The Insider's Guide to Hiring in Germany

Germany Employee Resignation

Notice

Form

Written form on paper with original signature is legally required under § 623 BGB. Email, fax, or verbal resignation is invalid and has no legal effect.

Notice period

• Standard statutory notice: Four weeks (to the 15th or end of a calendar month)

• Longer periods may apply if agreed in the contract or collective agreement

• During probation: Two weeks

Payment in lieu of notice or notice waiver

Not legally permitted unilaterally. However, both parties may mutually agree to waive or shorten the notice period. Otherwise, the employee must work through it.

End-of-Service Benefits

Severance/Gratuity

No statutory severance is owed when an employee resigns voluntarily.

Exceptions

• If contract, company policy, or collective agreement provides for it

• If part of a negotiated separation agreement

Other Benefits

• Accrued unused vacation days must be paid out or taken during the notice period

• Any outstanding salary, bonuses, or commissions must be paid

• You must ensure all social contributions are made up to the final day of work

Termination Documentation

You must provide:

• Work Certificate (Arbeitszeugnis): Must be issued upon request. Can be simple or qualified (includes performance and behavior)

• Final payslip

• Any documents related to benefits, company property return, etc.

• Confirmation of employment end date (for social security and unemployment office)

Employer Termination With Cause in Germany

Acceptable grounds

Under § 626 BGB, you may terminate employment with immediate effect (for cause) if there’s a serious breach of contract or trust that makes continued employment unreasonable, even during the notice period.

Common accepted grounds:

• Theft, fraud, or embezzlement

  • Willful damage to property

  • Severe insubordination

  • Workplace violence or harassment

  • Disclosure of confidential company information

Notice

Form

Must be in writing with original signature (§ 623 BGB). Verbal or electronic termination is legally invalid.

Notice period

Immediate termination—no notice period applies under § 626 BGB. You may also opt for ordinary termination with notice if misconduct isn’t severe enough for immediate dismissal.

Payment in lieu of notice or notice waiver

Not applicable—there’s no notice period to waive.

End-of-Service Benefits

Severance

No statutory severance is owed in terminations with cause.

Other Benefits

• Payment of any earned wages up to the termination date

• Payment of unused paid vacation (only if the dismissal isn’t due to gross misconduct)

• Company property must be returned; final pay may be withheld until return is complete (if agreed in the contract)

Termination Documentation

You must provide:

• Written termination letter with justification for immediate dismissal

• Final payslip

• Social insurance deregistration

Employer Termination Without Cause in Germany

Acceptable Grounds

In Germany, termination without cause refers to ordinary dismissal (ordentliche Kündigung) that follows the legal notice period and doesn’t rely on immediate misconduct.

However, you must still have a legally justifiable reason under the Dismissal Protection Act (Kündigungsschutzgesetz – KSchG) if the employee:

• Has been employed longer than six months, and

• Works in a company with more than 10 full-time employees

Acceptable grounds include:

• Operational Reasons (betriebsbedingte Kündigung): Business closure or downsizing, job redundancy, reorganization or restructuring

• Behavioral Reasons (verhaltensbedingte Kündigung): Repeated minor misconduct (e.g., tardiness), but only after formal warnings

• Personal Reasons (personenbedingte Kündigung): Long-term illness, lack of necessary qualifications, or loss of work permit

Arbitrary dismissal isn’t permitted, even when “without cause” refers to general business reasons.

Form

Must be in writing on paper with a wet signature (§ 623 BGB). Email, fax, or verbal notice is legally invalid.

Notice period

Minimum statutory periods under § 622 BGB (based on employee’s tenure):

Payment in lieu of notice or notice waiver

Not allowed unilaterally. You and the employee may mutually agree to terminate earlier through a settlement or separation agreement (Aufhebungsvertrag). Otherwise, the employee is entitled to work through the notice period and be paid accordingly.

End-of-Service Benefits

Severance

No statutory severance pay required, unless:

• Agreed in employment contract or collective agreement

• Offered voluntarily in a settlement agreement

• Ordered by a court as part of legal dispute resolution

Under § 1a KSchG, if the dismissal is for operational reasons and the employee doesn’t file a lawsuit within three weeks, you may offer severance equal to 0.5 month’s pay per year of service.

