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Working in Germany: 7 factors that can affect how much you’re paid

Wondering if there's a way of boosting your pay packet in Germany? We recommend considering these points if you're navigating the German job market.

A man works at a table in Munich.
A man works at a table in Munich. Photo: picture alliance/dpa | Finn Winkler

According to a study by Gehalt.de, employees in Germany earn a median salary of around €43,200.

But all kinds of factors can have an impact on how much you earn, whether it’s the type of company you work for or where you live in Germany. 

Here’s a look at some points to keep in mind. 

1. The size of the company

The bigger the company, the better you will be paid. That’s because firms with many employees usually have a larger turnover and can afford to pay more because of their positive balance sheet.

According to an analysis by Gehalt.de, companies with more than 500 to 1,000 employees in Germany pay out an average income of €57,000 per year. A micro-enterprise or small firm with up to five employees offers an average salary of €35,000.

Meanwhile, the income of a company with more than 20,000 employees can increase by up to 85 percentage points – with an average salary of about €80,000, according to the study. 

READ ALSO: How to boost your career chances in Germany

2. The economic situation of the company

It goes without saying that the salary also reflects how well the company is doing economically.

A company that’s not doing so well, and whose turnover tends to fall from year to year, will not be able to pay its employees too large a salary and will also seldom allow salary jumps. 

3. Your education

Your school career, as well as your choice of field of study, can have significant impact on your salary, especially for younger employees. Later, work experience and performance in the respective company take on a more important role.

But as many of us who have settled in Germany know, this is a land obsessed with academic titles.

Many people strive to get ‘dr’ or ‘professor’ in front of their name, and for good reason: having academic achievements can increase your earning potential, as well as your societal clout (but just don’t plagiarise your doctoral theses like many German politicians have). 

In the working world, banks and consulting companies like their employees to have titles attached to their names, while some industries (like medicine) may require them. 

According to the job platform Stepstone, academics earn on average about 30 percent more than non-academics. Among them, graduates in medicine and law can expect the highest earnings, averaging over €72,000 a year.

The same applies to people who have studied industrial engineering, business informatics and engineering.

However, those who have not studied or earned a doctorate can also score points with years of professional experience: after 11-20 years in an industry, you can expect to be paid around 67 percent more than at entry level.

Furthermore, soft skills are indispensable for top pay these days.

These include speaking skills, organisational talent and the ability to work in a team. You can learn or grow these skills through special courses and training.

If you speak more than two foreign languages, you will also gain further advantages in the global job market (and perhaps even at home in Germany). 

4. The sector

Your choice of industry has a big impact on your salary.

According to the Federal Statistical Office, employees working in financial and insurance services as well as IT sectors earn the most. Employees there received €5,248 to €5,602 per month (gross) on average in 2020.

People working in the hospitality industry earned the least, with average gross earnings of €1,893 per month.

5. Where you live

The area you live in Germany will affect your pay packet. 

According to the Salary Atlas 2021 by Gehalt.de, employees in southern Germany earn above average.

Baden-Württemberg is at the top with a median income of about €46,600 euros, which means that employees there earn almost eight per cent above the national average.

There are also attractive salaries in Hesse (€46,300) – which is home to the banking capital of Frankfurt – and Hamburg (€45,600).

At the other end of the ranking are the eastern states: in Mecklenburg-Western Pomerania (€33,700), Saxony-Anhalt (€34,800) and Brandenburg (€35,100) in particular, annual earnings are comparatively low.

But the cost of living is higher in the larger cities so keep that in mind when you’re considering where to find a job. 

The situation is similar for the salaries of executives. The front-runner here, however, is Hesse, not least thanks to the position of Frankfurt am Main as an influential financial centre. At €100,400, Hessian decision-makers can even expect a median income in the six-figure range.

READ ALSO:

6. Your role or occupation

Regardless of the location, the choice of profession also makes a huge difference to your salary, and how your salary can develop. 

Those who want to be among the top earners in Germany should consider their profession carefully.

According to the salary atlas experts, the top positions are filled by chief physicians (€196,250) and senior physicians (€121,700).

