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TAXES AND WAGES: What Will Change for Workers in Germany in 2023 – Who Can Expect Higher Pay

01/19/2023

TAXES AND WAGES: What Will Change for Workers in Germany in 2023 – Who Can Expect Higher Pay

The labor market has so far been one of the most stable pillars in all crises. For employees in Germany, there will be changes in the new year, primarily in the cost structure.

Social security contributions will increase.

Contributions for basic statutory health insurance are increasing

Anyone insured with a health insurance company should find out whether their own insurer is increasing contributions.

Admittedly, the increase does not seem as dramatic as was feared in October. However, some health insurers are raising contributions by 0.2 percent.

The largest insurer in Bavaria, AOK, is even increasing contributions by 0.28 percentage points. From January, 16.18 percent will be deducted from gross salary instead of 15.9 percent.

The two largest funds in Germany, TK and Barmer, announced that they will keep their contributions stable.

Privately insured persons have a higher income threshold

Anyone who wants to leave mandatory health insurance and be privately insured must earn at least 66,600 euros gross from the new year, or 5,550 euros per month.

This increases the mandatory insurance limit by 3.5 percent compared to the previous year.

Other social security contributions are also rising

Contributions for unemployment insurance will also increase by 0.2 to 2.6 percent.

Finally, pension insurance costs will also rise – here contributions will increase by one tenth of a percentage point to 18.7 percent.

For many, this is nevertheless mitigated by the fact that from 2023 pension contributions will be fully tax-deductible.

In the future, sick leave will automatically go to the employer

Everyone who has a permanent employer will be able to use the electronic AU certificate from the new year.

This means that anyone who has received sick leave from a doctor and is statutorily insured no longer has to worry about whether the employer will receive the red certificate of incapacity for work.

Instead, the employer can obtain essential information directly from the health insurance company.

In the case of privately insured persons, the previous regulation remains in force.

Higher wages, including for nurses

As early as September, employees working as caregivers without their own collective agreement received a pay rise, and in the new year two more wage increases will follow.

The first wage increase will be in May 2023: caregivers will then receive 13.90 euros per hour, qualified caregivers 14.90 euros, and nurses: 17.65 euros.

And the second wage increase comes in December: caregivers will then receive 14.15 euros, qualified caregivers: 15.25 euros, medical staff: 18.25 euros.

In addition, employees in the care system should receive more vacation days. They are entitled to paid leave of at least 29 days – in 2023 and 2024.

In January, the collective agreements of other sectors will also be adjusted: educational staff will then receive an hourly wage of 17.87 euros (previously: 17.18 euros).

Workers in the roofing trade will receive 14.80 euros (previously 14.50 euros) per hour. And in the electrical trade, the minimum hourly wage will then be 13.40 euros instead of the previous 12.90 euros.

During the year, wage increases can be expected by employees in the meat industry, in cash and valuables transport, employees in security services, and at airports.

If you work from home, in the following year you can claim six euros for income-related expenses in your tax return for up to 210 working days from home.

An additional 1,260 euros can be deducted from tax annually. The German government decided this at the end of the year.

The basic income tax allowance is increasing from 10,347 euros to 10,908 euros annually.

Source: index.hr