PAYROLL SERVICES GERMANY · FOREIGN EMPLOYER REGISTRATION · LOCAL HR SUPPORT
Direct Employment & Payroll Services in Germany for Foreign Companies
Your company as the employer. Our German HR team by your side.
Employ your team anywhere in Germany through your existing company – no German subsidiary required. Since 1999, FMC Group has helped international companies enter and grow in foreign markets. Our team in Germany supports your employer registration and provides your monthly payroll and local HR administration – in English or German, for you and your employees.
Start directly, or move from an Employer of Record once you’re ready to become the employer.
- Employment under your company’s name
- Transparent fees – no percentage of salary
- Bilingual HR team in Germany for you and your employees
Can a foreign company employ people in Germany without a GmbH?
Yes. A foreign company can employ people in Germany without setting up a GmbH or another German subsidiary. Your company signs the employment contract and remains the employer. It registers as a foreign employer, runs German payroll and pays social insurance contributions and, where applicable, wage tax.
This model is often called foreign employer registration or non-resident payroll. FMC Group delivers it as one service: support with your registrations at the statutory accident insurance institution, the Federal Employment Agency and the tax office, monthly payroll and local HR support – coordinated by one team in Germany.
Why choose direct employment in Germany?
Your company, your employees – no subsidiary
Your company signs the employment contract and builds a direct relationship with your team in Germany. You don’t need to incorporate a German subsidiary just to hire.
Cost-efficient for long-term employment
For long-term employment, the service fees can be lower than an EOR arrangement – with no percentage of salary. We explain the cost differences for your setup in the proposal.
Long-term employment, no 18-month limit
The 18-month assignment limit for employee leasing under the AÜG does not apply to a genuine direct employment relationship. Build your German team for the long term.
Who our direct employment and payroll service is for
Built for European and non-European companies with small and growing teams anywhere in Germany – from the first employee onwards. Typical situations include:
- First employee in Germany: hiring your first person in Germany without opening an entity.
- Service, support and technical roles: building a team close to German customers or employing developers and specialists based in Germany.
- Moving from EOR: bringing employees from an Employer of Record – ours or another provider’s – into direct employment, for example before the 18-month limit.
- Relocating employees: arranging an existing employee’s move to Germany.
- Sales roles: possible, but employees who conclude contracts on your behalf can create a permanent establishment – clarify this before hiring.
The right setup depends on your company and the employee’s activities. We flag questions that need a separate legal or tax assessment early, so they don’t delay your start.
Payroll services in Germany for foreign employers – coordinated by one local team
Direct employment with local administrative support
Your foreign company
The employer
Employment contract
Your employee in Germany
Directly employed by your company
Administrative support for your company and your employee
FMC Group · German HR team
Employer registration, payroll services and local HR support
Your company remains the employer. FMC supports the administration for both parties.
Everything your company needs to run German payroll as a foreign employer, with one dedicated point of contact for your company and your employees – in English or German.
Employer registration and payroll setup
First, we support your registration with the competent statutory accident insurance institution (Berufsgenossenschaft). Its accident insurance number (Unternehmensnummer) is required to apply for the establishment number (Betriebsnummer) at the Federal Employment Agency. Where wage tax applies, we also support the payroll tax registration with the tax office. We then set up your company and employee data and your monthly payroll calendar.
Monthly payroll and reporting
Every month you receive payslips, payroll journals, social insurance notifications and contribution statements, a SEPA payment file and, where applicable, wage-tax filings via ELSTER. You provide payroll changes, review the results and execute the payments.
Local HR support and employee portal
Your company and your employees can contact our HR team in Germany in English or German. Employees access payslips and payroll documents in a secure online portal. We issue the certificates employees need for authorities and benefits – for example for sick pay, parental allowance or unemployment benefit – handle U1/U2 reimbursement applications and support enquiries from health insurance funds and authorities.
Statutory representative and official correspondence
Where required, FMC acts as your Germany-based representative for payroll records under Section 28f(1b) SGB IV, based on a power of attorney included in our agreement. As an optional service, we also act as your authorised recipient for official correspondence.
Who handles what?
- Employment relationship and day-to-day managementResponsibility: Your company
- Employer registrationsResponsibility: FMC supports and coordinates
- Monthly payroll, reports and filingsResponsibility: FMC, as part of the payroll service
- Salary and statutory paymentsResponsibility: Your company, using the payment file provided
- Statutory representative for payroll records (Section 28f SGB IV)Responsibility: FMC, where required, under the power of attorney
Service scope
FMC provides payroll services and employment-related administration. Your company remains the employer. Legal and tax advice, including drafting employment contracts, is not part of the service.
