Currency and foreign exchange

The German housing market is difficult in certain locations given the limited supply of housing. Prices for the purchase and rental of property remain relatively high, especially in urban areas.  The average cost of an apartment may vary between 4€ and 18€ per square meter.

It is possible to arrange for housing on your own through resources available to the public. A lot of information can be obtained from various websites.  Frequently used website are:

• Immobilien Scout 24
• ImmoWelt
• Wohnungs Boerse
• Meine Stadt - Wohnungen
• Ebay - Wohnung Mieten

You can also use the services of a real estate or relocation agency to help review your housing alternatives. The biggest benefit of using an agent is the fact that agents often have access to properties before they are listed on the open market. The agent can also assist in prioritising your rental application above other applications; although the final decision is always made by the landlord (there is no requirement for the landlord to accept the first application for rental property).

When determining the overall cost of the rental property, you should consider whether any charges are included in the monthly rent, such as utilities, cable television, etc. Please note that it is standard for landlords to request a deposit of up to three months’ rent.

The German education system is mainly the responsibility of the Länder (overall 18 counties), meaning that the systems may vary from county to county.

Child Care

After a child is 6 months old, they may be taken into day-care by a “Kindertagesstätte” or “KiTa” (child care institution).  Depending on age, three types are differentiated:

• “Kinderkrippe” is early child care for children aged six months old and up to three years old
• “Kindergarten” is for children 3 years of age up until the start of the first school year
• “Hort” is childcare for children primary schools (usually aged 6 and up), outside of school hours

By law, parents have the right to be provided public funded childcare for all children above the age of 1 years old for at least half days. Formally, Kinderkrippen are not part of the educational system but an element of social care.

The cost vary significantly between counties and cities ranging from nearly free to over 800€ each month per child.

Pre-School/Kindergarten

Kindergarten in Germany starts at the age of three.  Children have a right to go to a Kindergarten but no obligation.  It is a general right and not linked to a specific Kindergarten (e.g. close to your living). Some Kindergartens have long waiting lists; so, some parents put their children on such waiting lists right after birth.

Over 90% of the children between age 3 and 5 go to a Kindergarten.  The last year before entering the school consists of a specific pre-schooling program.

Schooling

Children living in Germany are required to attend a school.  Normally, the obligation starts at the age of 6 (with a variation between the ages of 5 and 7) and lasts for 12 school years. When registering in a city, you may inquire about the available schools. German language skills are required at public schools in Germany.

Full time schooling lasts for around 9 to 10 years.  It consists of a primary school (“Grundschule”) and a secondary school (“weiterführende Schule: Haupt-, Real-, Gesamtschule oder Gymnasium”).

You may choose between public and private schools:

• Public schools are funded through tax revenue, so there are no additional fees for schooling at public schools. The public education system in Germany has a reputation for high quality.  95% of all pupils attend public schools.
• There is variety of private schools available in Germany. The more prominent ones are
  • International schools
  • Montessori schools
  • Waldorf Schools
  • Internate (schooling combined with housing)

After the full time schooling period of 10 years, pupils are required to continue their education until they have at least 12 years in total.

Further education and studying

It is after the compulsory full-time schooling when the system really becomes flexible to suit the people individual needs.  Depending on their career plans, they may choose a vocational education (apprenticeships), attend a University of Applied Science or complete a University education. Many people start with an vocational education and continue studying afterwards. There are combinations between working and studying (“Duales Studium”).

For more information, please refer to the information of the German Ministry for Education and Research (BMBF)

Germany is a social market economy.  Due to the influence of social democrats, employment related laws often favor employees.  Today, employees are highly protected by different employment laws;  employers are obliged to look after their employees and pay for many different insurances and risks.  On both sides, unlawful withdrawal from or misuse of the social security system is imposed by severe punishment.

Many companies are bound to Collective Bargaining Agreements (CBAs, “Tarifverträge”).  In the pharmaceutical Industry, the most relevant one is the one from the IG BCE Union.  In the MedTech industry, you will also find the IG Metall Union.  At CTC, all our contractors are bound to the CBA of DGB IGZ (Collective Wage Agreement) with regards to their compensation.

Only counting the most relevant employment laws in Germany, we end up with a list of 15 different laws!

Allgemeines Gleichbehandlungsgesetz (AGG)

The General Equal Treatment Act (AGG), colloquially also anti-discrimination law, is intended to prevent and eliminate unjustified discrimination on grounds of race, ethnic origin, sex, religion, belief, disability, age or sexual identity.

Altersteilzeitgesetz (AltTZG)

The Old Age Part-Time Act (AltTZG) regulates, among other things, eligibility requirements, benefits, obligations to cooperate or the elegibility of the part-time working time.

Arbeitnehmerüberlassungsgesetz (AÜG)

The Staff Leasing Law (AÜG) regulates the contracting of employees, the commercial staff leasing as temporary workers.  Staff Leasing is restricted to 18 months with the same client.

Arbeitsschutzgesetz (ArbSchG)

The Occupational Safety and Health Act (ArbSchG), regulates, the obligations of the employer wrt. occupational health precaution, the obligations and rights of employees concerning safety and health at work.

