How to negotiate your salary in Germany: A guide for expats
Has a prospective employer in Germany asked you about your salary expectations? Or are you renegotiating your salary as part of your annual review or following a promotion? LeX-Wealth shares some top tips so you can feel confident going into the salary negotiation process.
Whether you’re starting your first job in Germany or steadily climbing the career ladder, you may be wondering how to negotiate for a higher salary. While advocating for the salary you deserve is an important skill, the process can be intimidating. This may be especially true for expats, who might not feel comfortable asking for a raise in a German company.
The good news is that salary negotiations are an important - and expected - aspect of the labour market in Germany. The process allows employees to negotiate for competitive pay based on their skills or past performance, but it also benefits employers by giving them an extra means to attract and retain top talent.
In this guide, we’ll review everything you need to know before negotiating a higher salary in Germany, from when to start negotiations to how much you can realistically ask for. We’ll also go over a few other factors you might want to consider when it comes to your compensation.
Are German employers open to negotiating salary?
Thanks to its thriving economy and worker-friendly labour market, you can earn a great living in Germany while maintaining a solid work-life balance. Better yet, you don’t have to simply accept the first salary numbers you’re given. It’s common practice to negotiate your salary at German companies, whether you’re just starting out or advocating for a raise after a year of employment.
Salaries in Germany depend on a few different factors. For starters, there’s your education, including where you studied, your degrees, and any relevant professional courses you’ve completed. Then there’s your experience and skills, which can greatly impact how much money you can ask for.
It’s worth noting that your ability to negotiate may also depend on the type of company you’re dealing with. Non-governmental organisations (NGOs) and startups may have less money to offer than larger corporations. Of course, money isn’t everything; you may feel prepared to accept a lower salary to work at a company that shares your vision or values.
When should you negotiate a higher salary?
There are several stages in your career where the opportunity opens up to negotiate your salary.
Negotiating at the interview stage
Many companies will ask you to clarify your salary expectations during the interview process.
This offers you an advantage, because you can set the baseline of your negotiations early. It also lets you suss out whether the company is prepared to offer the salary you think you deserve. If not, you don’t need to go any further in the process.
Most HR departments align with organisational managers on a salary range they’re prepared to offer for a given role. The better you position yourself from the outset, the higher your chances of entering the company at the top of that salary range.
Given this, the first step in preparing for your interview is to research the average salary for your future role. This helps you assess where you might realistically fall on the pay scale. Depending on your experience, it may be possible to not only negotiate a higher salary, but to enter the company in a more senior role.
It’s also wise to get clarity from a potential employer on what they expect to pay for the role before you offer up a number of your own. Your ideal salary may well be lower than what the employer expected to pay, meaning you might be in for a pleasant surprise if you let them take the lead.
Negotiating after a formal job offer
So, you’ve received a formal job offer, along with a starting salary proposal. Congratulations! But your work isn’t over yet. Before accepting the offer, you may have the opportunity to negotiate for a higher salary than what’s been proposed.
The advantage here is that you already know you’re the person they want for the job. You also have a rough idea of what they’re willing to pay.
This gives you leverage to negotiate up from the initial offer, or discuss other aspects of the role that might make it more advantageous for you, such as vacation days, perks, or equity in the company.
Negotiating for a raise or promotion
Once you’ve passed your probation period and worked at your company for six months or more, you can consider negotiating for a raise or promotion.
Here, you’re in a great position. You’ve already got the job and know the ropes, have a list of achievements to show, and have had a chance to prove your value to the company. Quality team members are a valuable asset to any company, and employee turnover is expensive, so your boss has every reason to take your request seriously.
Make a list showcasing your career experience, the skills you’ve acquired in your role, and any specific successes you can point to. Then, set up a meeting with your manager or carve out some time at your performance review to broach the topic.
Whether you’re asking for a raise or a promotion, present your case coherently and confidently. In the best case, you’ll get everything you want. But even if you don’t, you can feel proud that you advocated for yourself, and your manager will likely respect you for doing so. This will put you in a good position for your next negotiation.
5 tips for negotiating a higher salary in Germany
Now that we’ve gone through the different scenarios where you might need to negotiate for more money, let’s look at some tips for how to ace the process.
1. Research salary ranges for your profession and role
Before you hit the negotiating table, get a handle on what your salary expectations should be based on your position, role, and skill level. Some industries pay higher salaries, just as certain types of roles and titles do. The area you live in and the type of organisation you’re applying at can also influence your target salary.
So, spend some time researching salary ranges so that you don’t go in asking for too much - or too little.
2. Consider your take-home pay and cost of living
Whether you’re starting a new job or angling for a raise, think about what you need to earn to feel comfortable.
