Are you planning to work in Germany or are you already here and want to better understand your payslip? Then you’re in the right place. Gross salary, net salary, social contributions, and taxes – the whole system seems quite complex at first glance. But don’t worry, you’ll get there. In this article, we look at the latest figures for 2025 and show you how much actually ends up in your pocket after all deductions. You’ll learn what average salaries in Germany mean, how high the income tax is, and why the median is often more meaningful than the national average. This is knowledge that really pays off – not just when signing a contract, but also in tax planning.
Do you earn average or above average? Check what the German “national average” really means
Two central terms appear in German statistics: arithmetic average salary and median. This is a seemingly small difference, but for someone who wants to honestly assess their position in the labor market, it is a pretty important thing.
- According to 2024 data, the average salaries in Germany are 62,235 euros annually, but don’t be fooled – this figure is skewed upwards by the best-paid specialists or executives.
- A much more representative figure is the median of salaries in Germany, which was 52,159 euros in the same period. That means half earn less, half earn more.
Conclusion? If your salary is exactly in this range, you are within the typical wage spectrum. Anything above that can be considered above average – although you naturally have to consider industry, region, and work experience.
A simple tax return in 12 minutes?
Choose Taxando!
How much of the salary remains “net” in Germany? The differences can be surprising
This is one of the most common questions from people considering working in Germany or comparing a gross offer with German conditions. Because as we all know – gross is one thing, net is a completely different story.
For example: with an annual income of 46,650 euros, the average net salary is about 30,500 euros. That means net, a little over 65% of the full salary ends up in your pocket. On this basis, it can be said that average net salaries in Germany are about 2,540 euros monthly. However, you must remember that these amounts depend heavily on the tax class, marital status, and number of children. Single without children in the so-called tax class I have slightly higher deductions. Nevertheless, the system is transparent, and the amount of deductions is relatively easy to estimate in advance – which greatly facilitates budget planning.
How high are the average salaries in Germany? Social contributions step by step – what exactly disappears from your wages?
Before any tax is deducted, the German employer deducts a number of mandatory contributions for social insurance from the salary. And here, you should know what exactly makes up this amount.
- Pension insurance is the largest part – a full 18.6%, half of which is borne by the employee.
- Then we have health insurance – an average of 16.1% (i.e. 8.05% on the employee side), nursing care insurance – 3.4% and unemployment insurance – 2.6%.
Together this amounts to about 20.35% social contributions from the gross salary. And even though this may seem like a lot, you should keep in mind that in return, you gain access to one of the best-functioning social systems in Europe. That’s why salaries in Germany are relatively high, but their effective value depends on the amount of the contributions.
Income tax in Germany 2025 – how much do you give to the state and can you pay less?
The German tax system is progressive – this means the more you earn, the larger portion of your income you give up. In 2025, there are five main tax brackets. Income up to 12,096 euros is tax-free. Then the rates increase: from 14% for incomes between 12,097 and 17,443 euros up to 45% for income over 277,826 euros annually. For a single person with median-level income the effective tax rate is about 19.7%.
But beware – social contributions as well as family and personal allowances are deductible. If you’re wondering how high the tax on income in Germany is, the answer is: it depends. But you should know that the system allows legal optimizations, for example, through joint assessment by spouses, child allowances, or contributions to additional insurance.
What is the solidarity surcharge and who does it affect in 2025?
The “Soli”, as Germans colloquially call this tax, causes some emotions – especially since its original purpose was to finance the reconstruction of the eastern federal states after reunification. Although its abolition has been talked about for years, the solidarity surcharge still applies in 2025, but only for people with higher incomes. The exemption limit is 39,900 euros annually. This means that people with lower incomes – that is, the majority of workers – do not pay this tax anymore. For those who exceed the limit, a rate of 5.5% on the amount above the limit is calculated. For comparison – with a gross median income, the “Soli” is a symbolic 373 euros annually. This is not an amount that disrupts the budget, but good to know – especially when planning to work or live in Germany long-term.
Net vs. gross – how do you independently assess your salary in the German system?
For many, the biggest challenge with an employment contract in Germany is understanding the difference between the gross amount and the actual net salary. And this difference can be substantial. On the one hand, you have mandatory social contributions, on the other – income tax and possibly “Soli”. Then there’s the tax class, allowances, marital status. Complicated? Fortunately, there are precise online calculators, which, after entering a few details (gross amount, marital status, federal state, number of children), calculate the exact net amount for you. This is especially useful if you want to get an idea of what salaries in Germany for a specific position look like. Because although it’s generally said that anyone can look at statistics to see what average salaries in Germany are, the real salary depends on many nuances. Better to know them before you make a decision on moving or signing a contract.
Do you want more control over your finances and tax returns in Germany? With the Taxando app you do it stress-free – completely online, in Polish, and without knowledge of German tax law. Filling in the declaration takes a few minutes, and the whole process is transparent and tailored to your situation. Check if you are entitled to a refund and get several thousand euros back – quickly, safely, and conveniently.
Maciej Szewczyk
He gained experience as a consultant on IT projects for many international companies. In 2017, he founded the startup taxando GmbH, where he developed the innovative tax app Taxando, which simplifies the filing of annual tax returns.
Maciej Szewczyk combines technological expertise with in-depth knowledge of tax regulations, making him an expert in his field. In his private life, he is a happy husband and father and lives with his family in Berlin.
