Work in Germany. Minimum wage increase in Germany. The debate over raising the minimum wage has become a focal point for economists, employers, and employees. In early 2024, following recommendations from the Minimum Wage Commission, the German government decided to raise the rate from EUR 12 to EUR 12.41 per hour. Starting January 1, 2025, the minimum wage will increase again. This raise in the national minimum wage will affect approximately 6 million employees.
Minimum wage increase in Germany
The Minimum Wage Commission, comprising representatives from both employers and trade unions, has recommended raising the wage from EUR 12.41 to EUR 12.82, as stated on the German government’s website. For full-time employees, this translates to a monthly income increase to approximately EUR 2,200 gross. Currently, in 2024, the minimum wage stands at EUR 2,151 gross per month. However, it’s important to note that after deducting social security contributions and taxes, employees receive at least EUR 500 less in net income.
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Minimum wage in Germany compared to EU
Among the 27 member states of the European Union, 22 have a statutory minimum wage. There are significant differences in earnings between wealthier and poorer EU countries. Germany, along with Luxembourg, the Netherlands, and Ireland, are among the countries offering the highest basic salaries, all exceeding EUR 2,100. Conversely, according to Eurostat data from January 2024, the lowest monthly minimum wage is in Bulgaria, standing at only 477 euros per month.
Increase in industry minimum wages in Germany
In Germany, there are also industry-specific minimum wages negotiated by trade unions and employers. These wages apply to all companies and businesses within a particular industry, regardless of whether they are bound by collective agreements. All workers in the industry are entitled to compensation in line with the established minimum wage. This is significant because industry minimum wages typically exceed the statutory minimum wage. For instance, starting from April 2024, a minimum wage for painters and varnishers will be introduced in Germany.
How many workers in Germany receive minimum wage?
Approximately 6 million workers in Germany, comprising 15 percent of the workforce, are estimated to be employed in the low-wage sector. This indicates that they earn less than €12.76 per hour and often receive either the lowest national salary or a wage very close to the minimum.
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Is your employer in Germany lowering your pay? This is what comes with it
In Germany, there is a rule that all employers must follow: they must always pay a wage that is at least equal to the established industry minimum wage. If there is no specific industry minimum wage, employers are required to pay at least the general minimum wage. The Customs Office (Zoll) is responsible for monitoring compliance with working conditions as per applicable collective agreements.
In addition to what was previously mentioned, every employee in Germany has the right to receive the minimum wage, which is regulated by various laws including the Minimum Wage Act (MiLoG), the Posting of Workers Act (AEntG), the Temporary Work Act (AÜG), and general labor law. Employers who breach this requirement may face penalties ranging from EUR 200,000 to EUR 500,000. The frequency of violations, the employer’s intentions, and cooperation with authorities are also considered in determining the severity of penalties.