Which employer contributions does the employer pay for social security?

Usually around 22 percent of the gross salary: health insurance about 8 percent (shared equally), pension insurance about 9.3 percent, unemployment insurance 1.3 percent, long-term care insurance 1.8 percent (childless people more) plus the U1 (sickness) and U2 (maternity) levies as well as the insolvency benefit levy. For mini-jobs (520 euros) a flat 30 percent applies. For apprentices, partly reduced rates apply.

What does a workplace cost on average per year?

Highly dependent on the job. In the office: around 1,500 to 2,500 euros per year and employee (desk, PC, software, proportional rent). In the trades: 3,000 to 5,000 euros (tools, work clothing, proportional vehicle, training). Do not forget mobile phone, professional liability and work clothing — it all adds up.

Employee Cost Calculator 2026 — What Does an Employee Really Cost?

Employee data

Salary

Gross monthly salary

€/month

The agreed gross salary before deductions. 12 monthly salaries make up the annual salary.

Employer social security contributions: 22 %

Health, pension, unemployment and long-term care insurance plus the U1/U2 levies. The default of 22 % corresponds to a regular employee.

Working time

Working hours per week

h/week

Full-time is usually 38-40 h, part-time correspondingly less.

Holiday days/year

Usually 25-30.

Sick days/year

German average: 12-15.

Training/year

Default 5 days.

Workplace

Workplace costs per year

€/year

PC, software, tools, work clothing, proportional rent, mobile phone. Office 1,500-2,500 €, trades 3,000-5,000 €.

Training & equipment per year

€/year

Courses, certifications, books, external training.

True hourly cost

38 €

per productive hour

Gross hourly wage would only be

20 €

Markup: +88 %

Full-cost breakdown

Gross annual salary 42.000 €

+ Employer contributions (22 %) 9.240 €

+ Workplace & training 3.500 €

= Full costs per year 54.740 €

Productive hours/year 1.432 h

= True hourly cost 38 €

Recommended selling hourly rate: 60-75 €

At least 1.5× to 2× the true costs — otherwise no profit for acquisition, administration and growth.

See profitability per project live

In Awerka you store this value as the internal hourly rate per employee. On every project you then instantly see: what does it cost vs. what does it bring in?

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Why the gross hourly wage is misleading

Anyone who divides the gross monthly salary by the monthly hours gets a nice but wrong number. The true hourly cost calculation has to add four things:

1. Employer contributions (around +22 %)

Health insurance, pension insurance, unemployment insurance, long-term care insurance and various levies (U1 sickness, U2 maternity, insolvency benefit). As the employer you pay these contributions on top — the employee does not see them on their payslip, but you as the boss see them every month on the payroll tax return.

2. Paid absences

Holidays, sickness, public holidays and training days are paid, but nothing is sold productively. With 30 days of holiday, 12 sick days, 11 public holidays and 5 training days you reach 58 absence days — that is 22 % of all working days. Out of 1,840 theoretical annual hours only about 1,430 productive hours remain.

3. Workplace costs

Every employee needs a workplace: PC, software, tools, work clothing, proportional rent, mobile phone, professional liability. In the office 1,500-2,500 € per year quickly add up, in the trades more like 3,000-5,000 €.

4. Training & equipment

Courses, certifications, new tools, external training. Anyone who saves here falls behind in the medium term — and employees who cannot develop are the first to quit.

Practical tip: Multiply the true hourly costs by at least 1.5 for your selling hourly rate. The markup covers acquisition, administration, investments and profit. For an employee who truly costs you €38/h, you should charge €60-75/h.

Frequently asked questions

Because your employee does not actually work productively during every paid hour. Holidays, sickness, training and public holidays are paid too — but productive are only the days in between. On top of that you pay around 22 % in social security contributions and finance the workplace, tools and software. From 20 € gross you quickly reach 38 or 40 € in true hourly costs.

Usually around 22 % of the gross salary: health insurance about 8 % (shared equally), pension insurance about 9.3 %, unemployment insurance 1.3 %, long-term care insurance 1.8 % (childless people more) plus the U1 (sickness) and U2 (maternity) levies as well as the insolvency benefit levy. For mini-jobs a flat 30 % applies. For apprentices, partly reduced rates apply.

The national average is about 12-15 sick days per year and employee (source: TK, AOK). In the trades and physically demanding jobs it is often higher (15-18 days), in pure office jobs somewhat lower (10-12 days). Better to plan a little more than too little — sickness cannot be planned, but it is certain.

Highly dependent on the job. In the office: around 1,500-2,500 € per year and employee (desk, PC, software, proportional rent). In the trades: 3,000-5,000 € (tools, work clothing, proportional vehicle, training). Do not forget mobile phone, professional liability and work clothing — it all adds up.

At least 1.5× the true hourly costs, better double. Otherwise you have no reserves for acquisition, administration, investments and profit. Anyone who sells an employee with 38 € true hourly cost for 45 € is burning money. 60-80 € selling price would be appropriate. In Awerka you can store the internal hourly rate per employee and immediately see whether projects are running profitably.