The First Hire Should Not Require a Second Job

RC/TM/2026/T.26 · Letter from the table · 4 June 2026

To the Team Council,

I read Lukas’s letter from Dresden about the moment a first hire stops feeling possible. I recognised the hesitation he described. For me, the difficult part was not deciding whether I needed help. It was trying to understand, before making a commitment, what the commitment would involve.

In October 2025, I began planning to hire one person for 20 hours a week. I could offer €14 an hour. That meant gross pay of about €1,213 a month on an annualised average. It was not a large payroll, but it was a real monthly promise. I wanted to be sure I could keep it before I asked someone to rely on it.

I made a list of the steps. I needed to obtain a Betriebsnummer from the Federal Employment Agency, arrange payroll, register the employee for social insurance, handle wage-tax information through the electronic tax system, and find out which accident-insurance institution applied. I also had to understand the employment contract and keep track of working hours and leave. None of those steps is unreasonable on its own. Together, they were difficult to price and sequence as a first-time employer.

I asked a tax adviser what it would take to set up payroll correctly. The initial consultation cost me €240. The payroll service I was offered would cost €89 a month. I spent evenings reading official guidance and making calls so I could ask better questions. I kept a notebook of what I still did not know: which registration came first, what information I needed from the employee, which payments would vary, and what I would owe even in a month when income arrived late.

I did not want to cut corners. I wanted to offer a lawful job, pay on time, and know what the job would cost me. But the figures I could see most clearly were the wage and the service fee. The rest appeared as separate obligations, with different forms, institutions, and schedules. I could not make one simple forecast and feel confident that it covered the whole first month.

I went ahead. The employee began in November. I am glad I hired them, and I am not writing to suggest that a small employer should be exempt from fair wages, social insurance, or safety protections. Those protections matter to the person doing the work. But starting a job should not require a new employer to become an expert in several administrative systems before they can know whether the job is affordable.

That is why I support TM-001, the Fair Hiring Cost Standard. Its proposal—to make employment costs lower and simpler for a business’s first ten hires, phase social contributions, provide one-stop payroll registration, and make rules predictable—addresses the barrier I encountered. A phased approach should be designed carefully, with the worker’s protections intact and with a clear path to ordinary contributions as the employer grows. The aim should be to make the first formal job manageable, not to make it less secure.

A one-stop registration process would have helped me most at the beginning. I needed to know what to do, in what order, and what information to prepare. A single route that connected the necessary registrations, explained the recurring payments, and gave me a dependable estimate would have saved time and reduced the risk of missing a step. Predictable rules would also let me compare a proposed hire’s total cost with my expected income before I made a promise.

Lukas’s experience from Dresden is a useful reminder that this is not only a question of percentages. Uncertainty has a cost of its own. When a founder cannot confidently calculate the obligation, the safest choice may feel like postponing the hire—even when there is work to do and someone ready to do it.

The OECD reports a 49.3% tax wedge for Germany in 2025. That figure describes the tax wedge for the OECD’s model worker, not the exact additional cost of my particular hire; I mention it only as a reminder that labour costs are shaped by a wider system than the wage shown in a job offer.¹

My First Ten Hires diary is simple: write down every step, every amount, every delay, and every question that a first-time employer cannot answer from one clear source. I hope the Council will use those diaries to build a standard that makes the first hire easier to plan, easier to register, and easier to sustain.

Notes and sources

1. OECD, Taxing Wages 2026, Germany country note: 2025 tax wedge. ↩

Sources

1. OECD, Taxing Wages 2026: Germany country note