1. Planning: are you ready to hire your first employee?
Before you start, answer these questions:
- Role and tasks: Which specific tasks will your employee take on?
- Working hours: Part-time, full-time or flexible models such as flexitime or working from home?
- Budget: Can you fund the salary including non-wage labour costs over the long term?
- Workplace: Do you have the equipment needed (for example an office, computer, software or tools)?
- Onboarding: Do you have enough time to onboard your first employee properly?
2. Legal basics and employer duties
To be on the safe side legally, take care of these basics:
- Apply for a company number (Betriebsnummer): needed to register with social security
- Register with the employers' liability insurance association (Berufsgenossenschaft): mandatory insurance against workplace accidents
- Social security: your employee must be registered for health, pension, unemployment and long-term care insurance
- Tax office / ELStAM: retrieve the electronic wage tax data
- Follow employment law: in particular the Evidence Act (Nachweisgesetz), which requires the essential contract terms in writing
3. Your employee's documents
For registration and payroll you need the following information:
- Personal details (name, date of birth, address)
- Tax ID and health insurance fund
- Social security number
- depending on the job: health certificate, residence permit or certificate of good conduct
4. Employment contract: the core of every employment relationship
A clearly worded employment contract protects you and your employee. It should contain at least:
- Names and addresses of employer and employee
- Start date (and end date for fixed-term contracts)
- Place of work and job description
- Working hours and overtime rules
- Pay (salary, supplements, due date)
- Holiday entitlement
- Notice periods
- Reference to collective agreements or works agreements, if any
Optional but useful additions can include: probation period, secondary employment, confidentiality clauses, rules on working from home.
5. Registration and reporting duties as an employer
Once the contract is signed, you must register your employee correctly:
- With the health insurance fund (social security notification)
- With the employers' liability insurance association (accident insurance)
- With the tax office via ELStAM (wage tax data)
6. Onboarding: getting off to a good start
A good start is crucial for motivation and retention. So pay attention to:
- An onboarding plan with clear tasks
- Providing work equipment (laptop, software, login details etc.)
- Introducing the team and your company culture
- Regular feedback meetings in the first few weeks
7. Avoid common mistakes
- Late or incorrect notifications to the health insurance fund or tax office
- Vague contracts without clear rules on working hours or overtime
- Underestimated budget: do not forget the employer's share of social security
- No structure in onboarding: often leads to frustration and misunderstandings
Support with payroll and administration from cleverlohn
With your first employee you will quickly notice how complex topics like payroll, social security and notifications can become. Digital solutions like cleverlohn automate many of these steps for you. Salaries are calculated correctly, notifications to health insurance funds are taken care of and you always keep track of your employer duties. This saves time and gives you certainty. You can then focus fully on your company and your growing team.
Conclusion
Hiring your first employee marks the start of a new phase for your company. Know your employer duties, set up the employment contract properly and ensure good onboarding. You then benefit twice: legal certainty and a motivated employee who supports you for the long term. With the right preparation, your first employee becomes the starting point for your growing team.