Due to relatively high social costs in Germany, “Brutto” pay (gross income) is significantly higher than “Netto” pay (net income). You can use a German wage tax calculator to see what you’ll take home after insurance and taxes.
Once you have this figure, calculate your living expenses and what you’d like to save each month. This, together with your research about average salary ranges, will give you a good sense of what you should ask for.
3. Don’t accept the first offer
Your (future) manager and HR department will likely have a salary range that they’ve predetermined for the role. As long as you stay within the rough parameters of that range, you almost always have some wiggle room.
So, when you get the first offer, don’t accept it right away. See if you can sweeten the deal a bit, whether that means getting more money or securing better benefits. Your future self will be glad you did.
4. Stay within a reasonable range of your stated expectations
Negotiations are, by nature, a process of give and take. The company you’re dealing with might not get everything they want, and you might not either. That’s okay! If you accept this before entering your salary negotiations, you’ll get further faster.
Remember: even if you don’t get the full package you want, you might be able to negotiate for it later, once your employer has had a chance to see you in action. Or, the company may present an opportunity so exciting that you’re willing to forgo some extra salary per year to be part of their mission.
5. Consider using private health insurance as a negotiating tactic
Did you know that if you’re negotiating a higher-end salary (say, 68.000 euros or higher), you may be able to use private health insurance coverage as leverage in your salary negotiations?
Private health insurance packages can save employers on average 2.000 euros per annum compared to public insurance. These savings can more than offset a salary increase, and should thus be a tactic to consider at the negotiating table. Not only will you benefit from a higher salary, you stand to save several thousand euros per year on your own health insurance premiums - a win for everyone involved.
When you can’t (or shouldn’t) negotiate salary in Germany
As you can see, there are plenty of situations in which you can - and should - negotiate for a higher salary. But there are also some occasions when it’s not a good idea:
When you can’t articulate why you deserve a higher salary
This may feel like a no-brainer, but if you can’t really explain why you should be paid more, then it’s probably better not to ask. We’d all like to earn more money, but companies want to hear clear, actionable reasons why they should allocate more of their budget toward keeping you in their employ.
If you can’t articulate a clear case in your own favour, or if you don’t have any significant successes to point to, then it’s better to wait until you’re feeling confident and ready to advocate for yourself.
When your company has restrictions around salary negotiations
While most companies are open to salary negotiations, some have restrictions that can’t be changed.
Government workers or civil servants in Germany are paid on a tiered system. Teachers or nurses, for example, all have the same starting salary, which increases over time.
Workers in companies with strong unions may not be able to negotiate their salary - but that may be a good trade-off for other salary protections. Or, your company may have a non-traditional structure, like a flat hierarchy, in which salaries are more or less equal across the board, making negotiations a moot point.
When your expectations are misaligned with the role
Let’s face it: when it comes to salary negotiations, you’re going to have to be a bit humble. You might know that you’re the bee’s knees, and want all the glory and compensation implicit in that knowledge. But you’ll have to tether your expectations to reality when it comes to your role.
Knowing what you’re worth doesn’t mean you need to be unrealistic about what you can conceivably earn in your role. In other words, don’t shoot for the moon (unless you’re interviewing to be an astronaut, of course).
Negotiating other aspects of compensation
We’ve been going on about salaries, but life’s not all about money, right? Even when it comes to salary negotiations, there are plenty of other types of compensation you can ask for that may be worth even more than money. Let’s take a look:
Holidays and time off
Although paid time off is generally pretty standard in Germany, some companies in Germany may be willing to negotiate holidays or extra time off. If getting paid to not work is infinitely more valuable to you than getting more money overall, this might be something to ask for.
Training, perks, and other benefits
From gym memberships to company discounts to training opportunities, there are plenty of perks you can bargain for when negotiating with your manager.
Professional development courses cost money, and while you may not be getting the benefit in monetary terms, these types of training courses will set you up for success later on. And for your work-life balance, anything from fitness classes to in-house therapy can enrich your professional and personal life in ways that money can’t buy.
Remote vs. in-office work
Over the last few years, many companies have completely overhauled their approach to working from home. Especially if you have kids or other care obligations, negotiating remote work may be a great way to feel good about your overall package. In fact, some of us may be willing to forgo a higher salary if it means not having to think about a tedious commute - or foregoing that lunch-hour run.
Whether you’re planning to negotiate a higher salary or have already secured higher pay, LeX-Wealth is here to help you put your extra money to work. Their English-speaking experts know how tough it can be to find pension and savings products suited to expats. That’s why they work with you closely to understand your needs and objectives, and offer tailor-made solutions to fit your needs. Contact them today and start building the future you want for yourself.