How much you will earn as a software developer in Germany

By Jörg Kleis

“How much money am I going to make when I get my job in Tech & IT in Germany?” That’s not just a frequently asked, but complex question. You need to know several things to get a clear understanding on how much you’re actually going to end up having in your bank account when you start working in Germany as a software developer, data scientist or automation software tester.

First off: Germany is a welfare state

At some point in time, you’ll be asked about your salary expectations. This can already be when you’re filling out the company’s online application form or when they ask you during the first call, which in the case of software engineers usually precedes the coding challenge. That means you’ll need an answer! But, how much is adequate? And is adequate going to be enough?

First, and this is what I always say in my webinar, when finding your job in Germany you are about to move to a (social) welfare state. Because that’s what the German economic system is about - a safety net that catches you in case general life risks and challenges kick you in your behind. What does that mean? It means by starting your job in Germany you are also actively shifting over to a different system. So, if you aren’t from Europe where most systems work similarly to the German one, but say from India, it is important you understand how that system works.

Any income is before taxes and social security

Rule #1: Say you get an offer stating 56.000 EUR then that will be your gross annual income. Gross (German: “Brutto”) again means it’s before taxes and social security. In a nutshell, taxes and costs for your social security are automatically deducted from your monthly pay and go into what? That’s right! Your safety net, which means they are for

  • your income tax (20-40% depending on your wage) and
  • your social security, that covers your
  1. Healthcare (entirely) including healthcare for your husband/wife/kids
  2. Pension fund (you can always top up through private retirement plans)
  3. Unemployment insurance (after having paid into this fund for 12 months you’re entitled to 60% of your former income for 12 months in case you lose your job)
  4. Accident insurance (for when you have an accident at work or on your way to work)
  5. Nursing care (for when you get old or sick and need professional care)

The rest is your net (German: “Netto”) income and goes from your employer directly into your bank account and is yours to spend or save. An appropriate measure here is that you can use around ⅓ of your net income for your apartment. If you and your spouse both have a job then that will obviously mean a larger apartment. In general your net salary is about 35-40% less than your brutto salary.

Here’s what a German paycheck (“Lohnabrechnung” / “Abrechnung der Brutto/Netto-Bezüge”” looks like.

You got a job offer, or a figure in mind? Do the math yourself!

If you got a job offer or you’re asked during the interview, you can also go ahead and use this online Gross-Net-Income Calculator. It’s in German, but you’ll get the hang of it. As a single you are taxation class 1, probably not a member of the Church and you can choose from the 16 Federal States (Bundesland) by googling your future hometown.

Even if your deductions look like a lot to you, living in a social welfare state isn’t too bad. You are married? Your spouse’s healthcare will be automatically covered (Familienversicherung). Same applies to your kids. Speaking of kids. You have or are planning to have a child in the future? Kindergarten and schools are pretty much free. You are sick and have to go to the doctor? It won’t cost you extra. Any surgeries? In principle, no extra expenses here either. And, on top of that, Germany does have one of the best healthcare systems in the world.

You have no idea what you should ask for?

How much can you expect as a software developer? There are two sides to a professional answer: Here’s what Honeypot’s Developer Salaries Report 2021 says:

Please, keep in mind these are A-VER-AGE numbers. Average meaning values representing a middle point. Neither does it mean that you as a software engineer can’t make more, nor that you should ask for more. Got it? Because how far the spread is, can or will depend on the following:

  1. The size and type of the company you’ll be working for. Is it a startup, an SME, a multinational corporation? A general rule of thumb here for you is that multinationals pay best followed by SMEs and then startups. But, access to larger companies can be much harder. Please, keep in mind that the respective (established or rising) industry plays a big role in all this as well.
  2. The place where you’re going to be working - and most likely living. Like elsewhere, cities come with different price tags in Germany. Cost of living can vary. In general, the more urban it gets, the more expensive. But that’s not uncommon, is it? In general salaries in the South and in bigger cities like Frankfurt, Munich and Hamburg are better than in the rest of the country. Over the last years Berlin has really caught up in that department. Salaries used to be much lower, but have increased steadily. On the other hand, housing and rents for apartments are equally expensive in the mentioned cities. Here’s some statistics on the average price per square meter you’ll be looking at when renting a place. However, please take note that all German cities have good access to the city center to commute to from outside either via public transportation or car. We’ve seen quite a lot of clients settle in the outskirts because quality of living is equally good and commuting didn’t take too long (30-40 minutes).
  3. You! Despite the mentioned factors, the question of how much you are able to ask for will largely depend on you; that means your knowledge, skills and project experience as well as the demand of the stack you’ll be using (Go / GoLang vs. Java vs. Javascript). All in all, as you’ve probably already imagined, the stronger the better.
Average rental price per square meter in different German cities.

Oh, and one more thing. Germany uses EUR, not USD. We are just raising the issue since one of our clients from Pakistan who landed his job in Germany with our help made that little mistake in his application where he asked for 60.000 USD (50.000 EUR). Next time!

What else is there in terms of expenses?

So, let’s just pretend you get 60k per year (in EUR!), of which you’ll be receiving approx. 3k net per month into your bank account. Then you can get yourself a 60m² apartment for roughly 1.000 EUR (which will already be a nice place), and you’ll be left with 2k per month to spend.

However, from those 2.000 EUR you’ll have to cover the following extras that cost around 100 EUR per month in total: Your cell phone contract (20 EUR), Internet and electricity at your place (30+30=60 EUR), public radio and TV “GEZ” (18 EUR). Don’t ask why you have to pay those 18 EUR for GEZ, it’s a long story.

And last, your salary is only part of the whole package

We know that most of you (understandably) care about the salary part. However, and this is a common misunderstanding, your salary is and remains only one element of several that decide whether the package they’re offering you can be considered a good deal altogether. So, what is a good deal?

First, be aware that companies offer benefits alongside your salary. They are not just doing that to lure you into the job. They’re also doing it because they can deduct the costs for such benefits from their income to save taxes. Remember that besides your salary your employer already pays half of your expenses for your social security. So, the higher your salary demands, the higher social security expenses for your employer get as well. It’s far more attractive for them to offer you benefits if you are looking for a top up of some sort!

So, look out and ask for benefits or perks like these: Public transportation ticket, free access to a local gym or sports club, lunch tickets, maybe even a company car, remuneration of costs for your visa or relocation expenses, and much more.

On top of that, please remember it’s the 20s of the 21st century. So, work isn’t everything. Yes, getting the job done is important. But, only a healthy work environment will keep you healthy. It’s as easy as that. Cut-throat cultures with bad leadership will break you, believe me. Make sure the company culture is appealing to you, personal development opportunities play a vital role, investing in staff and management training is done on a regular basis, a clear career plan is laid out to you and make sure you get a good deal on your leave days (24 or more). If you ask me, this last paragraph is what I’d especially be looking for in an employer.

I hope this helped. If so, reach out via LinkedIn. If you’re interested in learning more about how can help you find your job as a software developer, Data Scientist or Tester you are invited to book your seat for my next webinar.