Last few days, I was thinking to share how I feel about working in germany. If I really want to say something about working and living in Germany then the first thing will appear to mind is Work–life balance. I don’t think there is any better work-life balancing around the world. I rather go step by step.
Holidays and Paid leave
In germany there are 9-13 public holidays varies state to state, 20 working days paid vacation by low and some companies provide additional vacation upto 10 working days. These holidays must be taken. If you don’t want to use the rest of the days (from paid vacation) current year then you must book them by December current year to use next year.
Sick leave is still open. Upto 3 (varies company to company) days sick leave, management needs to be informed and more than the threshold it’s needed to send arbeitsunfähig (unable to work) from your GP or any doctor. There are tons about sick pay you can look at http://bit.ly/1nOVvkm
Paid (100% of current salary) maternity leave 14 weeks (6 before birth). Paid (65% of current salary not more than €1800 ) paternity leave 12/14 months (One of father and mother can take maximum 12 months and another has to take 2 months, 14 months only for single mother/father). Unpaid maternity or paternity leave is until child turns 3.
Health Insurance(15.5% of gross salary)
You pay minimum of 8.2%(of gross salary) and €332.10, Company pays the rest. Its is also required to keep public health insurance until your salary €4050 and after that you can go private (but this is not wise as it increase over age and it does not cover everything).
Public health insurance ( like AOK, TK) covers almost everything 100% including dental also most kind of medicines except few but it’s only €5(upto it cost €50) to €10 (if it cost more than €100) one has to pay if the medicine is not covered by health insurance. Of course it covers your spouse and children too if living with you.
You pay minimum(1.5% , €89.25) and company pays the rest. It is required to pay Unemployment Insurance.
There are two types of unemployment benefits in Germany. Unemployment insurance (UI) and unemployment assistance (UA). In order to get UI paid, you must work at least 12 months prior applying for it. You can get 67% of your last salary upto 12 months. There is no time-limit for UA benefit receipt and the formal replacement rates of UA are somewhat lower than those of UI benefit. Find more at http://bit.ly/1sVc0Sc
You pay minimum(9.45%, €562.28) and company pays the rest. This amount is required to pay unless you work for an international company and that company transfers you to Germany for less than 5 years. This is called a “detached worker”.
If you work in Germany for less than 5 years then you can get back the total amount(not company amount) you put into the system, 2 years after leaving germany. State pension benefits are paid out on retirement. This begins at age 67 or 43 years working for both males and females. You must have contributed into the system for at least 5 years in order to qualify for benefits. The benefits paid out are about 70% of the average net income you earned whilst working. The exact amount paid out depends on how much you put in and for how long. There are numerous other factors as well.
Disability Insurance/Nursing care Insurance(2.2%)
You pay minimum(1.2%, €51.64) and company pays the rest. This is something when you get disabled to work (you become blind working as a software Engineer) Company will pay 12 months and then insurance.
You pay nothing for it. Only company pays for it. If you got accident on the way to work or at work, all the cost (that does not covered by health insurance) will be paid by this insurance.
So the largest sum of the required Social Security Contributions is €1035. If you earn gross salary €5950 a month or more, then your Social Security Contributions will not be increasing anymore.
For 2013 a taxable income of less than €8,130 is tax-free for a single person (€16,260 for a married, both live in Germany). Incomes up to €52,881 for a single person (€105,762 for a couple both live in Germany) are then taxed with a rate progressively increasing from 14% to 42%. Incomes from €52,882 (€105,764) up to €250,730 (€501,460) are taxed at 42%. Amounts over those are taxed at 45%. In addition to this there is the “solidarity surcharge” of 5.5% of the tax, to cover the costs of integrating the states of the former East Germany.
Jobs in Germany are more secure by trend then in most other countries. As soon as probation has been passed, dismissals with immediate effect are not allowed without major reasons and/or prior warning. Additionally with every year of being employed in a firm, cancellation periods are extended gradually. Probation period is usually between 6 months and a maximum of two years. During probation period, both contractors are allowed to terminate the employment immediately. At least in most of larger companies, workers councils are established, which support employees with information and try to agree positive terms for all employees. Even if employer found a way to terminate, they need to pay (100%) three months afterward, then the employee can get the advantage of Unemployment Insurance in order to get paid 67% of the last salary until they got next job or one year (varies depending on duration of work and age).
This is an important topic to know in details while working in germany. In most case people get huge tax return every year in germany. In order to maximize your return you should keep the proofs for tax deduction and that is why you should know about it. There are two ways of getting tax return.
- Changing tax class
- Declaring tax deduction
Changing tax class
Changing tax class assures huge tax return. While are you working with tax class 1 (Single) you have to pay higher amount of tax. If you change the tax class to 3 (you got married in germany or your spouse came to live with you as a resident) in a calendar year then you will get back all the amount you paid more for that calendar year.
Declaring tax deduction
There are lot of costs you can declare as tax deduction including the following
- You have worked only few months in germany.
- You have provided financial support to your needy dependents (Parents).
- You have paid home rent in Germany and homecountry.
- You visited home country to meet your family, paid flight tickets.
- You have kids and there are expenses for education, Kindergarten etc.
There are tons on internet you can have a look. I am just giving an overview of few things. I wish I could know all these ahead of time.
-Mohidul Islam, August 13, 2014