Skip to content

Expand Your Business
in Germany


AUG is a German labour-leasing licence required to assign contractors to Germany and ensure that all contractors are working compliantly under the German tax system.

About Us

Local Presence

Work Permits

100% Compliant

Health Insurance


What are the available methods of working in Germany and what are their pros and cons?


This is a standard form of employment – you officially work for a company who pays you a monthly salary.


  • Enrolment in the social security system, which includes health insurance, unemployment benefits, pension, paid time off and sick leave.
  • Job security due to protection by German employment laws.
  • Job stability – contracts are generally open-ended.
  • Income tax is deducted from your salary, so you do not need to worry about calculating how much you have to pay.


  • Lower retention rate compared to other solutions due to social security payments.
  • More and more companies are looking towards independent contractors rather than employees, so it could be more difficult to find such employment, especially as a foreigner.
  • Less flexibility – you do not get to choose the projects that you can work on, you must work on the tasks assigned to you by your employer.
  • Formal working hours – you may have to work “9-5”, as determined by your employment contract, rather than being able to determine your own working hours.


This includes independent contracting, or freelancing – you provide services to a company based on a limited contract, while not being officially employed by them. This could be a contract for up to several years where you get paid monthly, or a limited one where you are contracted to do a specific project and then part ways.


  • Possibility of gaining a higher rate of pay.
  • Freedom to choose projects that interest you.
  • Freedom to choose your own working schedule.
  • Laws are sympathetic towards this type of employment – you can deduct a lot of different expenses from any sales tax you have to pay.
  • No need to pay any social security contributions, meaning a higher take-home pay


  • No social security benefits.
  • Must have independent health insurance.
  • May be terminated without cause once an extendable contract runs out.
  • You will need to sort out payments of income tax and social contributions yourself, or you could consider engaging a payroll company like AUGSIGHT GmbH.
  • Need to pay an additional sales tax if you earn over 22,000 a year.
  • Must have a residence permit.
  • There can be a fine line between self-employment and regular employment. If, for example, you end up doing too much work exclusively for a specific company, you could be classified by an audit as falsely self-employed, which can result in very hefty fines and the possibility of some legal action against you/your client.

What’s labour leasing in Germany? All about AüG Licence

Labour Leasing in Germany

Labour leasing, also known as temporary employment or Arbeitnehmerüberlassung (AÜG) in Germany, is a type of employment in which an employer (the leasing company) rents out its employees to other employers (the client companies) for a fee. The employees remain employed by the leasing company, but they work at the client company’s premises and under the client company’s direction.

Labour leasing is a popular way for companies in Germany to meet their staffing needs, especially for short-term or project-based work. Employers can also use it to cover absences or hire employees with specialised skills that are difficult to find.

The AüG Licence

To operate a labour leasing business in Germany, a company must obtain an AÜG licence from the Federal Employment Agency (Bundesagentur für Arbeit). The BfA grants licences to companies that meet specific requirements, such as having a satisfactory financial standing and having a management team with the necessary experience and qualifications.

The AüG licence is valid for one year and needs annual renewal. The Federal Employment Agency also conducts regular inspections of licence holders to ensure that they comply with all of the relevant laws and regulations.

What is an Employer of Record Service (EOR) in Germany?

An Employer of Record (EOR) in Germany is a company that has an AÜG (Arbeitnemeruberlassung) Licence which is mandatory if they want to hire foreign employees.

The EOR is generally responsible for payroll, taxes, contracts, work permits, social security contributions, and other aspects of employment that are related to compliance.

In a lot of cases, companies who do not have this licence enter in a three-way agreement between themselves, an official EOR, and an employee, which allows them to hire employees without getting an AÜG Licence and outsource their payroll and other employment aspects to the EOR.

A contract with an EOR can last up to 18 months; after that time, you can choose to become a legal full-time employee of the company you were doing the work for.

If you are an employee working in Germany, make sure that the company you are selling your services to either has this licence, or is in agreement with an EOR who will become your official employer.

Here are just some of the services we offer in Germany:

  • Assistance in obtaining the necessary visas/work permits for employees from third countries.
  • Registering employees with the tax and social security office.
  • Providing consultations on German labour regulation & benefits.
  • Setting up the Payroll system compliantly.
  • Submitting wage tax returns and national insurance forms.
  • Keeping our clients up-to-date and compliant with changes in German regulations.

When am I considered a tax resident of Germany?

You are a tax resident of Germany if you meet one or more of the following criteria:

  • You have a domicile in Germany for personal use.
  • You have a “customary place of abode” in Germany and do not only stay temporarily in the area. The trigger is when an individual spends a continuous period of 6 months in Germany.
  • You have a centre of vital interests in Germany, meaning you have a solid personal and economic connection to Germany.

If you are a tax resident of Germany, you are liable to pay German income tax on all of your worldwide income.

Working in Germany if you’re not from the EU/EEA or Switzerland

If you want to work in Germany, you will likely need to obtain a residence permit; this is a type of visa which includes a work permit.

EU, EAA, Switzerland

Citizens of the above countries do not need a visa to live or work in Germany. However, for stays longer than 90 days, you must register your stay at a local Residence Registration Office, or Immigration Office.

USA, Canada, Australia, New Zealand, Israel, Japan, South Korea

If you are a national of one of the above countries, you do not need a visa to enter Germany. You can search for a job, and then apply for the permit in the country directly at an Immigration Office.

Other non-EU Nationals

If you are a national in any other country, you need to secure a job offer before you can enter Germany. After you get the offer, you need to apply for an entry visa at your local German consulate or embassy, and only then you can enter the country and apply for the permit there.

Health insurance in Germany

Health insurance in Germany is mandatory for all residents, including contractors/employees. There are two main types of health insurance in Germany: public health insurance (Gesetzliche Krankenversicherung, or GKV) and private health insurance (Private Krankenversicherung, or PKV). At AUGSIGHT GmbH we partner with trusted insurance providers, that can help you get the right coverage.

How can an Umbrella Company like AUGSIGHT GmbH help with contracts in Germany?

We provide a full set of services in Germany, allowing corporate clients, recruitment agencies and professional contractors/employees to operate in an optimal manner, while ensuring that all local compliance obligations are taken care of.

AUGSIGHT GmbH offers the following services in Germany:

  • Contract Management
  • Outsourced Payroll
  • Employer of Record (EOR)
  • Work Permits & Immigration Assistance

In need of more information?

Our Services

Payroll Outsourcing

Health Insurance

Employer of Record (EOR)

Work Permits


Anna Stancheva

We’ve certainly had a positive experience working with your company.

Simon Hahn

Greatest appreciation to your team for the outstanding job they did for our company. We feel privileged to have Augsight as our AuG partner.

Tobias Santo

Always available to answer any questions. Very knowledgeable about their services they provide. Would recommend to anyone. 


What is an AÜG Licence

The fourth largest economy in the world, Germany is well known for its contribution to technological advancements, the automotive industry and science. The country is also home to a massive pool of qualified professionals, especially in...

Our Services in Germany

We are delighted to share with you our latest corporate brochure, which includes information about our solutions/services in Germany. We hope that you find it both interesting and useful. Please get in touch with us at...

All News

Contact Us