Germany is the largest economy in Europe with being the world's 4th-largest economy by nominal GDP and the 5th-largest by PPP. As a global leader in several industrial, scientific and technological sectors, it is both the world's 3rd-largest exporter and importer of goods. Germany is a developed country that ranks very high on the Human Development Index and offers social security, a universal healthcare system, and tuition-free university education. This makes the citizens of Germany educated in several areas and extremely skilled while ensuring opportunities for global businesses to expand in Germany.
Further details on universities in Germany can be found on Webometrics.
The table below shows the average salaries of some jobs in Germany.
The average salary an employee draws is 3,810 EUR with the lowest average being 960 EUR and the highest average being 17,000 EUR. However, the change in salaries will depend on the location, industry, and the profession of the employee. More about average salaries in Germany can be found on Salary Explorer.
The employer payroll tax is calculated as follows:
*Income ceiling of EUR 85,200 annually
The employee payroll tax is calculated as follows:
Income Tax in Germany is calculated as follows:
The minimum wage in Germany is €1616 per month.
The employee must be paid monthly.
13th month salary
There is no provision for the 13th month salary in Germany.
Employee Stock Options
There is no provision for Employee Stock Options in Germany. However, Typical amounts of ESOP for employees are from 0.25% up to 2.5% for an employee.
The typical number of working hours in Germany is 36 to 40 hours a week.
Overtime can be allowed for upto 60 hours per week. It can be compensated by extra time off or payment as decided by the employer.
Number of public holidays is 9 days. The list of holidays can be found here.
Full time employees are entitled to a minimum of 24 days for a six day working week.
Employees are entitled to 6 weeks of sick leave paid at the rate of 100% of the regular salary.
Female employees are entitled to fully paid 6 weeks prior to child’s birth and 8 weeks after the child’s birth.
Paternity leave falls under parental leave.
In Germany, parental leave is awarded for 36 months and can be divided between the two parents.
The employer must have a justifiable reason to terminate the employment contract. A dismissal notice should be mutually agreed upon and signed by both parties.
The notice period in Germany should be at least 4 weeks.
There is no statutory severance pay in Germany.
The probation period is 6 months and is subject to mutual agreement between the employer and employee.
Germany has mandatory health and nursing care insurance. Persons who are subject to statutory health insurance are dependent employees or retirees. However, with certain restrictions, insured persons can choose from available statutory health insurance schemes.
The contribution to statutory health insurance by the employer and the employee are 7.3% and 8.2% respectively; wherein the overall contribution must be 15.5%. Contributions are calculated on the basis of the employee's compensation. When calculating contributions, the part of the employee's remuneration exceeding the applicable contribution ceiling will not be considered wherein the maximum contribution capping is €4,350 per month.
Another key factor to keep in mind is that if an employee crosses the income threshold for compulsory health insurance, the employee may take out private health insurance. In this case, up to 50% of contributions to the cost of private health and nursing care insurance will be borne by the employer with an income threshold of €57,600 gross per year.
The standard VAT rate in Germany is 19%