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Germany’s Minimum Wage Rises Jan. 1 as Net Pay Gains Confront Higher Social Charges

Cabinet‑approved higher contribution ceilings for 2026 will absorb part of the increase for many employees.

Overview

  • Hourly floor increases to €13.90 on 1 January 2026 and to €14.60 in January 2027 under the Minimum Wage Commission’s two‑step decision.
  • Roughly 6.6 million workers stand to benefit, with women, hospitality and eastern states disproportionately affected, according to official and union estimates.
  • The minijob earnings cap, legally linked to the wage floor, rises to €603 per month from 1 January 2026.
  • The cabinet backed 2026 assessment‑ceiling hikes to €5,812.50 per month for health and long‑term care and €8,450 for pension and unemployment insurance, lifting monthly deductions for higher earners (for example, +€37.20 pension and +€5.20 unemployment at €8,450; higher health and care contributions above €5,512.50).
  • Payroll analyses indicate small or even negative net changes for some lower and middle earners as social contributions rise, while employer surveys report planned job cuts and price increases in exposed sectors such as hospitality and retail.