close

Salary, payslips & minimum wage in Germany

Salary, payslips & minimum wage in Germany

Salary, payslips & minimum wage in Germany

If you are looking for a job or already working in Germany, you will undoubtedly have questions about what a fair wage in Germany is, how your salary and taxes are calculated, and how to understand your payslip.

Gross salary and net income in Germany

The difference between gross and net salary in Germany can come as a surprise to many expats, as the tax system in Germany may be different to that in your home country.

Gross salary

Your gross salary (Bruttogehalt) is your monthly or annual salary before deductions. The amount will usually be detailed in your employment contract.

Net salary

Your net salary (Nettogehalt) is the amount you will receive each month into your bank account, once all taxes, social security contributions and other costs have been deducted.

If you are discussing salary with your employer, this will always be in terms of gross salary. Make sure you take into account the fairly big difference between gross and net income during any salary negotiations.

Calculating your net German salary

Altogether, income taxes and social security contributions will take up around 35% of your gross salary. For example, if your gross monthly salary is 3.000 euros, then after deductions you can expect to take home around 1.950 euros per month. To get a better idea of your net income, you can use a salary calculator.

Bonuses and remuneration packages

Some employers in Germany also offer additional remuneration in the form of “13th-month”, summer or Christmas salaries, commission and performance-based bonuses. Benefits can also include company cars, computers or mobile phones. Note that these “benefits in kind” (geldwerter Vorteil) are also subject to income tax.

If you are recruited from abroad (e.g. by an international company), you may be offered an even more generous remuneration package: some expats are offered money to cover the cost of relocation, private health insurance, short-term accommodation or school fees for their children.

Your net salary, bonuses and benefits in kind all add up to equal your total net income.

Understanding your German payslip

Employees in Germany will usually receive a monthly payslip (Gehaltsabrechnung, Lohnabrechnung or Verdienstabrechnung) from their employer, detailing their salary, social security contributions and taxes. To anyone who is not familiar with them, these breakdowns can be difficult to understand.

Payslip top section: Personal information

The personal information section defines various parameters that are used for tax and social security contribution calculations:

  • Geburtsdatum - Date of birth
  • Arbeitnehmer Nr. - Employee number
  • St. Tg. (Steuertage) - Tax days (i.e., the relevant time period. For a full month it is usually 30)
  • StKl. (Steuerklasse) - Tax class (see our Annual income tax return page for more information on tax classes)
  • Ki.Frbtr. (Kinderfreibeträge) or ZKF (Zahl der Kinderfreibeträge) - Number of tax exemptions for children (1 per child)
  • Rel. (Religion) or Konfession - Religion (RK = Roman Catholic; EV = Protestant; -- = No religion)
  • Steuerfr. Bezug (Steuerfreibezug) or Freibetrag - Tax-free allowance
  • Eintrittsdatum - Date of hire
  • Sv. Tg. (Sozialverischerungstage) - Social security days (i.e., the relevant time period. For a full month it is usually 30)
  • SV Schlüssel (KV/RV/AV/PV) - Social security codes, indicating your level of contribution (1 = full contribution)
  • Lohnsteueridentifikationsnummer (IdNr.) or Steuer-ID - Tax ID
  • Versicherungsnummer or SV-Nummer (Sozialversicherungsnummer) - Social security ID
  • KK (Krankenkasse) - Sickness fund (i.e. the company responsible for your health insurance)

Payslip middle section: Salary breakdown & Deductions (Abrechnung)

You will also be given a detailed breakdown of your base salary, benefits, bonuses, taxes and insurance contributions. Detailed information on these various deductions can be found on our Income tax and Social security contributions pages:

  • Bezeichnung - Description
  • Gehalt - Monthly base salary
  • Geldwerter Vorteil or Sachbezug - Benefits in kind
  • E. (Einmalbezug) - Lump-sum payment (e.g. Christmas or holiday bonus)
  • Urlaubsgeld - Holiday pay
  • GB. (Gesamtbrutto) or St.Btto (Steuer-Brutto) - Total gross salary (taxable amount)
  • LSt. (Lohnsteuer) - Income tax
  • KiSt. (Kirchensteuer) - Church tax
  • Solidarität Zuschlag - Solidarity surcharge
  • SV (Sozialversicherung) - Social security
  • KV (Krankenversicherung) Beitrag - Contribution to statutory health insurance
  • PV (Pflegeversicherung) Beitrag - Contribution to long-term care insurance
  • RV (Rentenversicherung) Beitrag - Contribution to pension insurance
  • AV (Arbeitlosenverischerung) Beitrag - Contribution to unemployment insurance
  • Zusatzbeitrag - Additional contribution
  • Nettoverdienst or Auszahlung - Net salary paid

Payslip bottom section: Additional information

The bottom section of your payslip will usually provide a summary of your monthly and yearly totals, insurance contribution rates, and your employer’s contributions. You might see some of these terms:

  • Verdienstbescheinigung - Statement of earnings
  • Monatswerte or Monatssumme - Monthly values
  • Jahreswerte or Jahressumme - Annual values
  • KV/PV/RV/AV Beitrag-AG or AG-Anteil - Employer contribution to health / long-term care / pension / unemployment insurance

Average income in Germany

According to the Federal Statistical Office of Germany, in 2018 the average gross annual salary was 46.560 euros, or 3.880 euros per month. Individual salaries can vary greatly from this figure, as they are affected by factors such as age, seniority, industry, experience, working hours and geographical location. The tables below give an idea of how these factors can influence your pay.

