Last updated on  August 4, 2024

Germany is the Europe’s biggest economy and one of the richest countries in Europe. It is wealthy not only in GDP per capita terms but also in terms of average personal income. The country is famous for its affluent middle class, generous welfare system, free healthcare and education, clean environment, public safety and generally fair and even distribution of wealth. Therefore, Germany is also highly regarded for its great quality of life.

Average Gross Salary in Germany

An average gross salary for full time employees in Germany in 2023 was 4,187 euros a month incl. bonuses according to the StepStone Gehaltsreport 2024. Self-employed, part-time jobbers and people with very low income below the taxable level were not included in these statistics. That translates into 50,250 euros a year gross (before income tax and social security contributions).

When discussing salaries, make sure you understand the difference between arithmetic average and median. In this report, medians rather than arithmetic averages are used. In fact, the median values are less affected by extraordinarily high values and, therefore, provide a better representation of the income of the average person within a certain category. So, the median gross salary in Germany in 2023 was 43,750 euros as opposed to the above mentioned average of 50,250 euros.

The minimum wage in Germany is currently 2,150 euros a month when working 40 hours a week (i.e., 12.41 euros an hour in effect throughout 2024) which is ca 25,800 euros a year. An increase to 12.82 euros an hour (2,220 euros a month or 26,400 euros a year) is planned for January 1st, 2025.

Major differences in income levels still exist between the East and the West. The median salary in the old federal states (45,000 euros a year) is nearly 21% above the median in the new states (37,250 euros a year). That is, employees in the West earn on average ca 3,750 euros a month while those in the former East Germany make around 3,100 euros a month (excluding the city state Berlin because Berlin is not considered one of the new federal states), a difference of 650 euros a month. Employees in the southern federal states – Hessen (capital Wiesbaden), Baden-Württemberg (Stuttgart) and Bayern (Munich) – have the highest median wages (the city state Hamburg was excluded from these comparisons) whereas those in the new states – Sachsen-Anhalt (capital Magdeburg), Mecklenburg-Vorpommern (Schwerin) and Thüringen (Erfurt) – have the lowest salaries. In fact, employees in the federal state Hessen earn on average 30% more than their counterparts in Sachsen-Anhalt and Mecklenburg-Vorpommern.

Furthermore, there are also differences in income levels between the regional capitals (and large cities in general) and rural areas, though these are less significant than differences between the old and new federal states. The biggest difference is in Bayern (the federal state of Bavaria) where the median salary in the capital Munich is 56,250 euros a year against the state’s median of 46,000 euros, that is, 22% above the state’s level. In fact, Munich was in 2023 the city with the highest salaries in the whole of Germany. And last but not least regarding the differences in salaries, German men earn on average 14% more than women.

Average Salaries in Germany in 2024 by Profession

Who earns how much	Euros a year
Medical doctor	95K
Head of marketing	88K
Tax adviser	76K
Lawyer	75K
IT project manager	73K
IT consultant	65K
Electrical engineer	63K
Software developer	60K
Pharmacist	60K
Mechanical engineer	59K
Natural scientist	58K
HR manager	54K
Sales manager	54K
Teacher	52K
Architect	51K
Marketing manager	49K
Accountant	47K
Social worker	45K
Nurse	45K
Electrician	44K
Caregiver	43K
Social media manager	43K
Plumber	39K
Physiotherapist	37K
Truck driver	36K
Warehouse worker	34K
Cook	33K
Shop assistant	32K
Waiter (tips not included)	31K
Call center operator	31K
Minimum wage	26K
	(source: StepStone.de, Gehalt.de)

Income Taxes and Mandatory Contributions Payable by Individuals

Gross salary may differ quite substantially from net salary after taxes and social security contributions, especially for high income individuals. The major factors that affect mandatory charges include salary level, marital status and partner’s income, number of children, church affiliation and the federal state.

Social Security Contributions

Social security contributions make up 19.6% of gross income until a certain ceiling is reached. The ceilings are higher in West Germany and a little lower in East Germany to compensate for lower salary levels in the East. Out of those 19.6%, pension insurance accounts for 9.3%, health insurance for 7.3%, long-term care insurance for 1.7% (for a person with one child) and unemployment insurance for 1.3%. Social security contributions are deducted from the gross salary before calculating taxes. Moreover, employers contribute the same amount as employees, that is, 19.6%.

Personal Income Tax

Germany has a rather complicated taxation system and personal income taxation is no exception. There is a progressive personal income tax rate starting from zero and ending at 45% for high-income individuals earning more than 277,825 euros a year. The tax rates 42% and 45% are flat within their respective brackets whereas within the 11,605-66,760 euro bracket the tax rate rises geometrically from 14% to 42% (see below).

