How pay works in a German job

1. Brutto and Netto

Every German salary figure you see in a job advert, a contract or a negotiation is gross. The amount reaching your account is materially lower, and for a middle earner the difference is often around 35 to 45 % of gross.

That is not a hidden tax so much as a bundled one: the deductions include health insurance, long-term care insurance, pension and unemployment insurance, which in many countries are paid separately or not at all. Your employer pays roughly the same again on top of your gross salary for the same items.

2. Reading your payslip

A German Lohnabrechnung is dense and uses abbreviations rather than words. It is worth learning once, because errors do occur and they are much easier to correct in the month they happen.

3. The minimum wage

There is a statutory minimum wage applying to almost all employees. Some sectors have higher collectively agreed minimums, and a contract can never go below the statutory figure: a clause purporting to waive it is void.

The minimum also drives other thresholds, notably the Minijob earnings limit, which moves with it.

The current floor remains €13.9 gross per hour through 31 December 2026 and is confirmed to rise to €14.6 on 1 January 2027. Covered employees normally do not apply: employers must update pay automatically. Minijob workers, seasonal workers and foreign employees working in Germany are generally included, subject to the statutory exceptions.

4. Collective pay scales, and what is actually negotiable

Whether a collective agreement applies changes the nature of a pay negotiation completely, and candidates from outside Germany often do not realise which situation they are in.

Where a Tarifvertrag applies, pay is usually set by grade and years of experience. There is little room to negotiate the number itself, and the useful negotiation is about which grade you are placed in and how prior experience is credited. Public sector roles under TVöD or TV-L work exactly this way.

Where no agreement applies, pay is individually negotiated as elsewhere. Even then, German salary negotiation tends to be less aggressive than in the US, and an extreme opening figure is more likely to end the conversation than to anchor it.

• Under a collective agreement: negotiate the grade and the experience credited, not the raw figure
• Outside one: negotiate the figure, and ask about the annual review cycle
• A thirteenth month payment or holiday bonus is common but comes from the contract or agreement, not statute
• Company pension contributions (betriebliche Altersvorsorge) are worth real money and are frequently overlooked
• Ask about the Deutschlandticket subsidy, meal allowances and training budgets, which many employers grant readily

5. When you are paid, and what to check

Monthly payment is standard, usually at the end of the month or in the first days of the following one, into a German bank account. Your contract states the date, and payment is due on it: persistent lateness is a breach you can act on.

You are entitled to a written payslip for each period. Keep them: they are the evidence for tax returns, loan applications, residence permit renewals and any wage dispute.

• Monthly payment, on the date your contract states
• A written payslip for every pay period, which you should keep
• Deductions remitted by your employer, not by you
• A Lohnsteuerbescheinigung at year end, summarising the year for your tax return
• Wage claims can be subject to short contractual deadlines, so raise problems promptly