Optimizing your net take home pay in Germany? Contact our specialists
For this simulation, we have taken a number of assumptions, such as your marital status, the absence of children and many other factors that have an impact on your net monthly salary. These could also be matters such as your age, being a member of church, additional payments and others. Our team is more than happy to investigate all relevant variables of your personal situation to determine whether these could have a positive effect on your net pay.
Moreover, as a contractor it's likely that you'll have significant expenses that we could help recover. These could be travel -, relocation - or other professional costs that increase your net monthly income.
When discussing your personal situation, our specialists can determine which professional expenses could be redeemed. The German taxation authorities take a standard lump-sum (Arbeitnehmer-Pauschbetrag) of € 1.000 into account as income-related expenses that does not require any receipts. However, depending on your situation, there’s other expenses that German Umbrella Company could help to recover for you:
Since 2021, you’re allowed to claim a rebate of €5 per day when working from home, up to a yeary maximum of € 600.
Lump-sum of €0,30 per traveled km up to € 4.500 or all your receipts if this you would exceed € 4.500
Food allowance during business trips for the first 90 days. € 12 for trips > 8hrs - € 24 per day - Higher flexible allowances for international trips
Lump-sum of € 110 without receipts. Immediate coverage for items up to € 487.90, otherwise written-off over a number of years
Lump-sum of € 764 without receipts. Travel-, moving-, brokerage costs as well as a double amount of rent.
Double household costs:
for your second home rental costs, tax on second homes, furniture and fittings, commuting between your first and second home.
professional liability, work accident insurance, legal costs insurance. Private risk insurances are not covered.
What comes next?
The first step is to contact us. You’ll be introduced to your personal account manager at German Umbrella Company who will guide you further with every step in order to get all necessary arrangements clear, adapted to your personal situation and signed.
We’ll start with analyzing your personal situation to make sure we’re able to maximize your financial opportunities. Concerning all your relocation questions, issues and other matters; some of our employees are (former) expats themselves and therefore perfectly capable of recognizing your situation and needs.
Besides having to adapt to another culture, migrants, contractors or expats from abroad are often confronted with language barriers. Also with this matter, our multilingual team can help you out. Or at least direct you in the right way.
Do not hesitate for a brief dialogue to find out how we could help you get going in the best possible way.
From Berlin with love,
German Umbrella Company.
Calculator step 1
German legislation requires employers -German Umbrella Company in your case- to deduct and withhold compulsory premiums for health-, care-, accident-, and unemployment insurance, as well as a premium for general pension. All of these are included in this amount.
German Umbrella Company fee
Since we are member of the BAP*, German Umbrella Company is compliant with sector-specific agreements, tariffs and rates. The BAP classifies each profession into one out of 9 levels, based on qualification level. For the purpose of this pro forma calculation, the highest level is applied (BAP rate 9) as well as a default amount of hours per month. We have also assumed you’ll be working in the former West of Germany. In case these default values do not match your personal situation, the actual fee as well as the social security contributions might vary from the current output.
(*Bundes Arbeitgeberverband der Personaldienstleister – Federal Employers’ Association of Staffing Services)
In one calendar year you’ll build up 25 days of leave per year. The holiday accrual figure is the value of holiday entitlement built up over a specified period of time, that has not been taken as leave (yet).
Calculator step 2
The German tax system classifies all individuals into one out of 6 tax classes, based on marital status, parenthood, the income situation when married or incase of having an additional job. For the purpose of this calculation, we have taken tax class 1 as default. (single, widowed, separated/divorced). In case this would not apply to your personal situation, that will affect the tax rate. German income tax (or ‘Lohnsteuer’) is progressive and lies in between 14-45% of your annual income, where 42% applies to incomes above € 56 K.
This is a mandatory fee in Germany of 5.5% calculated on incomes that exceed € 109.453.
In Germany, all employees and some groups of self-employed individuals need to contribute to the statutory pension insurance (GRV), which is the building block for retirement provision. If you have worked in Germany for more than 60 months and contributed pension insurance, you’re entitled to receive German pension payments at the official pensionable age, even when living abroad. The contribution rate is 18,6% of which both employer and employee carry half. In this calculation, the first half has been deducted in the Employers cost in step 1.
Health care insurance is mandatory in Germany. Up to an annual income of € 62.550 you’ll be covered by the statutory public health insurance (Gesetzliche Krankenversicherung / GKV), which contribution costs are 14.6%, depending on your income, plus a supplemental charge of 0.9-1.3% in most cases. The employer pays half of the contribution, and the employee the other half. In this calculation, the first half has been deducted in the Employers cost in step 1. With an income above the € 64.350
threshold you could decide to purchase additional private insurance as well.
Unemployment insurance is a compulsory insurance for every working individual in Germany. For 2021, the contribution rate is set at 2.4% Half of the contribution is paid by the employer and half by the employee. In this calculation, the first half has been deducted in the Employers cost in step 1.
When your income classifies you for statutory public health insurance, this involves an implied contribution to the statutory long-term care insurance as well. This insurance covers medical costs in case of illness for more than six months. When having children, your contribution will be 3,05% of your income, without children this will be 3,3%. For this calculation, the latter is used as default choice. The employer pays half of the contribution, and the employee the other half. In this calculation, the first half has been deducted in the Employers cost in step 1.