The salary you can expect to earn working in Germany can depend on several factors: skilled or unskilled work, your foreign language proficiency, seasonal or non-seasonal work, it even depends on the region of Germany where you will work and live.
Salary in Germany varies by region
Berlin, Munich, Hamburg, Frankfurt all look cute and interesting. They probably are, but you should first see if you can get a job there and find an affordable room or apartment to live in. The Eastern part of Germany is still starting to catch up with the Western part in terms of salary. On the other hand, the rent price is slightly lower there.
The richest regions in Germany are Bavaria with Munich as the capital and Baden-Württemberg with Stuttgart. People there earn more and are potentially prepared to pay more for the job than a foreign worker can. At the same time, be ready to pay more in rent and other services you buy. If your decision is not based on calculating money, then consider different climates and the landscape of Germany. If you’re not afraid of the cold winter and need high mountains, consider Bavaria. When mountains are not very important, you can choose between Baden-Württemberg, Saxony, Thuringia, Hesse, Rhineland-Palatinate, and others. The mildest climate is near the North Sea and the Baltic Sea. The temperature in winter usually doesn’t go much below zero but, in exchange, it will have more rain. Some people want to be as close to their home country as possible.
There are interesting statistics about the happiness level of the population of Germany
Overall, the results for different federal provinces do not differ by more than 10% compared to each other, but the least satisfied people are in the eastern part of Germany.
What salary should you expect to receive in your bank account in Germany
Let’s narrow it down to an immigrant perspective and take a closer look. We spoke with Michail, who left Lithuania a year ago to work in Germany as a machinist.
As discussed earlier, his salary was 1550 euros a month. During the first month he shared an apartment with two other men. He paid €280 rent and €100 health insurance, expenses taken from his salary each month. After the internship period he gained confidence and started to work as an electrician more often, he was qualified as an electrician in his country. Michail also had basic knowledge of German, which helped him a lot. Today, Michail manages to make 2500 – 3000 euros a month and have a comfortable life in Germany
Robin can guarantee that your salary will not be less than the minimum wage in Germany (1550 euros net). After that, it grows according to all the factors that were mentioned above.
Cost of Living in Germany
Prices in Germany are in line with average EU prices. They are lower than in Scandinavian countries, the UK, Luxembourg, Switzerland, Belgium, and the Netherlands, but more expensive than in Southern and Eastern European countries.
If you are planning to rent your apartment in a small town, then including services in the price starts at 400 euros per month. In larger cities, the price should start at 600 euros. Temporary agencies charge around €100 per week for the accommodation they provide.
Prices for services such as car mechanics, hairdressers or entertainment (cinema, bar, restaurant) are in line with the above fact: they will be more expensive than in Southern and Eastern Europe, but cheaper than in Scandinavian countries, UK, etc.
Your spending on food and clothing depends on your lifestyle. If you are used to eating out, then be prepared to pay more than in your country. When shopping at supermarkets such as Lidl or Aldi, you should not notice much difference compared to your country, except perhaps for meat products. Public transport is well developed and very reliable. You will be lucky if you are a student and can buy discounted student tickets. Otherwise, you should be creative and plan your weekend trips to use the discounts offered for the weekend ticket (Ticket Wochenende).
Have the salary paid in your bank account
Salaries are always transferred through the bank. There may be some exceptional cases when advance payments are made in cash. In most cases, having a valid CC from your home country is completely sufficient. Within the EU bank transfers are cheap and fast. Therefore, you will need to confirm with your original bank how much money your local bank would charge you for a withdrawal from an ATM in Germany. Sometimes it can even be a small percentage of the value. If you plan to use a lot of money for a longer period in Germany, then you should consider opening a bank account in Germany. To do this, you need to present your registration certificate with the local municipality and sometimes a copy of your employment contract. You might also consider digital banking services such as Revolut or Transferwise. Your bank cards are free of cost and withdrawals of a few hundred euros a month in any country are also free. Transferwise may be most comfortable for your employer too, as the account is linked to a German bank account.
Income tax in Germany
Germany is known for its complicated tax system. Often in their home country, people can handle the tax return themselves or even calculate very accurately the taxes they have to pay on a piece of paper. In Germany, this doesn’t work. There is a solidarity tax, which employees in West Germany pay to compensate for additional costs to East Germany. There is a church tax that many people have never heard of. So if you are registered not only in the German municipality but also in the German church, you are expected to pay these taxes. If you are not registered then be sure to inform your employer to avoid these taxes.
