Working in Germany and entitlement to cash benefits

Are you working in Germany and don't know what benefits you are entitled to? In addition to an overview of the benefits, the following article will give you information on the conditions you need to meet to get them.

Sickness benefits (Krankengeld)

As employment in Germany entails an obligation to be insured against sickness, you are entitled to sickness benefits during your sick leave.

In the event of incapacity for work, you are obliged to inform your employer of your illness as soon as possible, either by telephone or by email. As of 1 January 2023, there has been a switch to electronic sickness certificates, which means that the doctor no longer issues a paper certificate to the employee. The doctor sends the electronic sickness certificate to the health insurance company, which makes the data available to employers. The employee is thus relieved of the burden of handing over the certificate to the employer.

If you are employed for more than 4 weeks, your employer pays 100% of your net wages for the 6 weeks of sickness absence. Thereafter, the sickness benefit will be paid by the health insurance company at 70% of your gross wages.

If you are employed for less than 4 weeks, sickness benefits are paid by your health insurance company from the first day at 70% of your gross salary, but not more than 90% of your net salary for 4 weeks. If the illness continues after 4 weeks, your employer will then pay 100% of your net wages for the 6 weeks of sick leave.

Child benefit (Kindergeld)

Child benefit is one of the basic benefits working parents in Germany are entitled to. You qualify because you are automatically socially insured as a working person.

The application for child benefit is made to the competent Familienkasse office using forms E 401 * and E 411. For the application you will also need:

• the children's birth certificates,
• employment contract,
• proof of permanent residence.

You are also entitled to the allowance if you work in Germany and your children live in your home country with the other parent.

Non-taxable minimum for children (Kinderfreibetrag)

The non-taxable minimum is closely linked to child benefits and at the same time, if you are entitled to one, you are not entitled to the other and vice versa.

In the case of the tax-free minimum, it is a tax credit for the child/children which is not paid directly as child benefit, but reduces the tax liability or the tax to be paid.

Simply put, you have a certain amount exempt from tax. For 2024, this amount is €9,312 per child and is claimed on the tax return.

The amount of the tax-free minimum includes:

• a care, education and education allowance of €2,928,
• the child's subsistence minimum of €6,384.

However, you do not have to claim the tax-free minimum, as is the case with child benefit. The German tax office will decide for itself whether child benefit or the tax-free minimum is more advantageous for you. But what are you obliged to do? You must apply for child benefit!

Unemployment benefits (Arbeitslosengeld)

If you have lost your job in Germany, you will be entitled to unemployment benefit if the following two conditions are met:

• registering with the relevant employment office in German,
• you have been insured for unemployment for at least 12 months in the last 30 months.

Once you meet the conditions and are registered, you will be entitled to a benefit of 60% of your net wages if you have no children. If you have at least one child, the benefit will be 67% of your net pay. The duration of the benefit depends on how long you have been insured and your age.

If you plan to return from Germany, you can apply to export the benefit to your home country 4 weeks after you have been registered. The transfer of the benefit can be done by means of a U2 form, which will be issued to you upon request by the relevant employment office in Germany.

Read also:

Form PD U2 (E 303) - Confirmation of continued entitlement to unemployment benefits

Compared to the PD U1 (E 301) form, if you have already claimed unemployment benefit and plan to move to another EU country while you are receiving unemployment benefit, you will need the PD U2 (E 303) form.

Need help with your German tax refund or getting benefits? Contact us. We will be happy to help you with either your tax return or getting U2 forms etc.