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Working in Germany: 7 factors that can affect how much you’re paid

Wondering if there's a way of boosting your pay packet in Germany? We recommend considering these points if you're navigating the German job market.

Published: 31 January 2022 17:26 CET
A man works at a table in Munich.
A man works at a table in Munich. Photo: picture alliance/dpa | Finn Winkler

According to a study by Gehalt.de, employees in Germany earn a median salary of around €43,200.

But all kinds of factors can have an impact on how much you earn, whether it’s the type of company you work for or where you live in Germany. 

Here’s a look at some points to keep in mind. 

1. The size of the company

The bigger the company, the better you will be paid. That’s because firms with many employees usually have a larger turnover and can afford to pay more because of their positive balance sheet.

According to an analysis by Gehalt.de, companies with more than 500 to 1,000 employees in Germany pay out an average income of €57,000 per year. A micro-enterprise or small firm with up to five employees offers an average salary of €35,000.

Meanwhile, the income of a company with more than 20,000 employees can increase by up to 85 percentage points – with an average salary of about €80,000, according to the study. 

READ ALSO: How to boost your career chances in Germany

2. The economic situation of the company

It goes without saying that the salary also reflects how well the company is doing economically.

A company that’s not doing so well, and whose turnover tends to fall from year to year, will not be able to pay its employees too large a salary and will also seldom allow salary jumps. 

3. Your education

Your school career, as well as your choice of field of study, can have significant impact on your salary, especially for younger employees. Later, work experience and performance in the respective company take on a more important role.

But as many of us who have settled in Germany know, this is a land obsessed with academic titles.

Many people strive to get ‘dr’ or ‘professor’ in front of their name, and for good reason: having academic achievements can increase your earning potential, as well as your societal clout (but just don’t plagiarise your doctoral theses like many German politicians have). 

In the working world, banks and consulting companies like their employees to have titles attached to their names, while some industries (like medicine) may require them. 

According to the job platform Stepstone, academics earn on average about 30 percent more than non-academics. Among them, graduates in medicine and law can expect the highest earnings, averaging over €72,000 a year.

The same applies to people who have studied industrial engineering, business informatics and engineering.

However, those who have not studied or earned a doctorate can also score points with years of professional experience: after 11-20 years in an industry, you can expect to be paid around 67 percent more than at entry level.

Furthermore, soft skills are indispensable for top pay these days.

These include speaking skills, organisational talent and the ability to work in a team. You can learn or grow these skills through special courses and training.

If you speak more than two foreign languages, you will also gain further advantages in the global job market (and perhaps even at home in Germany). 

4. The sector

Your choice of industry has a big impact on your salary.

According to the Federal Statistical Office, employees working in financial and insurance services as well as IT sectors earn the most. Employees there received €5,248 to €5,602 per month (gross) on average in 2020.

People working in the hospitality industry earned the least, with average gross earnings of €1,893 per month.

5. Where you live

The area you live in Germany will affect your pay packet. 

According to the Salary Atlas 2021 by Gehalt.de, employees in southern Germany earn above average.

Baden-Württemberg is at the top with a median income of about €46,600 euros, which means that employees there earn almost eight per cent above the national average.

There are also attractive salaries in Hesse (€46,300) – which is home to the banking capital of Frankfurt – and Hamburg (€45,600).

At the other end of the ranking are the eastern states: in Mecklenburg-Western Pomerania (€33,700), Saxony-Anhalt (€34,800) and Brandenburg (€35,100) in particular, annual earnings are comparatively low.

But the cost of living is higher in the larger cities so keep that in mind when you’re considering where to find a job. 

The situation is similar for the salaries of executives. The front-runner here, however, is Hesse, not least thanks to the position of Frankfurt am Main as an influential financial centre. At €100,400, Hessian decision-makers can even expect a median income in the six-figure range.

READ ALSO:

6. Your role or occupation

Regardless of the location, the choice of profession also makes a huge difference to your salary, and how your salary can develop. 

Those who want to be among the top earners in Germany should consider their profession carefully.

