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Benefits (Germany)

Benefits (Germany) in Germany

Mandatory Employee Benefits in Germany

The welfare system in Germany covers a range of basic social security benefits. It is compulsory that employers insure every employee. Contributions are split evenly between employer and employee. Social insurance consists of:

  • Pension Fund
  • National Health Insurance
  • Unemployment Funds
  • Long-Term Care
  • Accident Insurance*

*Only employers contribute to it.

Non-Mandatory Employee Benefits in Germany

Most common non-mandatory benefits in Germany.

Christmas bonus or 13th-month bonus

Although German compensation laws do not require a 13th-month bonus, many employers choose to give employees an extra month's wage at the end of the year.

However, under certain collective agreements, employees who have worked all 12 months of the year may be entitled to receive a month's salary as a year-end bonus (or a pro-rated amount for less than a year's work). Many German employers also grant vacation bonus.

Annual leave

Although the statutory minimum leave is 20 days in a 5-day-week, it is common to grant 25-30 days of annual leave to full-time employees.

Home office days

Many companies offer employees the option to work from home at least once a week.

Flexible working hours

During the summer, some companies allow employees to use flexible hours to make the most of the weather.

Telephone costs

Depending on the nature of the job, some companies cover phone bills.

Housing & child subsidy

Some companies offer employees help with rent and child costs related to raising children, including transportation and meals.

Life insurance

Some companies offer employer-paid supplemental life insurance, which covers up to five salaries, depending on the accident type.

Company pension scheme

There are different kinds of company pension schemes. They can be financed by the employee or the employer or a combination of both. Each employee is entitled to convert a part of his gross salary into a pension scheme (Entgeltumwandlung). If the employer saves social contribution due to this salary conversion, they contribute 15% of the gross amount. Apart from this salary conversion, employers can also offer a company pension scheme which is wholly or partially financed by the employer.

Saving plans (VML)

Mostly common for enterprise organizations. The maximum amount is €40 per month.

Travel insurance

Some tech companies offer travel insurance as a perk.

Pass subsidy

Some companies offer a free pass or partially pay for employee's public transport to and from work.

Gym membership

Some companies offer free gym membership as a benefit to employees.

How benefits work in Germany

This page was last updated on 
05 April, 2022,
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