The DuMont group of newspapers reported that Merkel currently earns €15,833 a month, not including her MP's salary. But based on figures worked out by the German Taxpayers Association (BdSt), that figure will rise by €334 from August onward.
Though it is the first government pay rise in eight years, BdSt chief Karl Heinz Däke was sharply critical of the hike.
Ministers currently earning €12,860 will get a rise of €272, taking them to €13,132 per month.
The parliamentary leader for the Greens, Volker Beck, called the rise “profoundly insensitive.”
BdSt chief Däke said: “In this serious budget situation, it is out of the question that the government should allow itself a pay rise.”
The pay rise comes as Germany faces an annual government deficit of about €80 billion a year. It also follows news that reduced tax receipts mean the country is also facing a budget black hole of €40 billion over the next three years.
An Interior Ministry spokesman defended the rise, saying that as a result of the pay freeze, cabinet members' salaries had not kept pace with those of other officials.