Important documents for starting work
Have you found a permanent job in Germany? Then you are an employee. You need several documents for your employer. First you need proof that you have health insurance. You can get this proof from your health insurance company. In Germany everyone has to have health insurance. Normally you also need a national insurance card. You can get this from the health insurance company too. You often need a police clearance certificate as well. You can get this from the residents‘ registration office.
Insurance and tax
As an employee you also have pension insurance and unemployment insurance. But you don’t have to do anything about that, you have these insurance policies automatically. The employer pays part of your health insurance, pension insurance and unemployment insurance. You pay the rest. That is deducted automatically from your wages/salary. You also need a tax code and an electronic income tax card. You can get both of these from the tax office. You don’t have to set up payment of the taxes yourself. The tax office takes the taxes straight out of your wages/salary.
Every employee gets an employment contract. You and the employer sign the contract. Read the employment contract through, paying attention to detail, and only sign it when you have done so. If you are unsure, ask: adults can consult Migrationsberatung für erwachsene Zuwanderer (Migration advice for adult immigrants; MBE). Children and young adults up to the age of 27 can obtain information from the Jugendmigrationsdiensten (youth migration services; JMD). All the rules are in the employment contract. You and the employer must adhere to these rules. Other information is provided here, such as: how much do you earn each month? How much holiday entitlement do you have? What do you have to do if you are sick?
You normally have a trial period in a new job. The length of the trial period varies. Sometimes it’s only a few weeks, sometimes six months. The employer observes you more closely during the trial period. He decides whether you will continue to work in the company after the trial period. And you decide whether you want to continue with this job after the trial period. The period of notice is shorter during the trial period (usually two to three weeks), after that it is normally 3 months.
In Germany there are also minijobs / 450 Euro jobs. A minijob is a job where you can only earn up to 450 € per month. You automatically get health insurance and pension insurance with these. But only the employer pays these contributions, you pay nothing. However you do not have unemployment insurance.
Do you work for yourself, in other words you are not an employee? Then you still need health insurance. However you have to pay for the health insurance yourself. It’s also a good idea to have pension insurance. In some professions, such as mechanics or midwives, it is compulsory to have pension insurance. Go to the tax office and apply for a tax number. The tax office will want to know your estimated annual profit. Then it can decide how much tax you pay. You have to transfer funds from your bank account to pay the taxes. If you want to set up your own company, you need a trading licence. This is available from the trade licensing office. You can ask at the town hall where to find the trade licensing office in your town or city. For instance, even if you want to open a shop or restaurant you need a trading licence.
Frequently asked questions
Do I need health insurance?
Yes. In fact you have to have health insurance in Germany. If you are ill, then the health insurance pays for you to see a doctor, your hospital treatment and some of your medication. What if you are sick for more than 6 weeks and are unable to work? Then your employer will stop paying your salary/wages. In this situation the health insurance company will pay a proportion of your salary/wages as well.
Do I have to pay pension insurance?
As an employee you have to pay pension insurance. If you are self-employed you can have pension insurance but it is not compulsory. In some professions – such as midwife or mechanic – you have to have pension insurance even if you are self-employed.
The taxes are very high. How can I reduce my tax bill?
Taxes are the same for everyone. They are calculated according to your gross salary. At the end of the year you can submit a tax return, then you might get money back.
I don’t like my new job. What can I do?
During your trial period you can terminate your employment at relatively short notice. But your unemployment insurance will not pay you anything for the first three months if you hand in your notice.