Germany has a very extensive social welfare system, covering medical care, unemployment and retirement payments and other forms of social benefits. All expatriates who work in Germany are required to join either the national scheme or a private health insurance scheme, although those on temporary contract with a non-German company can opt to remain in their home country's national insurance scheme.

Payments to the social security system are made direct from salaries, with employers and employees contributing equally. The payments cover contributions to the public pension scheme, the unemployment insurance scheme, and the health and nursing insurance schemes unless the employed person opts for private medical insurance. In total, the amount of the contribution is around 20% of monthly gross salaries.