Gross Net salary Germany – awareness is the key?

Gross Net salary Germany

Written by Germany Simplified

March 12, 2019

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If you are moving to Germany to work, you should consider your Gross net salary. Typically, your gross salary is the wages the Company will pay you. But your net income is the real picture after you have deducted expenses and tax. It’s common knowledge that Germany has one of the richest and biggest economy, so you will enjoy working in Germany.

While working in Germany, you will receive lots of fantastic benefits such as a clean and safe environment, generous welfare systems and free healthcare and education benefits. Even as a foreigner, you will find the German work culture pleasurable. Germans don’t long hours in many offices. They love to enjoy their lives and have better working hours.

What’s the real picture of the Management culture in Germany?

Even as Germans don’t work long hours, you are expected to be highly productive. There’s no time for chatting or socialising when working. You can only do so during the break period which is within 15 to 45 minutes. Punctuality is essential, and you should respect the hierarchical systems. Germans are very strict about both things.

If you are worried about your basic rights, you don’t have too. Employees enjoy rights to sick pay, holidays, receive training, paternity/maternity leave protection and choice to work part-time. The 1976 Codetermination or Worker’s Participation law (Mitbestimmungsgesetz) also protects employees in firms with more than 2,000 workers. This law stipulates that the supervisory board of the company include some employee representatives.

Consider the average gross salary in Germany

The average gross salary in Germany is 3,770 Euros for full-time employees. The minimum wage is just under 1,500 Euros, soGermans enjoy an affluent middle class. However, the average gross salary is a bit different for many parts of Germany. For instance, places in East Germany might earn up to 3,000 Euros a month on average. Also, your gender might also affect your wages. German men earn 21% more than women on average.

Factors that affect your gross net salary in Germany

If you have a lot of professional experience and qualifications, you might earn a lot of money as your gross salary in Germany. But some factors will affect your net pay. They include:

Housing

Housing might be your biggest expense, and it varies between cities. Smaller cities in Germany enjoy lower housing expenses, but the average salary is also small there. The bigger town shave big jobs, but you will face bigger housing expenses. Munich, for example, pays the highest housing rate in Germany. The price is about 18 Euro per square meter, so if you want to work in Munich, you should check your salary weight.

Internet and Telephone

The Internet and telephone bills in Germany are very high. Getting your apartment hooked to the internet might cost you about 25 Euro for a 25bit landline. There is also a problem with the waiting time. You might have to wait for up to 3 weeks before your flat gets connected due to the long waiting lines.

You probably can’t do without a smartphone these days, but you will have to budget yourself as well because it is very pricy. However, you can choose the pre-paid services options which are reasonably cheaper than post paid options.

Social life

As an expat working in Germany, you can use an app called International Friends to connect with other expatriates and make new friends. It is a free app and a great way to adapt to German society by learning from other foreigners. Germany has a lot of social attractions, so there are many ways to enjoy yourself. However, if your lifestyle is a bit too much, you will incur a lot of expenses.

Transport

This is the lowest rates you will pay. If you don’t have a car, you can spend about 120 Euro per month for local transport. But, if you live outside the centre of your city, you may pay slightly higher rates.

However, getting a car also comes with some costs as well. If you get a car, you will have to pay, for insurance, depreciation, and tax. Your highest expenses for your car will be the depreciation rate. For example, if you drive a car up to 15,000km per year, you will pay about 400 -700 Euro per month.

Food and Drinks

Depending on your taste, you can spend up to 25 Euro per person if you don’t do any fancy spending. But if you like to go to a restaurant now and then, you might spend between 300 Euro to 600 Euro per person in a month. This figure depends on you eating all kinds of food so that it might be a bit lower or higher than that.

Children

Apart from your home, your kids would also require a massive amount of your money. We can’t really estimate how much you will be spending here, but the costs might be within the range of 200 to 500 Euros a month. You should also note that the German government will pay you 200 Euro support very month per each child. It’s a common joke among some people, that the more kids you have, the better.

Insurance

Germany has many different kinds of insurance. Some are necessary others mandatory or optional. Third-party private liability insurance is the least expensive and covers your family if you commit a crime. Under German law, damage claims are very painful, and there is no limitation to how much the court might find you. So, this insurance is necessary to keep your family covered.

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If you are a tenant, you may have to pay household contents insurance for rental furniture. There is even insurance for bicycles and window panes. Your insurance might also be affected by your job, but there are ways to save a few Euros.

For instance, if you have a private insurance premium, you might be able to cut down your insurance premium cost, but this also depends on the type of coverage.

German Income tax

Due to the high-income tax paid by single people, some expats might give you the advice to get married. Married people enjoy lots of lower tax benefits especially if one spouse makes a significantly lower amount. Germany also uses a progressive income tax system where rates range between 19 to 45 percent. Germans also pay Church tax so if you have a religion; this may apply. This fee is usually 8 to 9 percent. If you don’t want to pay such fees, never mention any church affiliation in an official document.

How to use a gross net wage calculator Germany to get a clearer picture?

Once you have checked out of the factors, you can now use a gross net wage calculator to determine your net salary. You can find these calculators online for free. Also, your overall figures will be more accurate than doing the calculation manually. Many of these calculators can also be used to determine health insurance, unemployment insurance, pension insurance, and many other deductions.  If you are confused about your financial picture, you can also consult a financial expert to help you.

One of the most used website for this purpose is the Netto Brutto Calculator. It is does give almost the realistic calculations for your net salary.

Another way to get these calculations are through an Android app & iOS App made by a company very known in the German market for its Tax declaration softwares. The Wiso Steuer products.

What should you consider a good salary in Germany?

Your professional experience might make you earn a lot of money as gross salary in Germany. But, due to your lifestyle, it may or may not be considered a good wage. Certain wages might be sufficient for you in a small city but different in a bigger one.

Conclusion

Now that you have seen the various factors, you can now find the gross net wage for your expected pay and make your adjustments. With these calculations, you can begin planning your budget so that your move to Germany, would be smooth and easy.

Creating a good cover letter and a CV does help in getting a good job with better paying salary.

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