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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 taxation. 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 2020 the average gross annual salary was 47.700 euros, or 3.975 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 2021 salary report lists average salaries by industry for those working in professional or managerial occupations in Germany:

Occupation Average annual income (gross)
Doctor 89.539 euros
Finance 73.847 euros
Law 68.642 euros
Consulting 64.173 euros
Banking 62.744 euros
Engineering 62.564 euros
IT 60.563 euros
Marketing / PR  60.174 euros
Production / Manufacturing 60.046 euros
Sales 59.691 euros
HR 58.029 euros 
Construction 57.270 euros
Scientific research 56.399 euros
Logistics 50.538 euros
Design 48.574 euros
Health & social services 45.724 euros
Media 45.121 euros
Wholesale & retail 45.067 euros
Skilled crafts & trades 44.710 euros
Administration 43.788 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
Baden-Württemberg + 7,9%
Hesse + 7,2%
Hamburg + 5,5%
Bavaria + 4,4%
North Rhine-Westphalia + 1,1%
Rhineland-Palatinate - 1,4%
Bremen - 2,9%
Saarland - 4,4%
Berlin - 5,7%
Lower Saxony - 6,8%
Schleswig-Holstein - 9,8%
Thuringia - 17,0%
Saxony - 18,5%
Brandenburg - 18,8%
Saxony-Anhalt - 19,5%
Mecklenburg-Vorpommern - 22,0%

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)
Baden-Württemberg 32.675 euros 52.115 euros
Hesse 32.471 euros 51.845 euros
Bavaria 31.626 euros 49.603 euros
North Rhine-Westphalia 30.719 euros 48.257 euros
Hamburg 31.919 euros  47.246 euros
Bremen 29.413 euros 46.174 euros
Rhineland-Palatinate 29.854 euros 43.734 euros
Saarland 28.955 euros 45.638 euros
Lower Saxony 28.240 euros 44.814 euros
Berlin 28.546 euros 43.725 euros
Schleswig-Holstein 27.330 euros 42.116 euros
Thuringia 25.128 euros 38.731 euros
Saxony 24.691 euros 38.192 euros
Brandenburg 24.585 euros 38.158 euros
Saxony-Anhalt 24.379 euros 37.432 euros
Mecklenburg-Vorpommern 23.612 euros 36.288 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. Over the course of 2021 and 2022 it will rise in four steps:

Date Minimum wage (gross)
January 1 - June 30, 2021 9,50 euros per hour
July 1 - December 31, 2021 9,60 euros per hour
January 1 - June 30, 2022 9,82 euros per hour
July 1, 2022 onwards 10,45 euros per hour

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