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While other European countries make the transition to cashless societies, Germany still has a stubborn affection for a pocket full of loose change. Rachel Stewart investigates the very specific German attitude to money.

A good salary in Germany is the one that will allow you to afford the lifestyle that you want. Anything above 47.700 euros a year (gross) will place you in Germany’s above-average range of income.

We answer the question “what is a good salary in Germany?”. We tackle the average annual salaries based on different factors and provide an answer to the question: “Will my salary be enough?”

YouTube comments:

“This is a great video with a good breakdown! I moved from a big city and took a paycut on my previous gross salary, but I have been amazed how much I am provided for in Germany and never really felt broke despite technically having much lesser money than before. I think until you live here and really experience the economy and plan your finances, the numbers are just… numbers! End of the day I believe we should be fighting for fair salaries, and not higher ones just for the sake of it.”

“Whenever I read about 40% taxe rate, it makes me a bit frustrated. But looking from the other perspective, all of those high contributors I make are the reason why the life for people all ages so good and reliable in Germany, right? I would like to reveal those details and understand the real value of the contributions I would make :)”

“It’s however important to mention that living in Germany you have access to many amenities and infrastructure not available to you in other countries unless you hire someone yourself or you pay a net price for it.”

What drives employees? There are many answers to the question: Responsibility is one thing, appreciation is another. And money? Not so important. More salary can even be dangerous.

According to the motivational pope Sprenger, money can trigger a flash in the pan motivation. “The half-life is usually no more than 48 hours,” says the management consultant. Happiness researcher Ruckriegel is a little more optimistic: “Once the basic needs are met, it takes about two to three months for the employee’s expectations to adjust and for them to be just as satisfied as they were before the salary increase.”

In the long term, however, there is a risk of dramatic consequences from excessive financial generosity. According to Sprenger, it increases the stimulus and expectation level and can thus trigger a real addiction to rewards. Ruckriegel also warns: “You always have to push more, but at some point the end of the road will be reached.” And the higher the starting salary level, the lower the impact on productivity and the higher the greed. Because then the main thing is to earn as much as possible more than the others.

March 2020. Currently, the country has one of the lowest unemployment rates in Europe, hovering around 3-4%. Having one of the most diversified economies in the world, Germany offers jobs in almost any sector.

Salaries in Germany are also quite high for global standards. The average net salary in Frankfurt is 2700 EUR per month. In Berlin, the average net wage is 2500 EUR per month.

Some economic sectors in Germany have a greater demand for foreign workers than others. Notably, health care and tech are among the sectors with the highest demand for foreigners.

It is said that a salary increase should have little effect on motivation at work. Appreciation and more responsibility are the key. But that’s not entirely true – because salary does play a role in employee satisfaction.

Money alone does not bring happiness – this is the result of countless job studies that have examined how the level of salary affects the motivation of employees. Sometimes experts are looking for the ideal salary that makes people happy. Time examines how salary increases affect employee engagement. The answers that these studies give to the salary questions are similar: salary increases only have a minimal effect that quickly fizzles out over time. If you want to motivate employees or keep them in the company, you should use other means as a boss.

All of this may be true, but it is not the whole truth. “Money does not necessarily generate motivation, but if the payment is not right, demotivation can arise,” says psychology professor Maika Rawolle from the University of Media, Communication and Economics in Berlin to the “Süddeutsche Zeitung”. The unclear expression of “incorrect salary” is very correct, because there are some salary constellations that reduce motivation. Everyone agrees: It’s about injustice, that is, about a comparison.

Do you want to pay your employees a bonus? Beware, this might not be a good idea: Studies show that extra money can hurt employee motivation and job satisfaction.

What is the ideal salary? Even if funds were unlimited, pinpointing the ideal salary would be difficult. The first intuition is: the higher the salary, the better the work results. But studies show that the connection between compensation, motivation and performance is much more complex. In fact, there is some evidence that people would not be happier in their jobs if they had control over their salary.