German government approves largest minimum wage increase in its history

The German government has approved the largest minimum wage increase in the country’s history. Wages will increase in two stages over 2026 and 2027.

German government announces minimum wage increases

Germany’s CDU/CSU-SPD government has approved a two-stage minimum wage increase. In the first stage, on January 1, 2026, the national minimum wage will increase from 12,82 euros per hour to 13,90 euros per hour.

In the second stage, on January 1, 2027, the national minimum wage will increase again from 13,90 euros to 14,60 euros per hour. The increase was initially suggested by the Minimum Wage Commission in June and is the biggest in the history of minimum wages in Germany, which were only introduced in 2015.

Around six million people are employed in minimum-wage jobs in Germany. "Millions of employees will receive noticeably more for their work, and companies can responsibly spread the rising costs over two years," Labour Minister Bärbel Bas (SPD) said as the new wage was approved.

Despite the historic increase, the amount falls short of plans made in the CDU/CSU-SPD coalition agreement, which promised a 15-euro minimum wage.

How is the minimum wage amount decided in Germany?

Since Germany introduced the statutory minimum wage, the amount has increased annually. The amount of the increase is decided by the Minimum Wage Commission (Mindestlohnkomission).

The Mindestlohnkomission is made up of six members: two employers, two employees and two academic advisors who are recommended by employer and employee organisations and appointed by the federal government. The six members have voting rights and the commission is led by a chairperson. New representatives are appointed to these roles every five years.

Every year, the commission sets a minimum wage based on the development of collective bargaining agreements between German trade unions and employers. The commission is also tasked with assessing whether the minimum wage “provides adequate minimum protection for employees, allows for fair competition and does not lead to job losses”.

Once the commission has settled on a figure, the German government can introduce the new minimum wage. The new minimum wage must be the same as the amount suggested by the commission, as the government cannot independently decide on a national minimum wage amount.