Discover the factors affecting average salary in Germany, such as gender, location, and job sector. Learn about the latest salary trends for a clearer understanding.
The average annual gross salary for German employees stands at 49,260 euros. Yet, this figure remains out of reach for certain professionals like salespeople, caregivers, and those in child and youth welfare roles.
Being the world’s fourth-largest economy, Germany boasts salaries higher than the global average. But what factors contribute to this amount? How do salary opportunities differ across the country? And how does Germany fare compared to other European nations? Let’s delve into these key questions to gain a comprehensive understanding.
What does ‘Average Salary in Germany’ mean?
The average income in Germany is calculated annually by the Federal Statistical Office and then disclosed by the Federal Government & Bundesrat. This data reflects the average gross earnings of all employees covered by social insurance.
It’s important to note that the info provided by the FSO represents the average income of all full-time employees in Germany. This is known as the arithmetic mean.
However, a more meaningful approach uses the median, also known as the central value. The median signifies the middle point when arranging individual data in ascending order. Unlike the arithmetic mean, the median does not consider outliers, such as the salaries of high earners.
In contrast, the arithmetic mean divides the total income by the number of full-time employees. This as a result ends up allowing a few high salaries to impact the overall average.
Average Salary in Germany – The Industry matters!
In April 2022, the FSO reported that a full-time German employee earned an average of €4,105 per month. This amounts to €49,260 per year. Compared to 2021, there was increase of €720 annually.
However, significant differences exist in the average salary of Germans. Factors such as federal state, industry, and gender continue to play a major role in shaping income distribution in the Federal Republic.
One important factor affecting the average salaries of Germans is the industries they work in. It might seem unfair, but some industries do pay a lot more than others! So it really makes a difference which industry you work in. For instance, Finance Industry pays the highest on average. On the other hand, hospitality pays the least.
But you should not judge the industries based on these numbers! Averages do not tell the whole story.
Which state has the highest salary?
In Germany, there are 16 federal states. So it is important to look at how each state fares. Because, where someone lives also impacts how much they are going to earn. Average salary is affected by place of residence.
In 2021, Hamburg had the highest average monthly income at €5,209. Followed by Hesse and Baden-Württemberg. Mecklenburg-Western Pomerania had the lowest at €3,467 per month.
Even after 30 years of reunification, there’s still a big gap in earnings between West and East Germany. Most of the high-paying jobs are in the original federal states, while the former GDR states have lower incomes. Berlin is an exception, with an average wage of €4,662. This is higher than North Rhine-Westphalia and Bremen.
For more recent data in 2022, StepStone’s report shows average salaries using the median.
Gender Pay Gap! Does Gender affect average salary?
In 2021, men in full-time jobs earned 23.20 euros per hour, while women earned 19.12 euros—an 18% difference. This gap, called the “gender pay gap,” means women get paid less than men for the same work. The difference is even higher in West Germany and Berlin (19%) compared to the East (6%). This gap has stayed nearly the same since 2002. The government aims to reduce this difference to 10% by 2030.
So yes, Gender is a key factor in deciding the average salary!
How much of the Average Salary in Germany is disposable?
In 2022, the average disposable income in Europe was €16,344 per person. Liechtenstein led with €66,204 per person, four times higher than the European average. Switzerland followed with €41,758, and Luxembourg with €37,015. Notably, Germany’s average income also stood at €16,344, aligning with the European average.
In the European comparison, Germany ranks eighth with a net income of €24,807 in 2022. Among 42 countries studied, only 16 surpassed the European average net income. Notably, Italy secured 16th place with a disposable net income of €18,905, above the European average. However, Spain ranked 17th, where people earned €15,314 less than the average European. At the bottom of the list is Ukraine, with a net income of only €1,540 per year.
Conclusion
In conclusion, Germany stands among the top earners in Europe, with an average net income of €24,807 in 2022. While some European countries enjoy incomes well above the average, others, like Spain, fall below. It’s evident that income disparities exist across Europe.
In addition to learning about the average salary, one must also learn about putting that salary to use! In Germany, there are many promising investment avenues where you can put your money to work.
You can check out our Blog Posts for more detailed articles on getting started with Investing in Germany!
Note : This article was originally published on WiWo