German leave has a reputation for being generous, and the reputation is deserved. The part that most often causes payroll mistakes is not the length of the entitlements but who pays for each one and how the funding passes from one payer to another. The employer funds some leaves in full, the health insurer funds others, the state funds parental money directly, and public holidays change depending on which Bundesland the employee works in. For anyone running German payroll, or any worker checking what they are owed, the clearest way to keep the leaves straight is to ask three questions of each leave type: how long is the leave, who pays for it, and what triggers the entitlement. Let me go through the main entitlements on that basis.
Annual leave: a modest legal floor, a generous norm
The statutory minimum under the Federal Leave Act (Bundesurlaubsgesetz) is 24 working days a year based on a six-day week, which works out to 20 days on the five-day week most people actually work. That floor is lower than most newcomers expect, and quoting the statutory minimum on its own is misleading, because almost every employment contract and collective agreement grants more, typically 25 to 30 days. The real entitlement for a given worker is whatever the contract says, as long as that figure is at or above the statutory 20.
Two things about annual leave matter for payroll: how the pay is calculated, and how the statutory minimum is protected. Vacation is paid at full salary, calculated on recent average earnings, so vacation pay is not simply the base rate. And the statutory minimum is strongly protected. A worker cannot sign the minimum away; the courts confirmed again in 2025 that the statutory minimum cannot even be waived in a settlement; and those days do not quietly lapse at year-end unless the employer actually warned the worker in time that the days were about to expire. Leave also keeps accruing while a worker is off sick, and if a worker falls ill during their holiday, the sick days do not count against the vacation.
Public holidays: nine to thirteen, depending on the state
Germany has no single national list of public holidays. There is a small set observed everywhere, and then each of the sixteen Bundesländer adds its own, so the total ranges from nine in a state like Berlin to thirteen in Bavaria. Some holidays are specific to regions with a particular religious history, so a Catholic-majority state observes days that a neighboring state does not.
The rule that matters operationally is that the holiday calendar is set by the place of work, not the employee's home or the company headquarters. A business with staff in three states must apply three different holiday calendars, and a worker in Munich simply gets more paid public holidays than a colleague in Berlin. Public holidays are paid by the employer.
Sick leave: six weeks at full pay, then the insurer
Sick leave is the German feature worth understanding best, because the rule puts real cost on the employer up front. Under the Continued Remuneration Act (Entgeltfortzahlungsgesetz), when an employee is off sick, the employer pays 100 percent of their salary for up to six weeks per illness, once the person has been employed for at least four weeks. Not a reduced rate, the full salary.
After those six weeks, the health insurer takes over with Krankengeld, paid at roughly 70 percent of gross salary and capped so the benefit does not exceed about 90 percent of net, for up to 78 weeks for the same illness within a three-year window. The worker needs a doctor's certificate of incapacity, now transmitted electronically between the doctor, the insurer, and the employer. So the cost of an illness is split cleanly by time: the employer pays full salary for the first six weeks, and from the seventh week onward the health insurer pays Krankengeld at the reduced rate for up to 78 weeks, with no further wage cost to the employer.
Family leave: separate the leave from the money
German family leave is where the vocabulary causes the most confusion, so it helps to keep two ideas apart: the protected time off, and the payment that may or may not run alongside it.
Maternity protection (Mutterschutz) comes first. An expecting employee has a protected period of six weeks before the birth and eight weeks after, extended to twelve weeks after birth for premature or multiple births. During the after-birth period she may not work at all. The pay during Mutterschutz is a combination: a maternity benefit from the health insurer plus an employer top-up that brings her up to her normal net pay, so she is made whole. A 2025 change extended protection to cover miscarriages from the thirteenth week of pregnancy on a graduated scale.
Then comes parental leave, and this is the pair people mix up. Elternzeit is the job-protected leave itself: each parent can take up to three years per child, with the job held open, and most of it usable up to the child's third birthday and a portion later up to age eight. Elternzeit on its own is unpaid. Elterngeld is the separate money, paid by the state, at roughly 65 percent of prior net income within a band of 300 to 1,800 euros a month, for twelve months, extended to fourteen when both parents share, with a household income ceiling of 175,000 euros for eligibility. The two cover different spans of time: the protected leave lasts up to three years, while Elterngeld is paid for only about one, and confusing the two produces a wrong answer for both the worker and the payroll.
Care leave: short emergencies and longer arrangements
Germany also protects time off to care for a relative. For a sudden situation there is up to ten days of short-term leave to organize care for a close family member, with a wage-replacement benefit from the long-term-care insurance. Beyond that, in larger companies an employee can take Pflegezeit of up to six months, unpaid and job-protected, to care for a relative at home, and a longer Familienpflegezeit of up to twenty-four months on reduced hours. And separately, parents can draw paid child-sickness days (Kinderkrankengeld) from the health insurer to look after a sick child.
What this means for anyone running German payroll
The question that matters most in Germany is always who funds the leave, because the answer changes the payslip and the employer's cost. Annual leave and public holidays are the employer's, paid at full salary. Sick leave is split: the employer covers the first six weeks in full, then the insurer takes over. Maternity pay is shared between the insurer and an employer top-up. Parental money, Elterngeld, comes from the state, while the parental leave itself is unpaid time the employer simply has to hold open. Care leave mixes short paid emergency days with longer unpaid protected periods.
Two things in particular need to be right. First, the public-holiday calendar has to follow each employee's work location, because a multi-state workforce genuinely has different paid days off in Munich, Berlin, and Cologne, and applying one national calendar over-pays some people and under-pays others. Second, the maternity, parental, and sick-pay handovers have to be timed correctly, because each one is the point where funding passes between the employer, the insurer, and the state, and mistiming the handover is what creates the corrections. Flux applies the right entitlement and the right payer for each leave, tracks the holiday calendar by work location, and handles the six-week sick-pay boundary and the maternity and parental handovers, so each leave is paid by whoever actually owes it. For an employer, three practical points cover most of the work. First, check that the contractual vacation entitlement is at least the statutory minimum. Second, apply the public-holiday calendar for each employee's Bundesland. Third, on family leave, keep the leave and the payment separate, because the two differ in length and in who funds them.
Niko Nurmentaus
Product Lead
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