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 2022 salary report lists average salaries by industry for those working in professional or managerial occupations in Germany:
| Occupation | Average annual income (gross) |
|---|---|
| Doctor | 78.317 euros |
| Engineering | 59.280 euros |
| IT | 56.992 euros |
| Consulting | 56.379 euros |
| HR | 47.840 euros |
| Finance / Insurance / Banking | 45.552 euros |
| Skilled crafts & trades | 44.800 euros |
| Sales | 42.847 euros |
| Health & social services | 37.778 euros |
| Commerce / Logistics | 37.670 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) |
|---|---|---|
| Hamburg | 34.320 euros | 44.928 euros |
| Baden-Württemberg | 33.986 euros | 47.840 euros |
| Hesse | 33.696 euros | 47.112 euros |
| Bavaria | 33.124 euros | 48.048 euros |
| Berlin | 32.448 euros | 42.640 euros |
| North Rhine-Westphalia | 32.240 euros | 45.240 euros |
| Bremen | 31.200 euros | 43.680 euros |
| Rhineland-Palatinate | 31.200 euros | 44.690 euros |
| Saarland | 31.200 euros | 43.680 euros |
| Schleswig-Holstein | 31.080 euros | 43.590 euros |
| Lower Saxony | 30.472 euros | 43.912 euros |
| Brandenburg | 28.860 euros | 41.600 euros |
| Mecklenburg-Vorpommern | 28.392 euros | 41.254 euros |
| Thuringia | 28.288 euros | 41.600 euros |
| Saxony | 28.205 euros | 41.600 euros |
| Saxony-Anhalt | 28.080 euros | 40.560 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 typically reviewed every two years. As of October 1, 2022, the minimum wage is 12 euros per hour, which equates to a monthly salary of around 2.100 euros for someone working full time.
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