Personal Income Tax Rates in Germany for TY 2023 Payable in 2024/25

Singles (EUR)	Married Couples (EUR)	Tax Rate
0 – 11,604	0 – 23,208	0%
11,605 – 66,760	23,209 – 133,520	Starting at 14% and geometrically increasing to 42%
66,761 – 277,825	133,521 – 555,650	42%
277,826 and above	555,651 and above	45%

* The brackets for tax rates in 2024 changed due to raising the tax free allowance by 696 euros for a single person and, especially, due to raising the threshold for the 42% bracket by nearly 4,000 euros to reflect the stubbornly high inflation.

Solidarity Surcharge

There is also an additional type of income tax, the so-called solidarity surcharge, equaling max. 5.5% of income tax, which comes on top of the regular income tax but it is only paid in full by high-income individuals. For example, for 2023 (i.e., effective from January 1st, 2024), a single person with no kids who pays less than 18,130 euros a year in taxes (i.e., earning less than ca 80K euros annually) is exempt from the solidarity surcharge while for a single person who earns between approximately 80K and 120K euros annually the solidarity surcharge increases geometrically from zero to 5.5%. Finally, anyone single with no kids who earns more than ca 120K euros a year pays the full 5.5% surcharge. The solidarity tax was introduced in 1991 as a temporary measure to help finance the costs of German unification and, in order to remain true to its temporary status, it was dramatically reduced at the beginning of 2021 so that about 90% of taxpayers were exempted from paying this tax.

Church Tax

Moreover, a church tax, which is either 8% or 9% (depending on the federal state) of income tax, is payable by all registered church members in Germany. To confuse you even more, the amount paid as church tax is fully tax deductible (nonetheless, it will still reduce your disposable income). A foreigner who does not wish to pay a church tax in Germany should never mention their church affiliation in any official document (e.g., in residence registration). Otherwise, Roman Catholics and Protestants will most likely need a written proof (a certificate) that they quit the church in order to avoid paying the German church tax.

Tax Deductions

The German personal income tax law allows for a number of tax deductions, both related and unrelated to taxable income, such as training and commuting expenses, dual household costs, work-related insurance costs, contributions to voluntary health insurance and pension schemes, church tax and a variety of expenses related to bringing up children (e.g., childcare, school fees).

Personal Income Tax Calculation: Examples

This example may give you an idea of how much you would have to pay in taxes and social security contributions if you lived in Germany. In 2024, a person who has a median German gross salary of 44 thousand euros per year, is single and is not a registered church member (pays no church tax) earns a net salary of 29 thousand euros per year. However, if that person had a spouse who earned significantly less, their net salary would be approaching 33 thousand euros a year (i.e., ca 3.6K euros more). Using the same example but a gross annual salary of 60 thousand euros, the person’s net income would be 37.5 thousand euros and 42 thousand euros, respectively (i.e., a difference of 4.5K euros). Likewise, at 80 thousand euros a year the difference in net salary would be between 48+ thousand and almost 55 thousand euros (i.e., 6.3K euros). To estimate your potential net salary you can try one of many German gross-net wage calculators available on the internet (e.g., this one).

Cost of Living in Germany

Germany’s price level is generally in line with the EU average. That is, life in Germany is less expensive than in the neighbouring Luxemburg, Switzerland, Denmark, Belgium and even France and Netherlands, or in the Nordic states (Norway, Sweden and Finland), but it is more costly than in Spain, Portugal or Greece. In Q2 2024, the monthly living costs in Germany were estimated at around 1,150 euros if living in a student dormitory or sharing a flat (renting a flat on your own would push them well over 1,150 euros), and at 1,020 euros for university students and a little less for trainees in vocational training programmes. This is approximately the monthly amount you will need to prove you have for the duration of your stay when applying for a certain type of visa. To be absolutely precise, beginning from September 1st, 2024, you need to have 992 euros a month at your disposal when applying for a study visa. On the other hand, when applying for a visa for vocational training, 903 euros a month are enough. This limit for a blocked account has not changed since January 2023, so it may be raised later in 2024. Moreover, 1,027 euros a month are needed for a visa for seeking a vocational training position or for a job-search opportunity card.

Rental Costs

Rent is the single biggest cost of living, which is not surprising considering the density of population in Germany. Home ownership in Germany has been traditionally relatively low as most people used to live in rental apartments. This has changed recently as many Germans fearing instability of their currency and encouraged by low interest rates bought properties. In addition, Germany has experienced a sharp increase in net immigration since 2010 which has led to an increased housing demand. As a result, property prices have seen a steady growth for more than a decade until their peak at the end of 2022 but are finally declining since then. Due to this trend reversal, the rents have risen more than property prices for the first time in many years (ca 4% in 2023) and are expected to continue growing in line with increased interest rates. Furthermore, a recent influx of refugees from Ukraine is an additional factor pushing the rents higher despite weakening property prices.

