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Minimum wage increase in Germany
8th Apr 2024
In 2024, the minimum wage in Germany is changing again. How will the wage increase be reflected in my payslip?
Minimum wage in 2024
From the January 1st, 2024, the minimum hourly wage will increase from €12 to €12.41. If you work full time, it represents the amount of €2,085.
Minimum wage on payslip
Employees in Germany pay the following insurance contributions from their wages:
- pension insurance: 9.3%,
- unemployment insurance: 1.3%,
- long-term care insurance: from 0.7% (the amount of the contribution depends on the number of children, for childless there is a 2.3% rate applied),
- health insurance: depends on the choice of health insurance company (e.g. AOK Plus health insurance company has a monthly employee contribution of 7.30% + an additional contribution of 0.75%),
- church tax: this is a voluntary contribution, the amount of which varies from one federal state to another,
- solidarity contribution: it is contributed only by those employees who have a payable tax higher than €18,130 (for jointly taxed spouses the amount is €36,260, the amounts shown are valid for the 2024 tax year),
- income tax: based on the employee's gross salary and tax bracket.
Model calculation of the net minimum wage of a 30-year-old, childless employee who is in tax bracket 1. He is covered by AOK Plus health insurance and does not pay church tax:
| Gross monthly salary | €2,085 |
|---|---|
| Pension insurance | €193.91 |
| Unemployment insurance | €27.11 |
| Long-term care insurance | €47.96 |
| Health insurance | €167.85 |
| Church tax | €0 |
| Solidarity contribution | €0 |
| Income tax | €124.08 |
| Net monthly wage | €1,524.09 |
With the increase in the minimum wage, the limit for the minijob has also increased, from €520 to €538 per month.
Read also:
Everything you need to know about minijobs
Are you looking into finding a side job in Germany? Were you thinking about minijob?
Minimum wage and the holiday pay
The increase of the minimum wage also affects the calculation of an employee's vacation pay. The calculation is based on the average gross wage for the last quarter. For an employee with a minimum wage of €2,085 and a five-day working week, the compensation for one day of vacation is €96.23 (this applies to employees whose wage is the same each month).
Calculation of 1 day's vacation pay on a regular gross monthly wage of €2,085 (the monthly gross wage is multiplied by three, which is the number corresponding with quarter of the year. The resulting amount is divided by the number of working days and multiplied by the number of days of your vacation):
- Quarterly wage: €2,085 (monthly salary) x 3 (number of months) = €6,255,
- 1 day's vacation pay: €6,255 (quarterly wage) / 65 (number of working days in the last 13 weeks) = €96.23 1 day's holiday pay.
If the employee has a different wage each month, the compensation for one day of vacation is calculated by dividing the salary for the last quarter by the number of working days.
If you are working in Germany and need help with filing your tax return, applying for child benefits, obtaining documents or any other problem, do not hesitate to contact us.