When I first came to Germany, I had no idea how much salary I should expect. Salary in Germany is normally not a common topic that you can openly discuss with your friends and compare. Besides, it is hard to compare as every industry is different. People who have different educational backgrounds and years of experience also get a different level of salary in Germany.
During your job hunting in Germany, you may need to provide your expected salary in the job application. Here is the problem: If you put too high, you are afraid that you will scare away your potential employer and may not even get to the interview round. If you put too low, it may give the impression that you are not a valuable resource. Besides, nobody wants to be underpaid. That is why it is important to know the level of salary in Germany for your field.
Salary negotiation in Germany
My friend came to Germany and needed a job desperately. Happy enough to be employed in Germany, she was not thinking too much about the salary. As a foreigner, she had no clues anyways what should the salary in Germany be. So, she just accepted the offer from the company. Sometime later, she had discovered that she was seriously underpaid. She was so pissed and talked to the boss. In a few years of time, her salary has increased almost to a double, mainly because she was so underpaid when she got her job in Germany.
I think that this happens more often with a small company. As for bigger companies in Germany, they often have set guidelines for salary. However, it is always better to know your worth. This allows you to get the best out of the salary negotiation in Germany.
Salary in Germany: Common types of compensation
Your salary in Germany can consist of different compensation types. Let’s take a look at some common compensation types. The below components are mostly applicable for a full-time office job.
Base salary in Germany
Base salary is normally the biggest component of your compensation in Germany. It is the fixed part of your salary. You are going to get this fixed amount per month, regardless of your performance. The higher the base salary, the more secure is your income. If a company in Germany offers a salary increase each year, the percentage increase will be based on the base salary, instead of your total compensation.
Salary in Germany: Profit sharing
Profit sharing is offered by some companies when a certain level of net profit is achieved. For example, if a company in Germany achieves x percent of annual net profit margin, everyone can get x percent profit sharing based on their base salary. It means that you will have your base salary in Germany, plus this x percent on top as profit sharing. The aim is to bring commitment to the company and everyone works towards the same goal (to make as much profit as possible for the company!).
Salary in Germany: Bonus
Bonus is linked to your own performance. If the management thinks that you have a good performance, they may offer you a bonus. This is on top of your profit sharing and base salary in Germany.
Salary in Germany: Stock or option to exercise stock
Some companies offer their stock or option to employees with good performance. Normally the stock will only be vested in a few years from now. It is a similar case for the option as well. You can only exercise it after a certain period of time. Like the profit sharing, the aim is to motivate the employees to grow the companies as much as possible. The higher the stock price, the more money the employee can get out from these stock and options.
Beware of tax and health insurance deducted from your salary in Germany
You probably already heard about the high tax rate in Germany. Your gross and net salary in Germany can be very different. In most cases, the tax and health insurance amount is already deducted when you get your payslip (it can be different if you have a private insurance!). To give you an example: If you earn 50k EUR per year in Germany, you can estimate that around 60% of your gross salary amount will come to your bank account.
Yes, only 60%. The other 40% is used to pay for tax and health insurance. Note that the exact percentage depends on your tax class and salary level in Germany. You can check the “Gross to Net calculator” if you want an exact number. I still remember that I was so curious at the beginning in Germany and I asked my German friends how much they were paying for the health insurance monthly. And guess what, nobody knew the answer. That was really strange. How could someone not know how much they were paying! It was so important to know about it as they were paying this every month.
Now, when I get my payslip, I understand why. There are so many items in there and it is extremely complicated for me. It is complicated even for German people. Now imagine how a foreigner can understand every detail of it. Anyways, the most important number to understand is the net salary that I get in my bank account, and it is around 60% of my gross salary in Germany.
How much salary should you get in Germany?
Now, let’s come to the interesting part. How are you going to know how much salary you should get in Germany? Thanks to the internet, now you can get insider information also on this taboo topic. Below are some of the websites that I use:
Use Gehalt.de to estimate salary in Germany
This website provides a quick way to know how much salary you can get per job title and region in Germany. Just type in the job title and the city name that you are searching for. You will then see an estimated salary range for this job title in Germany. The nice thing is that when you are searching for a job, they also list the estimated salary range of that job. So, you will already have an idea if the salary is meeting your expectation before you consider applying.
Besides, when you search for a specific job title, they will also show you a table with an estimated salary per each state in Germany. So, you will have some ideas in which state you are better paid than the others.
Use Linkedin Salary to find out salary in Germany
Linkedin also provides some insight into salary by job title and area in Germany. It is pretty similar to Gehalt.de. You enter the job title and city, and it will show you the salary range. Linkedin also shows the salary range per job title for the top paying locations in Germany. However, it will only show salary from the top 4 areas in Germany, but not each of the German states like what Gehalt.de shows.
You don’t need to be a premium member to see this information. Linkedin has some premium features which are only provided to paid members. For example, a premium member can see who has viewed their profile; they can send messages to the recruiters directly; they can rank themselves against other applicants; their application will appear at the top of recruiters’ lists…
I am not a premium member myself, so I cannot judge if it’s worth it. In the website, it says that you will get more messages from the recruiters and thus you have a higher chance to get hired. You can always start a free trial month to test it out.
Other ways to estimate salary in Germany
Salary for a part-time job in Germany which is paid per hour
It is common especially for students to look for a part-time job. The minimum wage in Germany is around 9 EUR per hour. So you should not be paid less than that. In websites like betreut.de or ebay-kleinanzeigen, you can search for part time jobs, which are offered by private people.
Some common jobs include babysitting, cleaning, taking care of pets, or even cooking. For babysitting and cleaning, the lowest pay I have seen is around 10 EUR. 10 EUR per hour is considered very cheap and normally you should not get paid less than that. On average, it is around 13-15 EUR per hour. It can get even to 20 EUR if you are a very qualified and experienced person.
So, do negotiate your salary in Germany, and don’t let people exploit you just because you are a foreigner and do not know the market situation.
Read also: 9 ways to earn money in Germany as a student
How much salary do you need to live in Germany?
This is hard to answer. The level of salary you need in Germany depends on a lot of factors: Which city do you live? What kind of food do you eat? Do you eat out or cook at home? What kind of living standard do you want?…
I can give you some ideas below about what kind of expenses you will probably have, assuming that you are on your own and do not have kids…
The biggest part of your expense is probably your rent. Depending on your city, the rent level can be very different. It also depends if you live in a shared flat or a whole apartment. Check out the rent level in immowelt, WG-gesucht or immobilienscout24. You can also read my other post about how to find a place to live in Germany.
If you eat out in a restaurant, it may cost you around 10 EUR for lunch and 20 EUR for dinner. For sure it is different depending on the kind of food. If you just take a Kebab, it will be much cheaper.
If you cook by yourself, it may be around a few EUR per meal. Again, it depends on what you eat.
Do you drive? Or do you take public transportation? If you live in a small village, you may even be able to just bike anywhere. This can save a whole lot in your transportation cost. You can find different tips regarding transportation in my other post.
Do you like to go out with friends? Are you going to cinema from time to time? Do you like traveling? You probably want to reserve some money for your leisure activities too.
Besides, you probably need a phone plan with internet. You may need to buy some clothes. Or some beers…
Think about how much you want to spend in each area. Take into account that you will only get 60% of your gross salary in Germany. Then you will have some ideas about how much salary you should ask for. It is always better to have some buffer as well for any unexpected expenses.
Did you negotiate your salary in Germany when you got the job offer? Leave a comment below and let me know your experiences!