Rise of Minimum Wage as of January 1st 2017:
As of January 1st 2017 the statutory Minimum Wage in Germany rises from € 8.50 to € 8.84 gross per hour. It is the first increase, since the Minimum Wage Act (Mindestlohngesetz – MiLoG) has put into effect a statutory minimum wage for Germany in 2015. This statutory minimum wage applies – with some exceptions – to all employees working on German territory. Most interim arrangements that allowed for lower wages for certain groups of workers expired on 31st of December 2016. As the Minimum Wage Act only states a base amount to be paid for any employee in Germany, binding collective bargaining agreements (Allgemeinverbindliche Tarifverträge) stipulate higher hourly wages in many work areas.
Clients employing blue collar workers in Germany with low salaries as well as clients who have marginal employed employees (geringfügig Beschäftigte) are advised to check whether they comply with the new Minimum Wage.
New contribution assessment ceilings for statutory Social Security as of January 1st 2017:
In Germany, most social benefits such as health insurance, long-term care insurance, pension insurance as well as unemployment insurance are statutory and compulsory for the absolute majority of employees. These programs are generally financed by employers and employees jointly. The contributions employers and employees have to pay are determined by percentage rates applying to the gross salary of the employee. The contribution assessment ceilings (the maximum amount of monthly income to which the contribution rates apply) are subject to periodic changes. As of January 1st 2017, the monthly contribution assessment ceilings and percentage rates are as follows:
|Program||Contribution Limit/Month||Employer Portion||Employee Portion|
|Health insurance: 14.6% shared equally + additional contribution by employee (1.1% in average depending on individual insurance company)||€ 4,350.00 (West & East)||Up to € 317.55||Up to € 317.55 + additional contribution|
|Long-term care insurance: 2.55% shared equally (except Saxony, where employees cover 1.775% and employers cover 0.775%)||€ 4,350.00 (West & East)||Up to € 55.46||Up to € 55.46 + 0.25% if employee is older than 23 and has no children|
|Pension insurance: 18.7% shared equally||€ 6,350.00 (West) € 5,700.00 (East)||Up to € 593.73 (West) up to € 532.95 (East)||Up to € 593.73 (West) up to € 532.95 (East)|
|Unemployment insurance: 3% shared equally||€ 6,350.00 (West) € 5,700.00 (East)||Up to € 95.25 (West) up to € 85.50 (East)||Up to € 95.25 (West) up to € 85.50 (East)|