As one of the largest economies in the world, job prospects in Germany are positive and people can earn a respectable wage.
However, there are significant differences in how much people in Germany are paid. The state where an employee lives, the profession or job as well as gender continue to have a major influence on the distribution of income.
Recent studies help explain how much employees typically earn.
How much do workers earn on average?
A German full-time employee earned an average gross salary of €4,323 per month in April 2023, according to recent data released by the Federal Statistical Office. That means the gross annual salary on average in Germany was around €51,876 last year.
It's worth noting that taxes and social security contributions Germany are fairly high so the take-home pay of employees is significantly lower than gross income.
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Meanwhile, the data from the statistical office is based on the average gross salary, also referred to as the arithmetic mean. But some experts say that the significance of these statistics could be improved by using the median, also known as the central value. The median is the value that is exactly in the middle of all individual data when sorting the data in ascending order.
Which jobs offer the best pay?
Not surprisingly, there are big differences in how much you take home depending on the kind of job you work in.
At the top of the ranking, full-time employees in the financial and insurance services sector earned an average gross salary of €5,841 per month last year. IT and communication workers received €5,769 per month, while those working in freelance, scientific and technical services earned on average €5,436.
The average gross monthly salary in the public sector was €4,324.
At the lower end of the scale, average salaries in the agricultural and forestry sector (including fishing) stood at €2,798 per month last year, while employees in the catering sector earned €2,860 gross income per month.
Where you live makes a difference
The place of residence or work in Germany also plays an important role in the amount of pay you get.
Even after more than 30 years of reunification, the difference in earnings between west and east Germany is still clearly visible.
According to recruitment portal StepStone's 2023 report, median salaries in Hamburg and Baden-Württemberg are around 10 percent above the average. Overall the research found that the east-west gap (not including Berlin) was 15 percent. An average median salary was €38,700 in eastern Germany and €45,500 in western Germany.
Hamburg has the highest average median salary at €48,100. Baden-Württemberg is second with €48,000, followed by Hesse at €47,800. Thuringia (€36,600), Mecklenburg-Western Pomerania (€36,200), and Saxony-Anhalt (€36,100) are at the other end of the scale.
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Large gender pay gap
Gender can also have a big influence on salary levels in Germany, with women on average receiving less pay than their male colleagues for the same work.
According to the Federal Statistical Office, the average gross hourly wage in April 2023 for full-time men was €27.02 per hour, while full-time women earned €23.59. This corresponds to a salary difference of 12.7 percent.
The StepStone salary report also comes to the conclusion that women earn 12.4 percent less than men. According to the online job portal's calculations, a woman earns an average of €5,750 less per year.
This difference in earnings is referred to as the "gender pay gap". This percentage has hardly changed since 2002. The German government has set itself the goal of reducing the gender pay gap to 10 percent by 2030.
READ ALSO: Why is the gender pay gap so big in German-speaking countries?
How does net disposable income in Germany compare to other countries?
The GfK Purchasing Power Study, which determines the net disposable income of Europeans (that's after tax and deductions), shows how German employees compare with other European countries.
GfK put the average net income in Europe at €17,688 per capita for 2023 as a whole.
Liechtenstein leads Europe with an average disposable net income of €68,843 per capita. Switzerland is in second place with a net disposable income of €49,592 per capita, while Luxembourg follows with an average net income of €40,931.
Germany was further down the ranking with a net disposable income of €26,271 per capita.
Of the 42 countries analysed, only 16 were above the European average net income. For instance in Spain, disposal net incomes averaged €16,449.
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