How can I determine my salary in Germany? This is a question that all international healthcare professionals arriving in Germany for the first time ask themselves. However, it can often be quite complicated to answer accurately. In fact, the German salary structure differs somewhat from that of other countries. Furthermore, these contracts are particularly lengthy and are negotiated by the government and labor unions. While they offer a great deal of security, they do require some explanation. We’ll explain the differences!

What is “Income” in Germany?

In Germany, there are two types of income: gross salary and net salary. Gross salary is what the employee receives from their employer before taxes and deductions are taken out. Net salary is what the employee actually has available to cover their cost of living.

Calculation of Gross Salary

Gross salary is calculated based on the collective bargaining agreement (Tarifvertrag) applicable to the individual employee. In Germany, there are many different collective bargaining agreements that apply to various industries and professional groups. The amount of gross salary depends on various factors such as work experience, qualifications, and the employee’s position.

Calculation of Net Salary

Various taxes and deductions are subtracted from the gross salary to determine the net salary. The most important deductions include:

• Income tax
• Church tax (depending on the federal state)
• Health insurance
• Pension insurance
• Unemployment insurance
• Long-term care insurance

The Difference between Gross and Net Salary

The difference between gross and net salary is not little. In Germany, the average deduction for taxes and deductions is about 20%. In other words, an employee with a gross salary of 3,000 euros will have only about 2,400 euros net to live on. Additionally, some types of insurance are mandatory in Germany and are deducted directly from the salary, leaving roughly 2,000 euros for the employee.

Calculation of Net Salary

The salary paid to a nurse, as determined by the government and labor unions, is a gross salary, meaning it does not include the specified taxes and deductions. These are then withheld by the employer and remitted to the tax authorities every month at the time of salary payment, depending on various variables. The different German taxes include:

• Income tax
• Church tax
• Solidarity surcharge
• Additional contributions and others

Thus, each contract is an individual case. Moreover, the amount of taxes to be paid is calculated based on the tax class, which depends on the taxpayer’s family situation (marital status and number of children). Various situations are considered in this context.
The tax class ranges from I to VI:

• I = single
• II = single parent
• III = married, with two incomes, referring to the higher income of the two spouses
• IV = married, both spouses earn equally
• V = married, with two incomes, referring to the lower income of the two spouses
• VI = part-time job

Case Study on the Salary of a German Healthcare Worker
Finally, let’s take the case of a healthcare worker working as a nursing assistant and characterized by the following administrative features:

• Non-Christian (e.g., Muslim, Buddhist, etc.)
• Not yet recognized as a nurse (“P5”)
• Single with no children
• No additional health insurance contributions to pay
• Started work in 2020
• Resides in North Rhine-Westphalia
• 0 years of experience in Germany (column “1”)

The Upside of Deductions

While deductions for taxes and contributions can be frustrating, they also have their benefits. They ensure that employees in Germany have a robust social system, including statutory health insurance, retirement benefits, and unemployment insurance. A tip for everyone: German dentists have an excellent reputation, their practices are very modern, and treatment is often free (except for dental cleaning).

Conclusion

Calculating gross and net salaries in Germany is relatively complex. It is essential to understand the various factors that impact on net salary. You can quickly and easily calculate your net salary using a gross-to-net calculator online.
What Are the Deductions For?