German Economy and Business Practices

German Economy and Business Practices

Business Hours

    normal working hours: 9:00am – 5:00pm retail opening hours: German states have different regulations. Opening hours vary. 24h shopping on Sundays is only available at certain gas stations and at other sites related to travel.


Wages and Productivity

When compared internationally, wages in Germany are among the highest in the European Union and worldwide. Average industry wages in 2005 were 27.9 EUR (Western Germany) respectively 17.4 EUR (Eastern Germany) per hour. Nonetheless, German labor is known to be productive and skilled. German quality is famous throughout the world.

Labor Law

German Economy and Business Practices

Unions are powerful and large in Germany. Workers are protected by strong labor laws that provide them with many different rights. They are much more substantial than in the U.S. Here are some examples:

  • Ordinary dismissal of workers must be proceeded by notice, which depends on the duration of the time the employee was with the company. It may vary from 1-7 months. The employee may also challenge the dismissal in court.
  • The Mother Protection Law grants a mother a total of 36 months leave. Six weeks prior to the birth and eight weeks thereafter are on paid leave. The mother and the employer can agree on a parental leave (max. 36 months), after which the employer will provide her with the same job she had prior to the birth of the child.
  • Social Security and Health Care costs are equally split between the employee and the employer.
  • Average working hours are 37.5 hours/week and annual leave varies between 20 and 30 working days.
  • For additional information on labor in Germany please visit the Central Office of the Employment Agency.


  • value-added tax: 19% reduced value-added tax (e.g. food and books): 7% corporate income tax on distributed and undistributed income: 25%