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Germany PEO (Germany Professional Employer Organization)

Key Takeaways

  • This article provides a comprehensive understanding of Professional Employer Organizations (PEOs) in Germany, their workings, benefits, and potential downsides.
  • It sheds light on the top five leading PEOs operating in Germany: Lano, Horizons, People2.0, Globalization Partners, and Remote.
  • The article presents a well-rounded view of PEOs in Germany to help businesses make informed decisions about leveraging these services.
  • The FAQ section towards the end of the article resolves two of the most commonly asked questions regarding PEOs in Germany.

What is a Germany PEO?

Professional Employer Organizations (PEOs) in Germany provide comprehensive HR solutions for companies. These organizations offer services including, but not limited to, payroll administration, employee benefits, tax compliance, and risk management. In essence, PEOs act as a co-employer to your workforce, meaning they technically employ your personnel while your company maintains day-to-day control and management over them. German PEOs, just like their global counterparts, are instrumental in easing the administrative burden for businesses, but they also offer unique benefits aligned with Germany’s regulatory landscape.

How Does a Germany PEO Work?

The fundamental operating principle of a PEO in Germany is similar to PEOs in other parts of the world. They form a co-employment relationship with the client company. The PEO becomes the employer of record for tax purposes and for compliance with labor laws, while the client company continues to manage the employees’ daily activities.

The PEO takes care of tasks like payroll administration, compliance with employment regulations, tax filings, and provision of employee benefits. They ensure that the client company is compliant with German labor laws, which are known for being comprehensive and stringent. The PEO also handles all the administrative tasks related to employee management, allowing the client company to focus on their core business operations.

What Are the Benefits of a Germany PEO?

PEOs in Germany offer numerous advantages:

  1. Compliance: Germany has complex labor laws and regulations. A German PEO ensures that your business remains compliant, mitigating the risk of penalties or legal complications.
  2. Efficiency: PEOs streamline HR processes, enabling businesses to focus on core operations instead of administrative tasks.
  3. Cost Savings: PEOs often provide services at lower costs than hiring full-time, in-house HR professionals.
  4. Access to Expertise: German PEOs employ experts in local labor laws, payroll, and HR, providing a wealth of knowledge and experience to client companies.
  5. Employee Benefits: PEOs can offer a wider range of employee benefits than small businesses might afford on their own, attracting and retaining quality talent.

What Are the Disadvantages of a Germany PEO?

Despite numerous advantages, there can be potential downsides to using a PEO in Germany:

  1. Less Control: Since the PEO becomes the employer of record, businesses might experience a perceived loss of control over certain HR functions.
  2. Potential for Conflicts: If the PEO’s policies and procedures differ significantly from the company’s culture, it may lead to conflicts.
  3. Dependence on PEO: Businesses may become dependent on the PEO for essential HR services, which could be problematic if the relationship ends.

Top 5 Leading Germany PEOs:

  1. Lano: Known for its comprehensive global HR solutions, Lano simplifies the complexities of international employment, including in Germany. Their team of experts and efficient software ensures compliance and streamlined HR operations.
  2. Horizons: Horizons, with its in-depth knowledge of German labor laws and HR practices, provides comprehensive PEO services. They assist with everything from hiring to payroll, ensuring complete regulatory compliance.
  3. People2.0: This global workforce deployment platform has earned a reputation for efficient and flexible solutions. People2.0’s understanding of German employment regulations and their focus on compliance make them an excellent PEO choice.
  4. Globalization Partners: This PEO stands out with its ‘GoGlobal’ platform, providing a seamless solution for companies looking to expand into Germany. Their offerings cover HR, payroll, and legal compliance.
  5. Remote: Remote excels in providing a tech-driven PEO service. Their robust platform ensures that all employment tasks, from onboarding to offboarding, comply with German laws.


Using a PEO in Germany can significantly ease HR operations, ensure compliance, and save costs. However, it’s essential to understand potential downsides and to choose a reputable PEO that aligns with your business needs. The five leading PEOs—Lano, Horizons, People2.0, Globalization Partners, and Remote—have proven track records in providing excellent PEO services in Germany.


The cost of PEO services in Germany depends on various factors, such as the number of employees and the range of services required. However, given the savings in time, compliance risk mitigation, and HR efficiency, many businesses find PEO services to be cost-effective.

Yes, one of the key benefits of a PEO is aiding foreign companies in navigating local employment laws and regulations. PEOs can significantly simplify the process of setting up operations in Germany for foreign companies.