Germany’s capital is also the leading destination for foreign residents. The city-state has the highest proportion of non-Germans at 20.3 percent.
But Munich, capital of the southern "Free State" of Bavaria, also lures in its fair share of foreign nationals, especially those who are looking to join one of Germany's largest firms like Allianz or BMW, or otherwise step into one of the region's upcoming start-ups.
When it comes to wages, figuring out what’s considered a good salary can be difficult. Foreigners in Germany are often paid less than locals, with the biggest gaps existing between foreign women and German men.
Average salaries in Munich versus Berlin
According to data published by Germany’s statistical office (Destatis), the average monthly salary across Germany in 2023 for full-time employees was €4,479. This corresponds to an annual salary of approximately €53,748 before tax.
But salaries in Germany can differ significantly depending where you live.
Munich, for example, is known to have some of the highest salaries in Deutschland. According to Expatrio, which offers services for foreigners settling in Germany, an average annual salary in Munich in 2024 is €58,000.
READ ALSO: Which Bavaria-based companies regularly hire English speakers?
Meanwhile, Expatrio found that the average salary in Berlin is nearly 14 percent less at €50,000.
These figures being averages, you could expect an offer to be significantly lower or higher depending on your profession and experience. But high-earning professions aside, in most places in the country, if you’re earning around €50,000 or more, you’ve got a pretty good salary by German standards.
What’s left after tax?
High or not, your gross salary (Bruttolohn) is only really important to your day to day life in that it correlates to your net salary after taxes (Nettolohn), which is what you’ll have left to spend.
In Germany, you can typically expect a tax rate between 30 to 45 percent of your gross salary–including pension and health insurance contributions. Your exact tax rate depends on your salary and other factors including your age, marital status and the state you live in.
According to this simplified tax calculator for Berlin residents, if you are earning €50,000 you’ll pay 36 percent in taxes–to be left with €31,976.
That number may sound unreasonably small to someone living and working in the US, or another country that generally has higher pay and lower taxes.
But in Germany a lot of basic living costs, including rent and food are considerably cheaper. Also, that higher tax rate ensures that most of your necessary medical costs are covered, as well as unemployment pay if needed, and a pension for later in life.
Cost of living in Munich and Berlin
At the end of the day, most full-time workers in Germany find that they can live comfortably, or even support a family on a German salary. In fact, affordability is one reason that is constantly named by foreign residents as one of Germany’s main perks.
That said, where you live in Germany does make a difference.
In general, the former East German states still have the lowest cost of living. On the other hand Germany’s biggest cities–like Berlin or Munich–have the highest rents and the highest costs of living overall.
For years, Munich had a reputation as being among Germany’s most expensive cities, whereas Berlin held onto its cheap rents and its reputation for thriftiness.
But as The Local reported, the Mercer Cost of Living survey this year found Berlin to be Germany’s most expensive city, due largely to rent prices which have sky-rocketed in recent years.
READ ALSO: Which German cities are the most expensive for residents in 2024?
According to comparison portal LivingCost.org Munich is still marginally more expensive than Germany’s “poor but sexy” capital, but the gap is narrowing. The site suggests that Berlin is eight percent less expensive than Munich, and that the average after-tax salary is enough to cover living expenses for 1.7 months in Berlin compared to 1.8 months in Munich.
Which jobs pay the most or the least?
Global private markets firm Stepstone, published a 2024 salary report for Germany, which lists average salaries among a number of common professions.
According to the Stepstone report, medical doctors have the highest average annual salary in Germany at €95K, followed by head of marketing (€88K), and tax advisors and lawyers (€75K).
Also coming in well above the national average are IT project managers and IT consultants, electrical engineers, software developers and pharmacists.
On the other end of the spectrum are call centre operators and waiters (€31K), cooks (€33K) and warehouse workers (€34K).
Germany’s minimum wage (€12.41 per hour in 2024) amounts to about €26K.
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