Arbeitszeitgesetz (ArbZG)

The Working Time Act (ArbZG) regulates, working hours and non-working hours on the working day, e.g. on Sundays and public holidays, rest periods, night and shift work, or Sunday and public holiday employment or special provisions for the public service, aviation and inland waterway transport or for employment in road transport.

Berufsbildungsgesetz (BBiG)

The Vocational Training Act (BBiG) regulates vocational training preparation, vocational training, continuing vocational training and vocational retraining. In this context, the obligations of trainees and trainees, entitlement to remuneration and dismissal, include requirements for testing or vocational training for disabled people.

Betriebsverfassungsgesetz (BetrVG)

The Works Constitution Act (BetrVG) regulates, among other things, the composition and election of the works council, the term of office of the works council, the representation of young people and trainees, participation, participation and right of complaint of employees or the design of the workplace, work process and working environment.

Bürgerliches Gesetzbuch (BGB) – Arbeitsrecht

Sections 611 ff of the German Civil Code (BGB) govern labour law such as dismissal, notice periods  or the issuing of a work certificate.

The general notice period is 4 weeks to the 15^th or end of a month (BGB §622a).  However, there are shorter notice periods for the probationary period in the IGZ and longer notice periods for all people with a length of employment of 2 years or longer.

Bundesurlaubsgesetz (BUrlG)

The Federal Leave Act (BUrlG) or the Minimum Leave Act for employees regulates, among other things, the duration, time, transferability or compensation of leave, leave entitlements during an illness or in relation to measures of medical care or rehabilitation.

Entgeltfortzahlungsgesetz (EntgFG)

The Compensation Continuation Act (EntgFG) regulates the payment of remuneration on public holidays and in the event of illness, in the case of medical prevention and rehabilitation measures or in the area of housework.

Kündigungsschutzgesetz (KSchG)

The Dismissal Protection Act (KSchG) regulates, among other things, grounds for dismissal such as personal dismissal, behavioral termination, company-related termination, time limit for legal action or notice of amendment.

Mutterschutzgesetz (MuSchG)

The Maternity Protection Act (MuSchG) regulates, among other things, employment bans for expectant mothers, e.g. childbirth, breastfeeding, overtime, night and Sunday work, as well as maternity and maternity or maternity leave benefits.

Nachweisgesetz (NachwG)

The Law on Proof of Proof (NachwG), the Law on proof of the essential conditions applicable to an employment relationship, regulates the obligation of employers to record the essential contractual conditions of an employment contract, to sign the minutes and to hand it over to the employee.

Tarifvertragsgesetz (TVG)

The Collective Bargaining Act (TVG) regulates the content and form of collective agreements.

Teilzeit- und Befristungsgesetz (TzBfG)

The Part-Time and Temporary Employment Act (TzBfG) regulates part-time and fixed-term employment contracts.

The fundamental idea behind the social security system is that all essential risks are equally shared with employers and employees.

The key components of the German social security system that are equally financed by employer and employee are:

• Old age insurance (“Rentenversicherung”)
• Unemployment insurance (“Arbeitslosenversicherung”)
• Health and nursing care insurance (“Kranken- und Pflegeversicherung”)

The key components of the German social security system that are solely financed by the employers are:

• Accident insurance (“Gesetzliche Unfallversicherung”)
• Invalidity insurance (“Umlage Arbeitsunfähigkeit (U1)“)
• Maternity contribution („Umlage Mutterschaftsleistungen (U2)“)
• Insolvency contribution („Insolvenzgeldumlage (U3)“)

The social security charges are determined annually by a federal authority.  On the one hand, it consists of a percentage of the salary and the on the other hand, it only applies to the salary up to a certain threshold.

More information on Social Security

Roughly, one can estimate that the average social security deduction from your monthly salary is around 20% for those earning up to 80k€ per year. The obligation to pay the social security charges lies with the employer.  So the costs will be clearly deducted by your employer from your monthly salary and paid to the authorities.

Health insurance is mandatory in Germany. Approximately 86 percent of the population is en-rolled in statutory health insurance, which provides inpatient, outpatient, mental health, and prescription drug coverage. Administration is handled by nongovernmental insurers known as sickness funds. Government has virtually no role in the direct delivery of health care. Sickness funds are financed through general wage contributions (14.6%) and a dedicated, supplementary contribution (1% of wages, on average), both shared by employers and workers. Copayments apply to inpatient services and drugs, and sickness funds offer a range of deductibles. Germans earning more than $68,000 can opt out of SHI and choose private health insurance instead. There are no government subsidies for private insurance.

Learn more about Health Insurance

In Germany, every employment compensation is generally subject to income tax (“Lohn- oder Einkommenssteuer”).  A basic allowance applies to all citizens in Germany. Up to this amount, no taxes will be charged on your taxable income. In 2021, this allowance is be EUR 9,744  for unmarried people. For married couples and partners the allowance is  EUR 19,488. If the taxable income is higher than the above amounts, you pay income tax. Rates range from 14 to 42 percent. Income tax is deducted from your monthly salary by your employer and paid to the tax office.  At the end of the year, you will then have the opportunity to hand in a tax income declaration to make adjustments.

Calculate your Income Tax