Social Rights and Health Insurance in Germany

In Germany, anyone who works and earns more than 512 Euros per month is considered part of the German social security system. Those included in the social security system are entitled to benefits such as unemployment insurance, health insurance, pension insurance, etc. This applies even to employed students with permanent contracts.

Taxes:

Every month, deductions such as income tax, health insurance, unemployment insurance, long-term care insurance, and pension contributions are made from your gross salary before it is paid to you. These deductions are fixed amounts, and the same deductions apply each month.

In Germany, every individual is assigned to a tax class. The tax system is generally divided into six different classes. If you have multiple jobs, you need to register each job under a separate tax class.

Salaries:

Salaries in Germany are negotiated on a gross monthly basis, and deductions are made to determine the net salary. Deductions from your salary are fixed, meaning the salary you receive in January will be the same in December. However, if your tax class changes, your net salary will also change. Two individuals with the same gross salary but different tax classes will have different net salaries. Even individuals in the same tax class might receive different net salaries due to their family status or seniority.

Salaries in Germany are often quoted annually. The highest-paying profession in Germany is that of medical doctors. In addition to your gross annual salary, you may receive additional payments such as parental allowances, child benefits, child-rearing allowances, family support, disability benefits, and educational support, depending on your personal and family situation. A master’s or doctoral degree may add between 2,000€ to 10,000€ annually to your gross salary, depending on your profession. Some companies also provide a Christmas bonus (Weihnachtsgeld), which is either a one-off salary payment or a holiday allowance close to a full salary.

Leave:

In Germany, there is a minimum number of annual leave days. If you work five days a week, your annual leave must be at least 20 days. If you work six days a week, you are entitled to at least 24 days of annual leave. You can negotiate for more leave with your employer, but legally, the minimum amount cannot be reduced.

You can start using your annual leave from the first day of your employment, and you may use part of it during your probation period. Additionally, you may agree with your employer to take leave in blocks.

Unused leave must be used by March 31st of the following year. Unused leave can be carried over to the next year unless you work under a collective agreement (union contract), in which case different rules may apply.

Sick Leave:

If you are sick, you are allowed to take up to three days off without a doctor’s note, as long as you inform your workplace. For sick leave longer than three days, a doctor’s note is required. In cases of long-term illness, you continue to receive your full salary for the first six weeks of illness.

Maternity Leave:

Maternity leave is legally protected in Germany. The mother can take leave up to six weeks before childbirth. During this period, she may choose to continue working. However, if there are any health risks to the mother or child, she is prohibited from working from the start of pregnancy, and she will still receive a portion of her salary. The law also prohibits the mother from working for eight weeks after childbirth.

Parental Leave:

During maternity leave, the mother or father continues to receive 67% of their regular salary. The minimum parental leave benefit is 300€, and the maximum is 1,800€, which can be received for up to 14 months.

Additionally, fathers are increasingly taking parental leave, which has become more common in Germany.

Termination / Dismissal:

In Germany, you can work either as a permanent employee or as a contractor (temporary worker). If you are a contractor, your employer can dismiss you at any time during the first 18 months of your contract. After this period, your employer is required to offer you a permanent position.

For permanent employees, there is typically a six-month probationary period. During this period, your employer can terminate your contract without providing a reason, and you may also leave without a reason. The notice period for dismissal during this time is usually outlined in your contract. After the first six months, the notice period is generally three months, and in cases of long-term employment (20 years or more), the notice period may extend up to seven months.

German labor laws protect workers’ rights, and employers cannot dismiss employees arbitrarily unless there is serious misconduct. If an employer has more than five employees, they must obtain approval from the Federal Employment Agency (Bundesagentur für Arbeit) before dismissing an employee due to business closures or company downsizing. If there is a works council (Betriebsrat) in the company, the employer must inform the council about the dismissal reasons before proceeding with the termination. If the dismissal is conducted without following these legal procedures, it may be deemed invalid.

Unemployment Benefits and Retirement:

Unemployment insurance is mandatory in Germany. The premium is 3% of your income, with half paid by the employer and half by the employee. To qualify for unemployment benefits, you must have contributed to unemployment insurance for at least 12 months in the last two years. If you are unemployed or working less than 15 hours per week, you may be entitled to unemployment benefits. While receiving unemployment benefits, you must actively search for a job. The German state (Bundesagentur für Arbeit) will offer job opportunities and may refer you to vocational training if no suitable job is found. Depending on your age and the number of months you’ve paid into unemployment insurance, you can receive unemployment benefits for up to 24 months.

To receive a pension in Germany, you must be between 65 and 67 years old and have worked for at least 5 years (60 months). If you have worked for over 35 years and are 63 years old, you may also retire early. However, a 0.3% reduction in your monthly pension is applied if you retire before the age of 65. For women, retiring at 60 with 15 years of work is enough to qualify for a pension, and for men, 40 years of work at the age of 65 will result in full pension eligibility.

Additionally, under recent labor law changes, stay-at-home mothers raising children are now credited with working time for retirement purposes and are eligible for pension benefits.