Financial experts, lawyers, management consultants and IT experts follow in the ranking. But it can take a lot of years to get into these positions. 

A high degree of responsibility as well as sound specialist knowledge and often years of training are required. 

7. Responsibility

As well as the occupation, the position and associated responsibility in the company also play a central role when it comes to pay.

Managers earn significantly more than employees – and the larger the team you manage, the higher the pay usually is.

Useful vocabulary 

Salary – (das) Gehalt

Company size – (die) Unternehmensgröße

Small company – (das/die) Kleinstunternehmen

Influence/impact – (der) Einfluss

Average – (der) Durchschnitt

In comparison – im Vergleich

Employees – (die) Beschäftigte/Mitarbeite

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WORKING IN GERMANY

‘Lack of diversity is a problem’: What it’s like to work at a Berlin tech startup

Many foreigners dream of finding a job in Germany's growing startup scene. But aside from promises of free pizza, what's the culture like, is the pay good - and do you need to speak German? We spoke to two foreigners working at tech startups in Berlin to find out.

'Lack of diversity is a problem': What it's like to work at a Berlin tech startup

With over €5.1 billion in venture capital fund investments raised last year, the startup industry in Germany’s capital is booming. Startups are the fastest-growing job sector in Berlin, and more than 78,000 people are now employed in the sector.

The sector attracts highly qualified, ambitious people from all over the globe. But what is it really like to work for a Berlin startup?

We spoke to two insiders to find out. Gabriela, 36, is originally from Poland and has been a Business-to-Business Manager in a tech startup in Berlin since October last year. Giuseppe, also 36, is originally from Italy and has been working as a Human Resources Manager in various tech startups for the last seven years. 

Most important question first – do you actually get free pizza and office table tennis?

Giuseppe: These kinds of benefits have become a bit of a cliche that doesn’t really reflect the reality anymore. Yoga, soft drinks, and fruit baskets are nothing special. The real benefits are now to do with remote working and flexible working schedules. 

Gabriela: We haven’t really had many of these kinds of ‘incentives’ because we’ve been mainly working from home since I started. Only in the last month or so we’ve been going to the office at least once a week, and we do get free pizza and drinks once a month when the CEO’s give us their monthly update on how the business is going.

READ ALSO: The German regions attracting startups

Would you say that your work environment is diverse?

Gabriela: My team is a complete mix of people from different European countries. But the number of BAME (Black, Asian and minority ethnic) people on board is not very high and there is definitely a problem with the lack of female leadership, which the company is trying to address. The CEOs are all white Germans.

Giuseppe: (Lack of) diversity is still a big problem. Most of the CEOs and the highest earners are white – usually German – guys. Women and BAME people tend to occupy lower-paid jobs. It’s a systemic issue – and there is competition among a lot of startups that are trying to show who is more diverse. 

How much German is spoken in your company?

Gabriela: Hardly any. We speak all the time in English with each other and all of our meetings are in English.

Giuseppe: It’s the same with us. I’m hearing German less and less. 

READ ALSO: How easy is it to get an English-speaking job in Germany?

Is there anything then that indicates that the company you’re working for is German?

Gabriela: I think the presence of a strong labour law reminds you that you’re in Germany. In our company, there’s an employees representation group and certain clear rules. You know that you won’t be suddenly dismissed once you’ve passed your probation time.

Giuseppe: Yes, the labour law is what I would point to. It’s not easy to get rid of employees in Germany – there is a more robust framework that affects the environment and culture. 

What is the salary like?

Gabriela: I think it’s competitive. My company does salary benchmarking every summer to see what the standard is across the industry and adjusts its pay accordingly.

Giuseppe: Salaries have gone up a lot in the last few years and you could even say they are booming now. A ‘normal’ engineer can expect to earn at least €85,000 per year, and if you are in a serious leadership position, you can expect to earn up to €180,000.

READ ALSO: Do internationals face discrimination in the workplace

A woman working from home throws money in the air. Photo: picture alliance/dpa/dpa-tmn | Christin Klose

Would you say that it’s a high-pressure environment to work in?

