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Germany Mispaid €5 Million in Overseas Allowances After Contractor Sign Error

Citing legal limits on reclaiming pay, the Foreign Office said it will seek recourse from the contractor after correcting allowance calculations.

Overview

  • A calculation mistake by an external payroll contractor produced positive instead of negative adjustments for cheaper postings, causing about €5 million in excess payments to staff at 71 of 220 foreign posts between July 2025 and June 2026.
  • The error affected diplomats and military personnel, with some Bundeswehr allowances already set to drop going forward by specific amounts such as roughly €150 a month for soldiers in Lithuania.
  • The Auswärtiges Amt confirmed recipients do not have to repay the overpayments because of legal limits on reclaiming past salary adjustments.
  • The ministry is reviewing contractual and legal options to hold the external Dienstleister accountable and is implementing corrected calculation rules to prevent a repeat.
  • The case highlights risks in outsourcing automated pay systems because a single sign or formula error can create multi‑million euro mistakes and disrupt staffing incentives at overseas postings.