Overview
- The two‑step increase is confirmed: €13.90 per hour from Jan. 1, 2026, rising to €14.60 on Jan. 1, 2027.
- About 6.6 million employees are expected to benefit, with strong effects in hospitality, retail and eastern states, and the Minijob limit automatically climbs to €603 per month.
- Restaurants will apply a reduced 7% VAT on meals from Jan. 1, while the commuter allowance rises to €0.38 per kilometre from the first kilometre and child benefit increases to €259 per month.
- The cabinet has adopted higher social‑insurance ceilings for 2026—€5,812.50 per month for health and long‑term care and €8,450 for pension and unemployment—pending Bundesrat approval, raising deductions for higher earners.
- Business surveys report many firms plan price increases, investment cuts or job reductions in response to higher labor costs, and insurers signal a slightly higher average health‑fund surcharge than the government’s baseline.