3000 euros a month in Germany? Is this much or not? It depends – the correct answer is. Because the difference between gross and net pay is large, Dunja Dragoevic writes in an article on Deutsche Welle.
Here’s what you need to know about salaries in Germany:
According to statistics, the average gross monthly remuneration in Germany in 2018 was just that – nearly 3,000 euros. And the average net salary was 1945 euros. The difference of over € 1000 is covered by a variety of tax and insurance deductions. However, each is different in size – it depends on the tax bracket of the worker. And the tax group itself depends on its marital status – marital or not; with or without children; divorced or married. What matters is whether the spouse works and how much he earns, more, less, or more than the other.
Some specific examples
Take the following example: working father of two, earning € 2948 gross per month. With tax group 3 because his wife earns less than him. The gross salary deducts about EUR 167 income tax, nearly EUR 215 (7.6%) for health insurance, EUR 274 (9.3%) for pension, EUR 36 for unemployment insurance (1.25%) and EUR 45 for adult care insurance. And poor people (1.5%). This leaves his workers with a net income of € 2,209 per month. If a worker is a member of the Catholic or Protestant church community, he or she should also be subject to a church tax of around € 40.
Here is another example: working without children, without a spouse receiving the same gross monthly salary – EUR 2948. The tax deductions are higher here, and a further EUR 22 solidarity tax is deducted from the remuneration, from which the employee in the first example is exempt. The net salary, in this case, amounts to EUR 1944. Not to forget the possible church tax of about 40 euros.
Germany is among the EU countries where the minimum wage is set by law. It amounts to 9.19 euros (November 2019). Only in four other EU countries is the minimum wage higher: in Belgium, Ireland, the Netherlands, and France. The lowest is the statutory minimum wage in Bulgaria (1.72 euros), in Latvia it is 2.54 euros, in Romania – 2.68 euros, in Hungary – 2.69 euros, in Croatia – 2.92 euros.
If you are not employed in the public services sector and are not an employee of a private company but work part-time, you are required to pay tax and insurance deductions on your own. In that case, you need a tax advisor to help you, because, in Germany, it is no easy task to prepare a tax return. Keep in mind, too: there should be no joke with the German tax authorities. In addition, German tax law is quite complex, and a tax advisor will not only help you fill out your tax return properly but may also find opportunities to deduct your tax deductions.
Higher than the EU average, lower than Switzerland
Does this mean that wages are still high in Germany? Compared to many other European countries – such as Bulgaria, Romania, Croatia – yes. For example, the average gross monthly remuneration in Bulgaria in the second quarter of 2019 was BGN 1,260 (approximately EUR 625). Let us emphasize that this is a legal and officially registered employment relationship. The statistics do not cover “black work”.
Statistics show that wages in Germany are well above the European average but lower than in Switzerland, Luxembourg, and Denmark. But the “bare” figures do not give a complete idea: they must be considered together with the costs in the respective country. In 2017, for example, average costs in the German household amounted to € 2,517 per month. Of these, an average of € 900 goes for residential rent and overhead. Let everyone consider for themselves whether the 3,000 euro gross wage in Germany is much or little.
How poor German pensioners live
There is simply no money left for coffee or new clothes. A team of Deutsche Welle visited two German pensioners living on the poverty line. Whether the so-called. Is a basic pension due in 2021 will improve their lives?
Hans Rudolf W. is 77 years old. Since retiring, she spends most of her time at home with her husband. It weighs on him that he cannot afford to sit in an establishment, order a piece of cake and a cup of coffee. He never believed that one day it would become a luxury for him. He has almost 50 years of work experience behind him. First, he worked at a bank, then as a taxi driver, and finally as a house manager. But today, his pension is not enough.
It is exactly 335 euros. And this is well below the poverty line in Germany. Therefore, Hans Rudolf V. receives 300 euros from the state. So much is applied to his wife.
The social service is renting and renting their two-bedroom apartment in Bonn. Thus, the state fills the gap between their pensions and the subsistence minimum. Every resident of Germany is entitled to this financial support – no matter how much money he or she has made into the social system of the country.
More and poorer retirees in Germany
According to the German Institute for Economic Research, nearly 17% of pensioners in Germany are at risk of poverty. And in the next 20 years, this percentage may rise to 21.6%.
In order to prevent such a scenario, the Berlin-based coalition has decided to introduce the so-called — basic pension. From 2021 onwards, all those with 35 years of service will receive at least 10% above the subsistence minimum. No matter what their insurance contributions were in time. Years spent caring for children, or sick relatives will be recorded as work experience. According to Interim Democratic Party Chairwoman Malu Dreyer, about 1.5 million people will benefit from the changes.
The purpose of the project to introduce the so-called basic pension is to help people like Hans Rudolph W. who have worked a lifetime but receive no more than those who have not paid a cent to the country’s social system.
The current government is the third in a row to include the topic in its coalition treaty.
Previous attempts to change the system for calculating the lowest pensions have failed because of differing views of Christian Democrats and Social Democrats. The CDU / CSU wanted to bind the receipt of the so-called. Basic pension with the needs of the person concerned. They argued that those with side income from rent, accumulated personal wealth, or a wealthy partner should not benefit from the so-called — basic pension. However, the Social Democrats opposed these restrictions. In the end, the two parties reached a compromise – pensioners’ income will be checked, but not their assets and the financial situation of the entire household.
“Let’s go downtown first.”
For Hans Rudolph V., such verification is not a problem. He is still obliged to provide information on his financial situation to the authorities so that he can receive social assistance. The most important thing for him is to have a little more money in his pocket and to save money from going to the social service. Although his resources are limited, he is still happy. Because unlike thousands of other retirees, he does not have to eat in the kitchens of the poor. However, when he needs new clothes or furniture, he is forced to turn to social organizations for help.
And what is the first thing Hans Rudolf W. will do when they introduce the so-called Basic pension? “I’ll go with my wife downtown. We haven’t been there in a long time,” the pensioner says.