How much it costs to hire an employee in each country
The real cost of a worker is always higher than their gross salary. To the payroll you must add the social security contributions paid by the company, and in some countries also the statutory minimum wage that sets the floor of each contract.
These are the approximate labour costs for hiring employees in Europe and Dubai, using an average entry salary as a reference:
Key points
- Portugal: 23.75% employer contribution + 11% employee (34.75% in total)
- France: employer charges around 42-45% of gross
- Germany: approximate employer contribution of 21%
- Italy: INPS contributions close to 30% of gross
- Andorra: CASS of 22% in total (15.5% employer + 6.5% employee)
- Dubai: no mandatory social security for expatriates; replaced by the end-of-service gratuity
Minimum wages: the floor of your payroll
The minimum wage sets the legal minimum you can pay and conditions the cost of hiring. Knowing it avoids surprises when budgeting your first hire in Europe.
Key points
- Portugal: €870/month (over 14 payments)
- France: €1,801.80/month gross (SMIC, 35-hour week)
- Germany: €12.82/hour (2025 minimum wage)
- Italy: no statutory minimum wage, set by each collective agreement (CCNL)
- Andorra: €1,447.33/month
- Dubai: no statutory minimum wage, the market sets the salary
Social security: how much the company pays
The employer contribution is the biggest hidden cost when hiring employees in Europe. While in Portugal it is around 23.75%, in France it can exceed 42%: the cost difference between countries is huge and should weigh on your decision about where to grow.
In Dubai the scheme is different: for expatriate employees there is no social security contribution, but there is an end-of-service gratuity (about 21 days of salary for each year worked during the first five years) and the obligation to pay payroll through the WPS system.
The Filnet payroll module: payroll per employee
With this module you cover payroll preparation, withholding calculation and registrations and removals with social security. This way you can hire employees in Europe without bureaucracy slowing down your expansion.
Key points
- Portugal: tailored plan
- France: tailored plan
- Germany: tailored plan
- Italy: tailored plan
- Andorra: tailored plan
- Dubai: tailored plan
How to hire without opening an office or branch
Hiring in another country does not force you to open a physical office or a branch: you can operate through your company incorporated in that country and manage payroll remotely. You only need to have the company registered with the local social security and comply with the applicable collective agreement.
Before the first hire it is worth comparing the structural alternatives. If you do not have a company yet, review the difference between a subsidiary and a branch and the opening guides for each country to decide the cheapest formula.