However, rents vary wildly depending on the location. A small studio flat can cost as little as 470 euros a month including utility bills (except for electricity, which is usually paid extra) in a small town but well over 1,000 euros in central Munich. Likewise, rent for a two bedroom apartment can be less than 750 euros a month (including utilities) but as high as 2,000 euros. Generally, 780 euros a month should be enough money to rent a studio flat (including utility bills) and 1,350 euros a month to rent a mid-sized two bedroom flat (up to 85 square metres) in a decent location in most parts of Germany.

But, let’s do some simple maths. Currently, the average apartment rent in Germany is 11 euros a month per square meter excluding utilities. This is the so-called ‘Kaltmiete’. However, in Munich (the most expensive town in Germany) it is rather around 22 euros a month. For a ‘Warmmiete’ factor in additional 2.50 euros per square meter for utility costs and other expenses. On top of that add some 40-60 euros a month for electricity. Using these assumptions, an average flat in Germany (the average size is 68 square meters) will cost you around 970 euros a month to rent. Please note that the typical size of a studio in Germany is 30-45 square meters while the average two bedroom apartment has 65-90 square meters.

Security Deposit and Compensation Fee

When renting a flat, it is necessary to factor in further expenses other than simple rent. A tenant will be typically asked for a security deposit (usually worth one month’s rent but it can be up to three months) and a broker fee equal to one month’s rent if they use a real estate agent. In addition, rent is usually paid in advance (always at the beginning of each month) and it is not uncommon to be asked to pay Ablöse (compensation for investments made by the previous tenant). This can be up to several thousand euros if the previous tenant made significant improvements in the flat. Hence, the new tenant pays Ablöse to the outgoing tenant rather than to the landlord. It is common that tenants make small improvements in the rented apartment such as installing lighting and buying their own furniture (sometimes even the whole kitchen including a cooker, fridge, dishwasher and sink).

Property Prices

Just like rents, German property prices vary significantly between regions and towns. For example, in June 2024, the average apartment price per square meter in the formerly heavy-industrial Dortmund (the eighth largest German city with a population of 600 thousand located in Western Germany) was around 2,600 euros (source: Engel & Völkers). Compare this with ca 9,070 euros per square meter (the same source as before) in notoriously expensive Munich (the capital of the southern federal state of Bavaria and the third largest German town with a population of 1.5 million). It goes without saying that a new or newly renovated apartment in one of Munich’s prime locations will cost you a lot more than 10K euros per square meter. As of Q1 2024, the average price per square meter to buy an apartment in Germany was just under 3,150 euros (source: Statista). Thus, 3,150 euros per square meter should buy a decent apartment in most parts of Germany with the exception of the largest and the most expensive cities like Munich, Frankfurt, Hamburg, Stuttgart, Dusseldorf or Berlin.

Transportation

Germany’s public transportation system in and around towns is extremely reliable, efficient and reasonably priced, especially if you buy discounted monthly, quarterly or yearly travel cards. Commuting costs are tax deductible and that is also true when using one’s own car. When doing a tax return, people driving their own car to work can deduct 30-38 cent per kilometre whereas one litre of gasoline and diesel cost around 1.75 and 1.63 euros, respectively (as of July 30th, 2024). Used cars in Germany are among the least expensive in Europe.

Food, Clothing and Other Costs

Your monthly expenses on food will largely depend on your lifestyle, whether you like eating out or making your own meals. In general, food prices in supermarkets are very reasonable in Germany. In addition, large German employers offer meals at a reduced price in their own canteens. Likewise, clothes can be bought very cheap in Germany. However, some foreigners may find prices of certain services such as private childcare, dry cleaners, hairdressers or residential parking quite high when compared with prices in their home country.

Salaries vs Cost of Living in Germany

• A single person on minimum wage working 40 hours a week will bring home 1,565 euros a month which is 415 euros above the average monthly cost of living in Germany,
• A single person earning the German average salary of 4,187 euros a month makes just over 2,710 euros netto which is 2.3 times the average cost of living. Using the median German salary of 3,645 euros a month instead results in net salary of 2,420 euros a month which is still more than twice the cost of living.
• A single nurse earning the average gross salary for a nurse in Germany of 3,765 euros a month makes at least 2,485 euros netto which is more than twice the average cost of living for a single person.
• A general practitioner (family doctor) who is single having the average gross salary in his branch of 7,900 euros a month earns 4,650 euros after tax and that is more than four times the average cost of living in Germany.

These are just a few examples to illustrate what some German salaries are really worth. When doing your own comparisons do not forget that the average cost of living in Germany varies mainly due to differences in rent so that the same salary will buy you significantly less in fancy places like Munich than in less affluent parts of Germany.