Salaries in Germany: gross, net and deductions explained

In Germany, almost every salary conversation is about annual gross pay (Jahresbrutto). That is the figure in the job ad, in the interview and in the contract. What actually lands in your account each month is net pay (Netto), after income tax and social contributions.

The gap between gross and net is significant and depends on marital status, children, registered religion and health insurance. Comparing offers by gross pay without estimating net can lead to surprises.

Social contributions are split roughly in half between employee and employer. Combined, the employee's share is usually around a fifth of gross pay, up to a contribution ceiling.

• Income tax (Lohnsteuer): progressive — the higher the salary, the higher the rate.
• Solidarity surcharge (Solidaritätszuschlag): today it only affects higher incomes.
• Church tax (Kirchensteuer): only if you are registered as a member of a church that levies it.
• Pension insurance (Rentenversicherung).
• Unemployment insurance (Arbeitslosenversicherung).
• Public health insurance (Krankenversicherung), if you are in the public system.
• Long-term care insurance (Pflegeversicherung).

The tax withheld from your salary depends on your tax class. Single people are normally in class I; married couples can choose combinations (such as III/V or IV/IV) that split the withholding between them. Your class is assigned automatically after you register your address and marry, but couples can request a change. Any overpaid tax can be refunded through the annual tax return (Steuererklärung).

Use a gross-to-net calculator (Brutto-Netto-Rechner) — there are several free and reliable ones. Enter your annual gross salary, federal state, tax class, church tax status and type of health insurance. The result is a good estimate for comparing offers and planning your budget.

• Christmas bonus (Weihnachtsgeld) and holiday pay (Urlaubsgeld): not required by law; they depend on your contract or collective agreement.
• Company pension, public transport and gym subsidies.
• Annual leave above the legal minimum.
• Variable bonus: ask whether the advertised figure includes it.

Research salary ranges for your role and city before the interview — cost of living and pay vary a lot between regions. When asked for your expectation, give an annual gross figure (or a narrow range) based on that research, not a currency conversion of what you earn today.