Salary (minimum wage) and taxes
The salary (also known as wage, pay) is a part of the work contract. Within the job advertisement you may find exact information about the wage. Ever so often a collective agreement is concluded. Depending of the kind of profession there is an a hourly payment that was agreed upon or a monthly wage. Employees who work in external service generally get a commission (additional payment).
Parts of the work contract and collective agreement usually are arrangements concerning vacation- or Christmas bonuses. Additional income components can be the provision of a company car, a mobile or a laptop, that may be used on a private basis. Further agreements can contain a company pension or special rates for insurances like health- or life insurance.
A permit issued by the Federal Employment Agency is not needed if the internship does not exceed the duration of twelve weeks.
Since the 1st of January 2015, a minimum statutory wage of €9,35 gross per hour has to be paid nationwide to every employee and every trainee, according to the German Minimum Wage Act.
The minimum wage is mandatory for all employees over the age of 18 in all sectors.
The following groups are exempt from the minimum wage:
- compulsory trainees
- employees under 18 without a vocational qualification
- long-term unemployed people
- voluntary employees
- freelancers and self employed.
- trainees with a voluntary internship not lasting more than 3 months.
There is a separate minimum wage for apprentices since the 1st of January 2020. For more information about this topic, click here
In Germany, the income is subject to taxes. As an employee you usually get the monthly net amount transferred to your bank account. The gross salary is being deducted by:
- pension insurance
- health insurance
- unemployment insurance
- nursing insurance
- income tax
- solidarity surcharge
- perhaps church tax
The more income is achieved, the higher the percentage is from the duties.
If you are self employed, you have to tax your income at the financial authorities by yourself.
There are 6 different tax classes in Germany, that regulate the amount of income tax. Which tax class is the relevant one for you, can be determined with a tax class calculator.
Additional information about fiscal law, also available in English, can be found on the website from the Federal Ministry of Finance. www.bundesfinanzministerium.de