Gabriela: For me, there isn’t the kind of pressure that if you don’t perform you won’t get the money you should be getting. Instead, my company is trying to get you to think that your own success is intertwined with the success of the company. There are good incentives to work hard and we have also a certain amount of shares in the company, so if it does well we benefit too.

Giuseppe: I personally feel pressure, but I love what I do, so for me it’s fine. But I have seen a lot of cases of people burning out – especially young people. I think because there are a lot of young managers, who get into leadership roles without having the tools or strength to resist the pressure.

How do you find the work-life balance? 

Giuseppe: I feel like I’m working all the time, but again, that’s because I love my job and I want to, it’s not necessarily the expectation, it’s not like in the US. In Berlin tech startups, there is a tendency to slow down around 6pm.

Gabriela: For me, the work-life balance compared to previous jobs is very good. Telecommuting is great, there are flexible starting times and last-minute holiday requests are usually approved. I think it’s very good for people with children and more complex schedules. 

How many days holiday do you get?

Gabriela: We get 28 days holiday per year.

Giuseppe: We get between 23 and 30 days holiday per year, depending on how long you’ve been working in the company.

What are the career progression opportunities like?

Gabriela: Very dynamic. For myself, I don’t see a clear career path at the moment, but I see a lot of movement happening and people moving to different roles. There is a feeling of being in a constant state of change. 

Giuseppe: If you join a startup at the right time, you can very easily become a manager very quickly.

READ ALSO: EXPLAINED: How to boost your career chances in Germany

What was different about working for a Berlin start-up than you expected?

Gabriela: I thought that working from home would be easier, because I hadn’t done that much before, but I find it much harder to be engaged than I expected. I think a lot of startups (in Berlin) are struggling now to find the right balance between the competing interests of their employees – some of whom want to be fully remote and others who want to come more regularly to the office.

Giuseppe: Before I started working for tech startups I had this romantic image that they were all led by geniuses with big ideas who started in their garages. But in reality, I’ve found this emotional, big-dreaming side to be lacking. There are a lot of people who work for startups who just see it like any other job.

A work team exchanging ideas with notes on a whiteboard.

A work team exchanging ideas with notes on a whiteboard. Photo: picture alliance/dpa/dpa-tmn | Christin Klose

What are the best things about working for a Berlin tech start-up?

Giuseppe: You can make an impact with what you do, to build a product and say it’s mine. There is also creativity and freshness in the team dynamics. I was deeply unhappy in the years I spent working for big corporations because I didn’t know what the goal was. In startups, the objectives are clear.

Gabriela: You can grow with the company, and there are a lot of positions opening all the time, and it’s very common for startups to promote internal talent.

READ ALSO: EXPLAINED: The German regions attracting startups

What are the worst things about working for a Berlin tech start-up?

Gabriela: Sometimes it can be hard to keep up with the pace of change. It sometimes feels like we are constantly onboarding new people or people are changing roles and there is a slightly chaotic feel to things. The buzzword “agility” is used and abused, and sometimes means staff is expected to go along with anything and everything.

Giuseppe: In the tech start-up world here there seem to be a lot of people who get into the top jobs because they speak a lot, not necessarily because they are the most competent. There is a lot of networking and self-promotion required to push yourself forward. It’s also not a good environment for people who don’t like change, because things change a lot. 

Do you think Berlin is a good place for foreigners to work?

Gabriela: Yes, definitely. You have a lot of choice when it comes to places to work – so it’s unlikely you’ll have to stick at a job which
you don’t like. It’s also a big help for foreigners that most startups in Berlin don’t require German language skills.

Giuseppe: Definitely. For me, the mix of cultures and ideas in the workplace is really inspiring and motivating. And, of course, the city of Berlin itself is full of cultural events and has a great night life – so it’s a great place to live for when you want to detach from work too.

Do you have any advice for anyone thinking about joining a tech start-up in Berlin?

Giuseppe: Try to develop an entrepreneurial mindset instead of an employee mindset as soon as possible. Always look for opportunities, don’t take things personally, don’t think about what happened yesterday, and focus on the now. 

Gabriela: Be open-minded and be prepared for change. 

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