One of the common questions that come up is whether one can work for a company based in the United States while working in Germany as a remote employee? Salaries in the USA are generally much higher (up to 50% or more, with stocks) than almost anywhere in Europe (even including the top paying cities like London, Munich, Zurich, etc.).
There are plenty of remote job opportunites especially with companies that offer remote only or flexible work from home options or for remote first companies. Here are some things you should consider when you choose to work as a full-time employee or freelancer for a company.
Working as a full-time employee
If you're working in Germany as a full-time employee, your employer would have to oblige for the list:
- Pay Social insurance (Sozialversicherung)
- Pay their contributions for pension insurance (Rentenverischerung) and then you would have to, as well
- Strong labor laws favoring the employee
- Vacation days (statutory minimum of 20 days for 5 days a week, 24 days for 6 weeks a day)
- Paid public holidays (9 to 13 days depending on the state)
- Health Insurance (Employers cover half of this)
- Unlimited paid sick leave
- Overtime cannot exceed an average of 48 hours over a 6-month period
- Income Tax (Einkommensteuer)
- Long term care insurance (Pflegeversicherung)
There are more things to take care of, all of these could potentially put off a prospective employer if they are based in a different country and don't have a legal entity & accounting system to take care of in Germany. In that case, they would have to hire an accountant / lawyer from Germany to take care of the setup.
You would also have to make sure that you have a valid residence permit (if you are not an EU citizen) that allows you to work for a foreign company.
Well, what if you go freelancing, right?
- You should have at least two clients (with one not exceeding 70 or 80% of your income). This is to prevent shadow employment (Scheinselbstständigkeit). These are reviewed on a case by case basis - more information here.
- Health insurance is mandatory (public could cost between €200 to €895 per month), so you will have to pay for yours. This can get really expensive, unless you go private which has its own challenges. More information here.
- Register as a freelancer which obliges you to pre-pay tax on your estimated income, collect VAT, etc.
- No mandatory pension contribution
- Optional unemployment insurance
- Lack of protection from labor law (Kündigungsschutz) - can be terminated on a short notice
In addition, you would probably need legal insurance (Rechtsschutzversicherung), Disability insurance (Berufsunfähigkeitsversicherung), business liability insurance.
If you're going to work in Germany for a remote company, ideally you should take all of the above information into consideration, work your rates/salary out, get an accountant (especially if you go the freelance way), and prepare to deal with bureaucracy.The contents do not constitute legal advice, are not intended to be a substitute for legal advice and should not be relied upon as such. You should seek legal advice or other professional advice in relation to any particular matters you or your organisation may have