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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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READER QUESTIONS

Reader question: Is it ever too hot to work from home in Germany?

Germany has regulations on working during a heatwave - but does that also apply to people who work remotely? We take a look.

Reader question: Is it ever too hot to work from home in Germany?

The number of people working from home shot up during the Covid pandemic, and though employees no longer have the right to work remotely by law, many have chosen to stick with more flexible arrangements and set up a home office at least part of the week.

This is great news for people who enjoy a lie-in more than a long commute, but there are some downsides. One major issue is that it’s not always clear how Germany’s strict employee protection rules actually apply in a home setting. The rules for working during a heatwave are a good example of this.

How does Germany regulate working in extreme heat? 

By law in Germany, employers are responsible for creating a safe environment for their workers. This means that they should try and keep the temperature below 26C at all times and are legally obliged to take action if the temperature goes above 30C. 

That could include putting blinds on the windows to prevent the glare of the sun, installing air conditioning systems or purchasing fans. In some cases – such as outdoor manual labour – it could also involve starting and finishing earlier in the day. 

And in really high temperatures, employers may simply decide to call the whole thing off and give their employees a ‘hitzefrei’ day – basically a heat-induced day off – to go and cool down in a lake. However, business owners are generally given free rein to decide how hot is too hot in this instance (except in the case of vulnerable workers). 

READ ALSO: Hitzefrei: Is it ever legally too hot to go to work or school in Germany?

Do the heat rules apply to ‘home office?’

Unfortunately not. In most cases in Germany, the company isn’t directly involved in setting up the workspace for an employee that works from home, aside from possibly providing a laptop or phone for remote use. 

“The occupational health and safety regulations regarding room temperature do not apply in this case,” labour law expert Meike Brecklinghaus told German business publication T3N. “This is because the employer does not have direct access to the employee’s workplace and in this respect cannot take remedial action.”

That means that on hot days, it’s the employee’s own responsibility to make sure the environment is suitable for working in. 

woman works from home in Germany

A woman works in her living room at home. Photo: picture alliance/dpa | Daniel Naupold

One duty employers do have, however, is to instruct their workers about the best way to set up a healthy work environment at home, for example by giving guidance on how to regulate the temperature. 

“In the end, it is the employee’s responsibility to maintain his or her workplace in a condition in which he or she can perform his or her work without the threat of health impairments,” Brecklinghaus explained.

What can home office workers do in hot weather?

There are plenty of ways to keep flats cooler in the summer months, including purchasing your own fan, keeping curtains or blinds drawn and ventilating the rooms in the evening or early morning when the weather is cooler.

However, if heat is really becoming a problem, it’s a good idea to communicate this to your employer. This is especially important if you have a health condition that makes it more dangerous to work in hot weather. 

In some cases, you might be able to negotiate for the employer to pay for the purchase of a fan or mobile air conditioner as goodwill gesture. If possible, you could also arrange to travel to the office where the temperature should be better regulated.

Another option for early birds or night owls is to arrange more flexible working hours so you can avoid sweltering at your desk in the midday sun, although this of course depends on operational factors. 

READ ASO: Jobs in Germany: Should foreign workers join a union?

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