The German tax system is progressive. This means that the more you earn, the higher the tax rate applied. If your annual salary is less than 9,168 euros, then you don’t have to pay income tax. By the way, that’s exactly why it’s recommended to file a tax return on the finances if you don’t work all year. For all money earned above 9,168 euros, you will have to pay taxes and the tax rate increases with the money you earn. If your salary is around 14000 euros a year, then you must pay 14% to 24% income tax. If it is higher, but not more than 55000 euros, then the tax rate is 24% to 42%.
And this is just part of the story. Below you will find some information about different tax classes. Now you probably understand why we can’t always tell you the exact salary you will receive when you go to work in Germany. However, what we do and what you can do is try to calculate your approximate net salary with the Brutto-Netto Calculator.
Para usar a calculadora Brutto-Netto apenas insira o seu salário bruto mensal e terá uma estimativa líquida relativamente correcta.
What are the different tax classes in Germany:
Tax Class 1:
It is a default class (it is predefined) for all single employees. The standard amount of tax-free income in 2019 is 9,168 euros.
Tax Class 2:
Very similar to tax class 1, but there are some tax advantages provided for parents raising children alone. The child, in this case, must be registered in Germany.
Tax Class 3:
It is aimed at married couples, where one partner earns less. Usually the least earner should select tax class 5 and pay a higher tax rate on their lower salary and the higher earner select tax class 3 and pay less.
This rule is also valid for homosexual families. In case of death of one of the partners, then class 3 continues for the year of death plus one more. There are online calculators, which help to estimate the best option for the couple (either 3-5, 5-3 or 4-4).
Robin advises you to pay less tax! It often makes sense to provide a tax return from your partner who works in your home country and earns less money. That way you would get to class 3 and pay less tax. If you don’t do this within your first month of work in Germany, then the overpaid money will be refunded when you provide your annual tax return.
Tax Class 4:
This class is aimed at married couples, where wages are added up and divided by two. Then the average amount is taken into account when the tax rate is estimated. It is automatic for married couples and employees, when no one selects class 5. Couples can calculate at the tax office what would be most advantageous for them.
Tax Class 5:
It comes with tax class 3 and is usually selected by a spouse who earns less.
Annual tax return (Steuererklärung)
Once a year most people, who have income in Germany, must declare their taxes. It is mandatory for those who own a house or an apartment, for pensioners, for parents, for self-employed workers, etc. For workers who come to work from other EU countries and work under a normal employment contract, it is not mandatory. However it is recommended as they often do not work a full year and may receive part of their taxes back. Tax return must be submitted before May 1st for the previous year. Your employer will provide you with all the necessary numbers, which you can provide to a tax advisor in Germany or in your home country.
Money for the child (Kindergeld)
The money you can receive when you have children is relatively high in Germany and is around 200 euros a month per child. It is important that the child lives or is registered in Germany. So, if your family stays in your home country and you work in Germany, there is a high possibility that you will not receive the money for the child.
We know of a case where an electrician from Lithuania moved with his wife and 4 children to Germany. With this electrician’s salary of 2400 euros net per month and 800 euros for the children, the family had a very comfortable life.
Your budget for the first month in Germany
Accounts are very easy! Be prepared to have additional money for the whole month, as most agencies pay the salary once a month, containing 300 – 400 euros.
For a modest life you’ll need around 50 euros a week, but to play it safe we generally recommend having 100 euros a week. Especially in the beginning when you have to buy some things that would make your life more comfortable. For example, bedding, blanket, pillow, simple kitchen equipment, etc. Some agencies are prepared to make advance payments (Vorschuß), but this will only happen after 1-2 weeks, so don’t count on that. Also, if you choose to live alone, be prepared to pay rent in advance.
Frequently asked questions
How high will my salary be working in production/logistics in Germany?
The net amount of your salary per month in Germany depends on many factors. In our experience, most people earn at least €1,000 net per month after their insurance and accommodation are paid for. If this number doesn’t appeal to you you might also consider finding work in the Netherlands, where wages for similar jobs are generally 20% higher.