According to the salary atlas experts, the top positions are filled by chief physicians (€196,250) and senior physicians (€121,700).

Financial experts, lawyers, management consultants and IT experts follow in the ranking. But it can take a lot of years to get into these positions. 

A high degree of responsibility as well as sound specialist knowledge and often years of training are required. 

7. Responsibility

As well as the occupation, the position and associated responsibility in the company also play a central role when it comes to pay.

Managers earn significantly more than employees – and the larger the team you manage, the higher the pay usually is.

Useful vocabulary 

Salary – (das) Gehalt

Company size – (die) Unternehmensgröße

Small company – (das/die) Kleinstunternehmen

Influence/impact – (der) Einfluss

Average – (der) Durchschnitt

In comparison – im Vergleich

Employees – (die) Beschäftigte/Mitarbeite

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WORKING IN GERMANY

How many skilled workers will immigrate to Germany with the Opportunity Card?

As a new jobseekers' visa that is designed to attract foreign workers launches in Germany in June, one question remains: how many skilled labourers will it actually bring in?

Published: 30 May 2024 12:09 CEST
How many skilled workers will immigrate to Germany with the Opportunity Card?

From June 1st, foreign nationals from beyond the EU who want to find a job in Germany will be able to apply or a Chancenkarte (Opportunity Card) to do so.

The Opportunity Card functions as a temporary work visa, allowing card holders to enter the country and then work part-time or to take on two-week trial work for up to a year.

It comes as one of several immigration policy changes meant to attract badly needed young workers amidst Germany’s severe labour shortage. 

Policy makers hope that by allowing workers to more easily enter the country and start work, a new generation of skilled workers will take their chance to immigrate to the Bundesrepublik. But to what extent the new visa opportunity will succeed in narrowing Germany’s labour gap remains to be seen.

How many workers might apply for a Chancenkarte?

As Germany’s post-war and baby-boomer generations enter retirement, the country is experiencing a growing labour shortage that is putting significant pressure on a number of industries.

According to the draft law on the further development of skilled worker immigration, which led to the creation of the opportunity card, the government expects up to 30,000 opportunity cards to be applied for per year.

That would be a significant boost to the number of incoming skilled workers compared to figures seen in recent years. In 2022, a total of 38,820 skilled professionals with a recognised qualification entered the country, according to the latest Migration Report prepared by the Federal Office for Migration and Refugees.

So an additional 30,000 workers per year would be a laudable increase.

However, Germany’s coalition government has previously stated the goal of attracting 400,000 qualified professionals from abroad each year. This figure was based on previous German Economic Institute (IW) calculations that by 2030, Germany could face a shortage of roughly 5 million workers.

READ ALSO: Q&A – How foreign jobseekers in Germany can maximise their chances in 2024

Considering that goal, the 30,000 workers that could be attracted by the opportunity card would amount to just 7.5 percent of Germany’s target.

But given the severity of the labour shortage in key industries, anything is better than nothing.

rail track construction

Railroad construction, called “Berufe im Gleisbau” in German, is a bottleneck occupation. More track construction workers are badly needed to keep the country’s railway infrastructure in-tact in the future. Photo: picture alliance/dpa | Jan Woitas

What are the ‘bottleneck’ occupations?

Principally, the opportunity card is designed to ease immigration requirements for all kinds of skilled workers.

But workers from so-called bottleneck occupations are granted an extra point according to the point-based system that will be used to review applications.

Put simply, bottleneck occupations are those in which there are not enough incoming workers to replace the retiring workforce. 

Germany’s employment agency assesses bottleneck occupations in the country. Last year the agency announced that the number of bottleneck occupations had risen sharply, from 148 to 200 in 2022 – amounting to a shortage in one out of every six occupations in Germany.

A spokesperson for the employment agency, told The Local that: “Nursing specialists, occupations in sanitary, heating and air conditioning technology, surgical assistants, construction electricians, and rail construction workers”, are a few examples of key bottleneck occupations currently.

READ ALSO: Hit by worker shortage, German city gets students to drive trams

For more information on the Chancenkarte and who is qualified to apply read our explainer.

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