All payroll records are archived for you. Support during social insurance or payroll tax audits and additional HR coordination are available on request.
How your direct employment setup works
01
Discuss your hiring plans
Tell us where your company is based, which roles you plan to employ in Germany, your team size and your intended start date. We explain the administrative process and the information needed for a proposal.
02
Confirm the setup and service scope
We review your planned roles and working arrangements with you and define the registrations, authorisations, responsibilities and payroll process. You receive a proposal with a transparent breakdown of the setup and monthly fees.
03
Complete registrations and payroll setup
We coordinate the registrations and payroll configuration. Some steps build on each other – for example, since 2024 the Federal Employment Agency requires the accident insurance number (Unternehmensnummer) before it issues the establishment number (Betriebsnummer).
04
Begin the monthly payroll cycle
You submit payroll changes by the monthly deadline. You receive payslips, reports and filings, your employees get access to the portal, and our HR team answers ongoing questions. Your company executes the payments.
Allow around six weeks for planning
As a planning guide, allow around six weeks for the setup. Registrations build on one another, and processing times at authorities and the accident insurance institution can vary. Complete documents help keep the schedule on track.
Discuss your intended start date with us before committing to an employment timeline. We clarify the prerequisites and payroll readiness for your case.
Why international companies choose FMC Group
A bilingual HR team in Germany
Your company and your employees get a dedicated point of contact in English or German for payroll questions, documents and day-to-day administration. Our German team is based in Stuttgart and supports employees anywhere in Germany.
Direct employment and EOR from one partner
Start with EOR in days and move to direct employment when you’re ready – or start directly. One partner for both models, without changing your point of contact.
Transparent fee structure
A one-time setup fee and fixed monthly fees based on the number of employees you employ in Germany. No percentage of salary, no hidden mark-ups – additional services are agreed in advance.
Direct employment or EOR: which model fits your plans?
Both models give you a local team in Germany. The differences: who is the employer, how fast you can start and what the service costs. Statutory employer costs – salary, social insurance contributions and, where applicable, wage tax – apply in both models.
- Who is the legal employer?Direct employment with FMC: Your existing foreign companyFMC Employer of Record: FMC’s German employing entity
- How fast can you start?Direct employment with FMC: Plan for around six weeks for registrations and payroll setupFMC Employer of Record: Often within 1–2 days
- How are FMC’s service fees structured?Direct employment with FMC: One-time setup fee and fixed monthly fees based on the number of employees. For long-term employment, often lower than EOR service feesFMC Employer of Record: Monthly EOR service fee covering the full employment relationship
- Who directs day-to-day work?Direct employment with FMC: Your companyFMC Employer of Record: Your company, within the EOR arrangement
- What does FMC handle?Direct employment with FMC: Registration support, monthly payroll and local HR administrationFMC Employer of Record: The employment relationship, contracts, payroll and HR administration
- Does an 18-month limit apply?Direct employment with FMC: NoFMC Employer of Record: Generally 18 months with the same hirer under the AÜG, subject to exceptions
- When is it a good fit?Direct employment with FMC: You want your company to be the employer for the long term – from the outset or after EORFMC Employer of Record: You want the most convenient route: FMC is the employer and you can start fast
Direct employment is a standalone solution – you don’t need to use EOR first. Choose EOR if convenience and speed matter most; choose direct employment if you want your company to be the employer for the long term.
Section 1 AÜG: employee leasing and assignment limits
Explore Employer of Record GermanyMoving from EOR to direct employment in Germany
Your employee works through an Employer of Record – ours or another provider’s – and you’re approaching the 18-month limit? Direct employment is the long-term next step, with continued local support from FMC.
Start planning before the applicable assignment limit. For employee leasing subject to AÜG, the general limit is 18 months with the same hirer, subject to exceptions. Previous assignments can count, including assignments through another provider where the gaps do not exceed three months. Changing EOR providers does not automatically restart the clock.
The transition requires coordinated employment arrangements, registrations and payroll planning. Employee agreement where required, notice provisions, existing service, leave and benefits need to be reviewed before the transition. The change is not automatic.
Tell us your current assignment start date and whether the employee has previously worked for your company through another EOR or leasing provider.
Questions about direct employment in Germany
Can a foreign company employ people in Germany without a GmbH?
Yes. A foreign company can employ people in Germany directly, without setting up a GmbH or another German subsidiary. Your company signs the employment contract, registers as a foreign employer and runs German payroll. Whether additional registrations or a different structure make sense depends on the employee’s activities – for example, if the role could create a permanent establishment.
How does foreign employer registration in Germany work?
