Immigration & Earnings

Immigrants Are Increasingly Better Qualified

The qualification profile of immigrants has been changing significantly in recent years, with more and more immigrants of working age holding academic degrees.

Between 2005 and 2016, the proportion of people aged 25 to 65 with migration experience and an academic degree increased so much that it is now roughly equal to the share of the total population in Germany within the same age group. As a result, the qualification structure of immigrants no longer differs significantly from that of the overall population in Germany.

This shift can be attributed to the increasingly simplified immigration procedures for people with academic qualifications.

Thanks to the Recognition Act (Anerkennungsgesetz), which came into effect in 2012, immigrants and prospective immigrants can have their foreign qualifications officially recognized in Germany. This is a crucial step for non-EU immigrants who do not have an academic degree and wish to pursue employment in Germany. Even for EU nationals working in regulated professions, such as doctors or lawyers, recognition is required to practice their profession in Germany.

The success rate for these recognition processes is high: the total number of positive decisions regarding the recognition of foreign non-academic vocational qualifications grew significantly, from 7,980 in 2012 to 65,300 in 2023. Furthermore, 45% of these applicants achieved full equivalence of their qualifications.

This progressive system offers a favorable foundation for immigrants who are looking to find a job and build a career in Germany, providing valuable opportunities for skilled professionals from around the world.

Salaries in Germany

Salaries in Germany vary significantly depending on several factors such as the industry, level of qualification, work experience, geographical region, and company size. In general, salaries are considered competitive compared to other European countries, although the cost of living in Germany can be high, especially in large cities like Munich, Frankfurt, or Hamburg.

How Salary is Calculated in Germany

The gross salary in Germany represents the total amount before any deductions for taxes or social security. This is what is stated in your employment contract. The net salary, which is what you actually receive, is calculated after these deductions. Here’s how it works:

Gross Salary

This is the total amount your employer pays before any deductions. For example, if your gross salary is €3,000 per month, that’s the amount stated in your employment contract.

Taxes

Germany uses a progressive tax system, meaning that the higher your salary, the higher the percentage you pay in taxes. Income tax rates range from 0% to 45%, depending on your salary level.

Social Security Contributions

Health Insurance: Around 14-15% of the gross salary, split between the employee and the employer. Pension Insurance: Around 18.6% of the gross salary, also split between the two parties. Unemployment Insurance: Around 2.5%, split between the employee and employer. Long-Term Care Insurance (Pflegeversicherung): Around 3.05%, split between the two.

Other Deductions

There may be additional contributions, such as those for private pension funds or union dues, depending on the employment contract.

Example:

If an employee has a gross salary of €3,000 per month, here’s an approximate breakdown of the deductions:

Taxes (depending on your tax bracket): €300 to €1,000.

Social security contributions (health insurance, pension, unemployment, etc.): Around 20% to 22% of the gross salary, so €600 to €660.

Thus, the net salary received would be around €1,800 to €2,100 per month after these deductions.

Minimum Wage

Since 2022, Germany has implemented a legal minimum wage of €12 per hour. This means that for full-time workers, the minimum gross monthly salary is approximately €2,080 (around €1,700 net).