PEO Services in Germany

A co-employment model for companies that want to share the employer relationship in Germany rather than hand it over entirely. We help you work out whether PEO or EOR genuinely fits, and place you with the right vetted partner.

  • Independent advice
  • Vetted partners
  • Honest positioning

What a PEO does in Germany

A Professional Employer Organisation works on a co-employment model. You and the PEO partner share the legal employer responsibilities for your German staff: you keep direction and day-to-day control, while the partner administers payroll, Lohnsteuer, social insurance, and HR compliance under a shared arrangement.

01

Shared employer role

You and the PEO partner share the legal employer responsibilities. You keep direction and control; they handle payroll, Lohnsteuer, social insurance, and HR administration.

02

More direct control

PEO suits companies that want to retain more direct control of the employment relationship than a full EOR arrangement allows. In Germany, EOR is more common for market entry.

03

Honest recommendation

For most companies hiring in Germany, EOR is simpler. We will tell you honestly whether PEO genuinely fits your structure, or whether EOR serves you better.

How PEO works in Germany, step by step

From assessing the fit to a compliant co-employment arrangement.

01 — Assess the fit

We map your structure, headcount, and how much control you want to keep, and tell you honestly whether PEO or EOR serves you better. No product push.

02 — Set up co-employment

If PEO fits, we place you with a vetted German partner and structure the shared employer arrangement correctly.

03 — Onboard your people

Compliant German employment terms, with the administrative employer functions handled by the partner.

04 — Payroll & compliance

Lohnsteuer, social insurance, and filings handled monthly, while you keep day-to-day direction.

What PEO in Germany costs

As with EOR, two parts: the statutory cost of employment (substantial employer burden in Germany) and the partner service fee.

Employer social contributions

Approximately 21.1% of gross salary (pension, health, unemployment, long-term care), plus separate industry-rated accident insurance, administered under the shared employer arrangement against the 2026 income ceiling.

Minimum wage (2026)

€13.90 per hour from 1 January 2026 (roughly €2,409 per month, rising to €14.60 per hour in January 2027), the statutory floor for full-time work.

Income tax (employee)

Lohnsteuer runs 14% above the EUR 12,348 allowance, 42% from EUR 69,878, and 45% above EUR 277,825, withheld as part of the shared payroll administration.

PEO partner fee

A service fee for the co-employment administration. We benchmark across our vetted network, typically 15 to 25% below going direct.

Why arrange it through Bradford Jacobs

Why companies arrange German PEO through us rather than going direct to a single provider.

We tell you if PEO fits your needs

We are independent: we assess what you actually need, place you with the right vetted partner, secure pricing you will not get going direct, and stay on your side to escalate or renegotiate. You get advice, not a product pitch.

  • Independent advice
  • Vetted partners only
  • On your side at renewal

Pricing you can’t get direct

The statutory employer cost, approximately 21.1% plus industry-rated accident insurance, is the same everywhere in Germany. The partner’s own service fee is not, and that is the part worth negotiating. We benchmark it across our vetted network for rates typically 15 to 25% below going direct.

  • 15-25% below direct
  • Network benchmarking
  • Renegotiated for you

Straight to the top when it matters

When something needs resolving, and in global employment it sometimes does, you come to us. We escalate directly, past the helpdesk, to people who can actually move it.

  • Direct escalation
  • No support queues
  • Named account contact

Two decades of placements

Two decades placing and managing employment arrangements across Europe. Once a German business crosses certain size thresholds, its works council gains real co-determination rights, including over how new hires are brought in, which changes how a co-employment structure should be built from day one. We get that structure right the first time.

  • Co-employment expertise
  • Honest fit advice
  • Right structure

We flex as your structure changes

PEO, EOR, and your own entity sit on a spectrum, and the right point shifts as you grow. We advise on the path and manage the moves, EOR to PEO, or either to your own GmbH, as your German presence develops.

  • EOR, PEO or entity
  • Transitions managed
  • Right fit as you grow

The German obligations you share with a PEO

Whichever model you use, the underlying German rules are the same. Under a PEO arrangement, the administrative employer functions are handled for you.

Working time, leave & contracts

Compliant employment contracts and working-time rules. Lohnsteuer and social contributions withheld and filed correctly. Statutory benefits, notice, and dismissal protection applied properly.

Statutory protections & exits

Statutory notice, probation, and the strong protections German employees carry, all handled under the shared arrangement. The value is the same as with EOR: the compliance is handled by people who do it daily. The difference is simply how much of the employer role you keep.

What a PEO arrangement covers

The co-employment administration covers all of this, under one transparent fee.

Compliant contract

A compliant German employment contract, issued and maintained for you.

Payroll & filings

Monthly payroll run, with Lohnsteuer and social contributions calculated, withheld, and filed each month.

Statutory benefits

All statutory benefits administered: annual leave, sick pay, parental leave, notice, and severance where legally triggered.

Compliance & support

Ongoing HR compliance and a single point of contact, for the life of the engagement.

Your questions answered

Straight answers on how PEO co-employment works in Germany.

What is the difference between PEO and EOR in Germany?

With an EOR, the partner is the sole legal employer of your German staff. With a PEO, you and the partner share the employer relationship, you keep more direct control, they handle the administration. In Germany, EOR is more common for market entry; PEO suits specific co-employment structures.

For most companies, EOR is simpler and faster, especially with no German entity. PEO fits when you want to share rather than outsource the employer role, or have a structure that calls for it. We assess your situation and recommend honestly.

It depends on the structure. Some co-employment arrangements assume or work alongside an entity (a GmbH). If you have no entity and want none, EOR is usually the cleaner route. We will confirm which applies to you.

The administrative employer functions, payroll, Lohnsteuer, social insurance, statutory benefits, and filings, are handled by the partner. We make sure the arrangement is structured so responsibilities are clear and German law is met.

The statutory employer cost (employer social contributions of roughly 21.1% of gross, plus industry-rated accident insurance) plus a partner service fee for the co-employment administration. We benchmark across our network for pricing typically below going direct.

Yes. These models sit on a spectrum and the right one changes as you grow. We advise on the path and manage transitions, EOR to PEO, or either to your own GmbH, as your German presence develops.

Not sure whether PEO or EOR is right for Germany?

Tell us your structure and headcount and we will give you an honest recommendation, usually within a day, plus pricing you will not get direct. No product push, just the right fit.

Tax and labour data verified June 2026 (official German sources, PwC, OECD). Figures change; we confirm the current position when we scope your hire.