Working in Germany – Types of Employment

Introduction

In Germany, there are many different types of employment relationships. Each form of employment has its own rules – for example regarding taxes, insurance, working hours, and employee rights. If you want to work or study in Germany, it is important to understand these differences – especially when it comes to residence permits, health insurance, or financial planning.

a man filling out a form
In Germany you need to do a lot of paper work, especially when it comes to employment relationships.

In this article, you will find an overview of the most common types of employment:

To understand these types of employment you need to know some of the following terms.

Social Insurance, Health Insurance & Taxes

Overview: Social Insurances

Germany has a mandatory social insurance system that protects you in everyday life. It covers five areas:

  1. Health insurance – pays for doctor visits or hospital treatment
  2. Long-term care insurance – supports you in case of illness or when care is needed in old age
  3. Pension insurance – secures your income in retirement
  4. Unemployment insurance – helps if you lose your job
  5. Accident insurance – covers work-related accidents (paid by the employer)

Depending on the type of job, you may be automatically insured, voluntarily insured, or responsible for your own coverage (e.g. with mini-jobs or self-employment).

A woman who is taking notes while another woman explains her the contract
You have several options of health insurances. Read the contracts carefully.
Good to know: Health Insurance

Health insurance is mandatory in Germany. You are either insured under the public health system (e.g. AOK, TK) or privately insured. If you are employed, your contributions are usually deducted automatically from your salary. In mini-jobs or self-employment, you often need to arrange insurance yourself.

More information: https://www.bmas.de/EN/Social-Affairs/Social-insurance/social-insurance.html

Good to know: Taxes and Payslips

If you work regularly, you will usually have to pay income tax (Lohnsteuer). Your employer deducts this from your gross salary – so you receive your net salary (what remains after deductions).

Gross = your salary before deductions
Net = what you actually receive

The amount of tax depends, among other things, on your tax class (e.g. single, married, single parent).

More information:
https://www.bundesfinanzministerium.de/Web/EN/Issues/Taxation/taxation.html

Permanent and Fixed-Term Employment

Permanent employment means you have a work contract without a set end date. Many people prefer this form because it offers stability. However, it can still be terminated by you or your employer – with proper notice.

Fixed-term employment has a set end date from the start – e.g. six months or one year. Common reasons include:

  • project-based work,
  • maternity or parental leave replacement,
  • Trial period before a permanent offer.

In Germany, fixed-term contracts without a specific legal reason can only be extended twice, for a maximum total of two years. After that, the employer must offer a permanent contract or end the employment.

Part-Time and Full-Time Employment

annual calendar
Besides the End date of working, you can also choose the Job by how many hours you work per day.

The difference lies in the number of hours worked per week.

  • Full-time usually means 35 to 40 hours per week
  • Part-time means fewer hours – e.g. 20 or 30 hours

Part-time employees generally have the same rights as full-time employees – such as paid vacation, protection against dismissal, and continued pay during illness.

Part-time work is often ideal for people with family responsibilities, for career re-entry, or for students working alongside their studies.

Mini-Job and Midi-Job

Mini-Job

A mini-job is a form of marginal employment where you earn no more than €538 per month. As an employee, you generally don’t pay taxes or most social contributions, but you are not automatically covered by health insurance. Mini-jobs are popular for students, retirees, or people with limited time.

a man who is working in a café
A lot of people have Minijobs in restaurants or cafés.
Midi-Job

A midi-job falls between a mini-job and a regular part-time position – with monthly earnings between €538.01 and approximately €2,000. Unlike mini-jobs, you are covered by social insurance, but your contributions are reduced. A midi-job offers more stability and is a good option for earning a bit more without taking on a full workload.

Student Jobs (Werkstudent)

This employment type is designed for students who want to work while studying.

a woman who is working on a computer in an office
Usually you choose this job based on your field of study.

Key conditions:

  • You must be enrolled at a university or college
  • You may work up to 20 hours per week during the semester

Benefits:

  • You pay fewer social contributions, especially no health, care, or unemployment insurance
  • You gain valuable work experience in your field of study

Note: During semester breaks, you can work more hours – but be aware of yearly income limits, especially if you receive BAföG (student financial aid).

Internship

Two people who are wokring together at a project
In comparison to the student job (Werkstudent), sometimes you don’t get money for Internship within the first 3 months.

Mandatory Internship:

  • Part of your study program or vocational training
  • Does not have to be paid (minimum wage does not apply)

Voluntary Internship:

  • Can be done before, during, or after your studies
  • Minimum wage applies from the third month

Internships are great for gaining experience and networking. However, be careful not to be taken advantage of – an unpaid “extended internship” without a future plan is usually not worth it.

Self-Employment and Freelancing

If you are self-employed, you work for yourself – for example as a translator, designer, or IT specialist. Even small services like tutoring or help in the neighborhood can count.

Freelancers can either work in a company for a few months, or work from home, depending on the type of work or the company you work for.

Differences from regular employment:

  • No employer – you work for clients or customers
  • You are responsible for your own insurance (health insurance is mandatory)
  • You must handle your own taxes and accounting
  • You do not receive sick pay or paid vacation – but you have more freedom in organizing your work

Freelancers are a special type of self-employed worker – e.g. in healthcare, education, art, or journalism. They usually don’t pay trade tax but must meet specific professional requirements.

Temporary Employment (Leiharbeit)

With temporary employment, you are not directly hired by the company where you work. Instead, you are employed by a staffing agency and “loaned” to other companies.

Production workers are mostly temporary employers, especially in seasonal companies.

This means:

  • Your contract is with the agency, not the client company
  • You are paid by the agency
  • You have the same basic rights as other workers – but your pay may differ

Advantages:

  • A way to enter the job market with little experience
  • Flexible, often quick to start

Disadvantages:

  • Often lower pay than regular employees
  • Less job security – you may not know how long work will be available

Conclusion

There are many ways to work in Germany – full-time, part-time, as a student, or self-employed. It’s worth learning about the pros and cons of each type early on so you can make the best choice for your situation.