Other Benefits

• Payment for any unused vacation days (must be paid out or taken during notice)

• Final salary and prorated bonuses or commissions

• Continued contributions to social security and insurance until termination date

Termination Documentation

You must provide:

• Written termination letter

• Work certificate (Arbeitszeugnis) upon request—can be simple or qualified

• Final payslip

• Notification to health insurer, pension fund, and tax office (via payroll)

• Certificate of employment for the unemployment agency (Arbeitsbescheinigung) if requested

Mutual Termination Agreements in Germany

Notice

Form

Must be in writing per § 623 BGB. Must be signed physically by both parties; digital or oral agreements are invalid.

Typically includes:

• Termination date

• Waiver of future claims

• Final compensation and benefits

• Confidentiality and return of property clauses (if applicable)

Notice period

Not required in mutual termination. Unlike unilateral termination, mutual termination can occur without observing statutory or contractual notice periods. Termination can be effective immediately or on an agreed future date.

Waiver of notice

May be negotiated in the agreement but isn’t mandatory. You may offer severance payment, compensation for waived notice period, or extension of health insurance or other benefits as incentives.

End-of-Service Benefits

Severance

Not mandatory by law for mutual termination.

Severance (Abfindung) is common in practice but must be:

• Explicitly agreed in the termination contract

• Typically calculated using the formula: ½ monthly gross salary × years of service (common benchmark, not legally fixed)

• Pro-rated Bonuses/Commissions/Expenses: Any due and unpaid amounts, subject to contract terms.

• No gratuity system exists under German labor law.

Other Benefits

Pro-rata bonuses

• Unused vacation pay (must be paid out if not taken)

• Retention of company assets (e.g., mobile, laptop, car) is optional

• Outplacement support or reference letters

• Waiver of non-compete clause and/or compensation for it, if applicable

Termination Documentation

• Mutual Termination Agreement: Written and signed, includes all negotiated terms and clear statement that both parties agree to end the contract

• Final Payslip and Payment Statement: Lists all dues (salary, vacation, severance, etc.)

• Employment Reference Letter (Arbeitszeugnis): Must be issued upon request. Can be simple (dates and role) or qualified (includes performance and conduct evaluation)

• Certificate of Employment (Tätigkeitsnachweis): Optional but may be issued

• Social Security Notification: You must notify social insurance carriers of the end of employment

• Unemployment Agency Notification: Employee must register with Bundesagentur für Arbeit at least 3 months before the end date to avoid benefit delays. Mutual termination agreements may affect unemployment benefits (ALG I) eligibility. The employee may face a 12-week blocking period (Sperrzeit) if the agreement is seen as voluntarily giving up employment without valid reason.

Offboarding Process for the End of Fixed-term Contracts in Germany

If the Fixed-Term Contract Ends Normally:

Notice

There’s no statutory notice needed when a fixed-term contract ends on its agreed date or purpose. The contract simply ends automatically upon expiry or achieving the agreed purpose.

End-of-Service Benefits

Severance/Gratuity

There’s no legal entitlement to severance simply because a fixed-term contract ends normally. German law doesn’t automatically grant severance in this scenario unless the contract, a collective agreement, or a social plan provides for one.

Other Benefits

• Unused holiday leave/paid leave
• Certificate of employment (Arbeitszeugnis)

If the Employer Terminates Early:

Notice

If the contract allows early termination (ordinary notice), then the notice periods provided in the contract or by statutory law apply. If no early-termination clause is included, you can’t unilaterally terminate early.

End-of-Service Benefits

Severance/Gratuity

There’s no automatic legal statutory severance merely by early termination of a fixed-term contract, unless provided by contract, collective agreement, or a social plan. However, in practice, severance may be negotiated.

Other Benefits

• Pro rata benefits (unused leave, etc.): Employee should receive pro rata payments for benefits accrued (unused holidays, maybe bonuses if contract provides) up to the termination date
• Notice period pay

Final Payment Timing & Immigration and Visa Compliance in Germany

Final Payment Deadline

Final payment is usually paid with the next regular payroll cycle, unless otherwise agreed.

Penalty

Delays may result in interest on arrears and potential legal action from the employee. Labor courts may award compensation for unlawful delay in final payments.

Visa and Immigration Compliance

For non-EU employees:

• Termination must be considered in light of the employee’s residence and work permit status (e.g., Blue Card, ICT, skilled worker visa)
• Employee is required to notify the local Foreigners’ Office (Ausländerbehörde)
• Residence permit may expire shortly after job loss

Options include:

• Finding a new job (with notification to immigration)
• Applying for change of residence status
• Leaving Germany within the grace period (usually 3 months, subject to permit type)

You aren’t required to inform immigration but may do so as a best practice.