In this blog post, we explain how gross and net salary are calculated in Germany. We also provide a model calculation for salary level P5 under the TVöD.
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!
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.
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.
Various taxes and deductions are subtracted from the gross salary to determine the net salary. The most important deductions include:
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.
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:
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:
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:
|P 5 ..||1||2||3||4||5||6|
|Basic Salary:||2376.30 €||2596.81 €||2661.62 €||2769.93 €||2851.19 €||3042.09 €|
|Total Gross:||2376.30 €||2596.81 €||2661.62 €||2769.93 €||2851.19 €||3042.09 €|
|Total Net:||1632.42 €||1753.72 €||1789.03 €||1847.86 €||1891.73 €||1994.11 €|
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).
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?
|Type of insurance||Its benefit|
|Health Insurance||Medical care|
|Retirement Insurance||Retirement savings and financial support|
|Unemployment Insurance||Financial support in the case of unemployment|
|Long-Term Care Insurance||long-term care in the elderly years|
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