Germany: Pay and benefits

Updating author: Sonja Riedemann and Konstantin Axnick, Osborne Clarke, Germany

Original author: Karen Ullmann

See the legal services provided by the updating author of International > Germany, including any discounts/offers for subscribers.

Summary

• Pay rates may be set by collective bargaining agreements or the individual employment contract. (See Pay - general)
• Wages must be paid monthly unless provided otherwise, and must be accompanied by a written statement. (See Payment of wages)
• Save for certain exceptions, employers may not make deductions from wages. (See Deductions)
• Male and female employees must receive equal pay for "like work". (See Equal pay)
• A national minimum wage is set by statute, and sectoral minimum wage rates can also be set by collective bargaining agreements that are declared generally applicable, as well as statutory regulation. (See Minimum wages)
• All employees must be insured under the compulsory state pension scheme if their monthly income exceeds a specified minimum, and all employees are entitled to demand that their employer pays a proportion of their wages into an occupational pension scheme. (See Pensions)
• Employers are obliged to make social insurance contributions and to deduct employees' contributions and income tax from their pay. (See Income tax and social security)
• There are various rules regarding pay for employees absent from work due to sickness. (See Sick pay)
• Employees may receive various bonuses. (See Bonuses)
• In addition to regular pay, some employers offer a variety of non-cash benefits in kind. (See Benefits in kind)