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Types of employment contracts in Germany

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Types of employment contracts in Germany
Types of employment contracts in Germany

There are several different types of employment contracts in Germany. However, permanent employment contracts are by far the most common.

Permanent labour contract (unbefristeter Arbeitsvertrag)

A permanent contract (unbefristeter Arbeitsvertrag) is for an unspecified, indefinite period. It will usually contain a six-month probationary period, after which your agreement can only be terminated if you resign or the employer finds legal grounds to dismiss you (strict guidelines are governing this).

Fixed-term labour contract (befristeter Arbeitsvertrag)

Fixed-term labour contracts (befristeter Arbeitsvertrag) are valid for a specific period. They may be renewed once this period has elapsed, but the employer is not obliged to do so. A fixed-term contract can be renewed a maximum of three times, provided the total length of employment does not exceed two years.

Contract with a recruitment agency

With this type of contract, you are employed by the recruitment agency (Personalegentur) rather than directly by the employer. The agency is therefore responsible for paying your salary. Temporary contracts of this type can only be for a maximum of 18 months, and you are entitled to the same remuneration and benefits as the customer company’s permanent employees.

Mini job contract

Mini jobs (Mini jobs) are a form of marginal employment in Germany. A mini-job describes a work contract where the employee earns 450 euros per month (450-Euro-Mini jobs) or works less than three months or 70 days per year (Kurzfristige Mini jobs). Mini jobs can be taken alongside your primary job to supplement your wage or as your main form of income.

If you have a mini-job, you are not liable to pay income tax or social security contributions. Still, you have the same employment rights as permanent employees, such as sickness benefits and holiday pay.

Freelancer contracts

If you are a freelancer, you will typically draw up a contract with your clients to define your working relationships. In Germany, there are two types of freelancer employment contracts:

Contract for services (Dienstvertrag)

By signing a contract for services (Dienstvertrag), freelancers make their services available to the client in exchange for remuneration. The contract will usually detail any specific obligations, the length of the agreement and conditions for the contract termination.

Contract for (specific) work (Werkvertrag)

A contract for work (Werkvertrag) differs from a contract for services mainly because it concerns a specific job rather than a period. The freelancer will undertake to produce or repair something in exchange for a one-off fee. Therefore, the service is usually only provided once.

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