Types of employment contracts in Germany

Hari Krishnan
Sep 18, 2022
3 min read

Like anywhere else in the world, you need to sign an employment contract (Arbeitsvertrag) before you can start working in Germany.

As soon as your employer -to be- finalizes the interview and selects you as their most suitable candidate for the position, they will hand over a work contract (Arbeitsvertrag) with you. It will cover all the details of the agreements of your employment contract.

Employment contract types in Germany

While unlimited or permanent employment contracts are the popular ones, there are several other types of employment contracts as well.

Permanent contract (unbefristeter Arbeitsvertrag)

Unbefristeter Arbeitsvertrag or a permanent contract is an unlimited contract that lasts as long as the employee can work in an organization. It usually starts by a six month long probationary period. The contract may only be terminated if you wish to resign or if the employer finds a valid and legal reason to fire you.

Limited or fixed term contract (befristeter Arbeitsvertrag)

These contracts are valid only for a limited period of time. Usually, these contracts are renewed on the completion of the term. However, if the employer chooses to end the contract after the completion of the period, there’s no chance to question back.

However, a fixed-term contract can only be renewed for three times and not exceed two years.

Minijob contracts

These contracts are for under-skilled part time workers who only get paid below the average salary level. Usually the people who take a minijob contract are paid a salary of up to €450 per month. The employer pays just some or none of the health insurance contribution in a minijob contract. These payments are subsidized by the government.

These contracts are usually popular among students looking for a working contract in Germany as well as expats who are under-skilled.

Additionally, you are not obliged to pay the income tax or social security contributions if you are on a mini job contract. However, you have the same employment rights as permanent employees, such as sick benefits and additional holiday pay.

Freelance contracts

Every freelancer signs a contract with all of their clients to outline their working relationships. Two types of freelancer employment contracts are popular In Germany.

Work contract (Werkvertrag)

A work contract outlines a specific task the freelancer agrees with the client. It mainly focuses on the task rather than the period of time they work for that specific client. For instance, a software developer freelancer may enter a work contract with a client to fix specific bugs in a code. The freelancer then gets an agreed one time payment in exchange.

Services contracts (Dienstvertrag)

A freelancer may offer their service to a customer in exchange for a remuneration in these types of contracts. The contract may detail specific obligations during the period of the contract, period of the agreement and conditions for the contract termination. For instance, a freelance photographer offering his service to a model.

Finally, let it be any kinds of the contract mentiond above, while your employment contract will detail different areas of expectations from you, you may check it thoroughly to avoid any surprises. Below checklist may help you focus on a few very important aspects.