Registration follows a fixed sequence. First, your company joins the competent statutory accident insurance institution (Berufsgenossenschaft) and receives its accident insurance number (Unternehmensnummer). Since January 2024, the Federal Employment Agency requires this number before it issues the establishment number (Betriebsnummer). Where wage tax applies, the tax office then assigns a payroll tax number. Finally, company and employee data are set up in payroll and the employee is registered with their health insurance fund. FMC supports each step and coordinates the sequence for you.
How can a company from outside Germany, such as a US company, hire employees in Germany?
Whether your company is based elsewhere in Europe or outside Europe, for example in the US, you have two main options without opening a German entity. You can employ the person directly as a foreign employer, with FMC supporting registration, payroll and local HR administration. Or you can use FMC’s Employer of Record service, where FMC employs the person on your behalf. Direct employment suits long-term hires under your own name; EOR is the faster, more convenient start. German employment law applies in both cases. Any immigration or work-authorisation requirements must be addressed separately.
How much do payroll services in Germany cost with FMC?
FMC charges a one-time setup fee and fixed monthly fees based on the number of employees you employ in Germany. There is no percentage of salary. For long-term employment, these service fees can be lower than an EOR arrangement – we explain the cost differences for your setup in the proposal. Statutory employer costs such as salary, social insurance contributions and wage tax apply in either model. Additional services, such as audit support, are agreed and priced in advance.
How does payroll work in Germany?
German payroll runs monthly. Where a withholding obligation applies, the employer deducts wage tax (Lohnsteuer), the solidarity surcharge where applicable and church tax for church members, based on the employee’s tax class. Pension, health, unemployment and long-term care insurance are shared between employer and employee; the employer also pays statutory accident insurance and statutory levies. Contributions are reported to the health insurance fund and paid by fixed deadlines. FMC coordinates this cycle for you every month.
Can we use direct employment from the beginning?
Yes. EOR is not a prerequisite. You can start with direct employment straight away, or move to it later from an existing EOR arrangement.
Is FMC the employer?
No. With direct employment, your company is the legal employer and signs the employment contract. FMC provides payroll services and local HR administration. If you would prefer FMC to be the employer, our Employer of Record service is the alternative.
Can our employees contact your HR team directly?
Yes. Your employees can contact our HR team in Germany in English or German with questions about payslips, certificates and payroll-related administration. Payslips and payroll documents are available in a secure online employee portal.
Must we withhold German wage tax?
Not in every case. The withholding obligation depends on the employer’s circumstances, including whether it has a German establishment or a permanent representative for tax purposes. Where no withholding obligation exists, the employee may need to pay German income tax directly. Payroll administration follows the confirmed treatment for the particular case. See Section 38 EStG.
Can employing someone in Germany create a permanent establishment?
It can, depending on the role. A permanent establishment may arise, for example, if an employee habitually concludes contracts on your company’s behalf or works from a fixed place of business your company controls. This affects corporate taxation, not the employment itself. Clarify it before hiring – especially for sales roles – so you can choose the right structure from the start.
Can FMC act as our representative under Section 28f SGB IV?
Yes. A foreign employer without a German establishment that employs staff subject to German social insurance must appoint a representative in Germany who keeps the payroll records. Where required, FMC takes on this role based on a power of attorney included in our agreement. Acting as authorised recipient for official correspondence is a separate, optional service. See Section 28f(1b) SGB IV.
Is direct employment limited to 18 months?
The AÜG assignment limit applies to employee leasing, not to a genuine direct employment relationship between your company and its employee. Other applicable German employment rules, including those governing fixed-term contracts, still apply. See Section 1 AÜG.
When does a German GmbH make more sense than direct employment or EOR?
There is no fixed headcount threshold. A German subsidiary becomes worth considering when your German business grows beyond a small team, when you need local contracting, office leases or a local legal presence, or when your activities would create a permanent establishment anyway. Many companies start with EOR or direct employment and set up a GmbH later. We are happy to discuss which model fits your plans.
How long does setup take?
Allow around six weeks as a planning guide. Registrations follow a sequence, and timing depends on complete documents, processing by the authorities and the accident insurance institution, and the payroll calendar. If you need someone to start sooner, an Employer of Record can bridge the gap.
Let’s discuss your team in Germany
Whether you are planning a first hire, supporting an existing team or moving from EOR: book a free, no-obligation 30-minute consultation or send us your details.
What happens next?
In the consultation, we discuss your plans, the registration sequence and your timeline. You then receive a proposal with a transparent breakdown of the setup and monthly fees.
Your contact
Stephan Dorn
Managing Partner, FMC Group
Opens Microsoft Bookings
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