recruitment processes, or expenditure on advertisements. And most importantly – if a permanent employee goes on vacation or gets sick, the company can quickly count on immediate personnel support from the employment agency, which has a database of candidates qualified in a given industry.