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Basic Economic Summary

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.


  • Local Languages: Germany, English
  • Capital: Berlin
  • Major Economic Hubs: Berlin, Hamburg, Munich, Frankfurt am Main
  • Currency: Euro
  • Population: 84,155,849
  • Time Zone: UTC+1, UTC+2 (CEST)
  • Date Format: dd/mm/yyyy

Useful Information

  • GDP Per Capita (in USD): 51,860
  • Exchange Rate (EUR/USD): 1.12

Local Universities

Top Local Universities

University Rankings
Technische Universität München Ranking in Germany: 1

World ranking: 82

Ruprecht Karls Universität Heidelberg Ranking in Germany: 2

World ranking: 99

Karlsruhe Institute of Technology (Universität Karlsruhe) Ranking in Germany: 3

World ranking: 154

Ludwig Maximilians Universität München Ranking in Germany: 4

World ranking: 163

Universität Hamburg Ranking in Germany: 5

World ranking: 168

Further details on universities in Germany can be found on Webometrics.

Salary Data

Average Salary of Jobs (Per Month)

The table below shows the average salaries of some jobs in Germany.

Job Title Average Salary (EUR)
Accounting Manager 5,670
Office manager 3,050
Pilot 6,510
Business Analyst 4,390
Project Manager 4,630
Human Resources Manager 5,400

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.

Talent Sourcing Tips


Employer Payroll Tax

The employer payroll tax is calculated as follows:

Category Rate
Pension Insurance 9.30%
Unemployment Insurance 1.20%
Health Insurance 7.30%
Long term care insurance 1.525%
Insolvency Contribution* 0.12%
Work Accident Scheme 0.60%
Maternity Leave 0.55%

*Income ceiling of EUR 85,200 annually

Employee Payroll Tax

The employee payroll tax is calculated as follows:

Category Rate
Pension 9.30%
Unemployment Insurance 1.20%
Health Insurance 7.30%
Long term care insurance 1.525%

Employee Income Tax

Income Tax in Germany is calculated as follows:

Taxable income range for single taxpayers (EUR) Taxable income range for married taxpayers (EUR) Tax rate (%)
Over Not over Over Not over
0 9,744 0 19,488 0
9,744 57,918 19,488 115,836 14-42
57,918 274,612 115,836 549,224 42
274,612 and above 549,224 and above 45

Minimum Wage & Payroll

Minimum Wage

The minimum wage in Germany is €1616 per month.

Payroll Cycle

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.

Working Hours & Statutory Leave

Working hours

The typical number of working hours in Germany is 36 to 40 hours a week. 

Overtime pay

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.

Public Holidays

Number of public holidays is 9 days. The list of holidays can be found here.


Annual Paid Leave

Full time employees are entitled to a minimum of 24 days for a six day working week.

Sick Leave

Employees are entitled to 6 weeks of sick leave paid at the rate of 100% of the regular salary.

Parental Leave

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.

Offboarding & Termination

Termination Process

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.

Notice Period

The notice period in Germany should be at least 4 weeks.

Severance Pay

There is no statutory severance pay in Germany.

Probation period

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%

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