Average salary in Germany by industry

Stepstone.de’s 2019 salary report lists average salaries by industry for those working in professional or managerial occupations in Germany:

Occupation Average annual income (gross)
Doctor 77.359 euros
Finance 72.222 euros
Banking 64.152 euros
Consulting  63.717 euros
Engineering 62.802 euros
IT 62.278 euros
Law 61.690 euros
Marketing 60.468 euros
Sales 58.020 euros
HR 57.593 euros
Scientific research 56.317 euros
PR 56.000 euros
Insurance 55.874 euros
Technical occupations 53.292 euros
Purchasing, transport & logistics 47.907 euros
Design  47.058 euros
Administration 43.919 euros
Skilled crafts & Trade 43.919 euros

Source: stepstone.de

Average salary in Germany by Federal State (Bundesland)

The salary you can expect to receive is also affected by where in Germany you live. Typically, the larger cities will offer higher salaries to compensate for a higher cost of living. Jobs in eastern Germany also usually command a lower salary. The following table demonstrates how average annual salaries in the different federal states deviate from the average salary in Germany as a whole:

Federal State Deviation
Hesse + 14,1%
Baden-Württemberg + 8,6%
Hamburg + 5,9%
Bavaria + 5,1%
North Rhine-Westphalia + 0,8%
Rhineland-Palatinate - 1,7%
Bremen - 4,2%
Saarland - 5,0%
Berlin - 5,5%
Lower Saxony - 8,2%
Schleswig-Holstein - 11,7%
Thuringia - 19,0%
Saxony - 20,1%
Brandenburg - 21,1%
Saxony-Anhalt - 21,1%
Mecklenburg-Vorpommern - 24,1%

Source: Gehalt.de

Salary indicators for recent graduates by Federal State and qualification

The amount you earn depends on the type of qualification you have. Generally, Germany as a country favours highly-qualified workers, as is demonstrated by the difference in entry-level gross annual salaries for vocational and academic qualifications:

Federal State Starting salary (vocational qualification) Starting salary (academic qualification)
Hesse 35.177 euros 52.657 euros
Baden-Württemberg 33.418 euros 50.109 euros
Hamburg 32.590 euros 48.867 euros
Bavaria 32.368 euros 48.535 euros
North Rhine-Westphalia 31.020 euros 46.513 euros
Rhineland-Palatinate 30.272 euros 45.392 euros
Bremen 29.499 euros 44.233 euros
Saarland 29.244 euros 43.850 euros
Berlin 29.081 euros 43.605 euros
Lower Saxony 28.256 euros 42.368 euros
Schleswig-Holstein 27.175 euros 40.748 euros
Thuringia 24.947 euros 37.406 euros
Saxony 24.605 euros 36.894 euros
Brandenburg 24.297 euros 36.433 euros
Saxony-Anhalt 24.282 euros 36.409 euros
Mecklenburg-Vorpommern 23.380 euros 35.057 euros

Source: Gehalt.de

Minimum wage in Germany

Minimum wage was only introduced in Germany in January 2015. It applies to all workers aged over 18 and is reviewed every two years.

Year Minimum wage (gross)
2018 8,84 euros per hour
2019 9,19 euros per hour
2020 9,35 euros per hour

Read also

  • IamExpat Jobs

    IamExpat Jobs

    Vacancies and jobs in English for expats in Germany. Find jobs by recruiters and international companies in Germany.
    read more
  • Recruitment agencies in Germany

    Recruitment agencies in Germany

    Looking for an expat job in Germany? Land your dream role by browsing our list of expat-friendly recruitment agencies in Germany.
    read more
  • Working in Germany

    Working in Germany

    Info for expats on working in Germany: recruitment agencies, salaries, payslips and minimum wage, work contracts, working hours, dismissals and time off.
    read more
  • Information on international companies in Germany

    Information on international companies in Germany

    Why do international companies choose Germany and what are they looking for in their workers? Everything expats need to know about international companies.
    read more
  • Work contracts in Germany (Arbeitsverträge)

    Work contracts in Germany (Arbeitsverträge)

    Find out about different types of work contracts in Germany: permanent, fixed-term, temporary, mini job and freelancer contracts and a contract checklist.
    read more
  • Taxation in Germany

    Taxation in Germany

    All expats need to know about taxation & the tax system in Germany, responsible tax authorities, ELSTER & asking tax advisors for help with German taxes.
    read more
  • German tax services & advisors in Germany

    German tax services & advisors in Germany

    In need of tax advice or tax services in Germany? Have a look at our list of German tax consultants, advisors and accountants for expats.
    read more
  • Career coaches in Germany

    Career coaches in Germany

    Looking for a new job in Germany? These career coaches help expats land their dream job and assist companies with their newly-arrived employees in Germany.
    read more