Germany: Expected salary limitations not implemented

The Federal Employment Agency has decided not to implement a rule that would have excluded non-cash benefits such as housing, cars and meals provided by the employer and travel expenses, among other allowances, from the calculation of the minimum salary when comparing the foreign national’s salary with a local salary.

Payments Eligible for Minimum Salary Calculation

Employers can include the following types of payment in the minimum salary calculation when comparing the foreign national’s salary with a local salary:

  • Actual take-home salary;
  • Allowances without conditions paid directly to the assignee for the entire duration of the assignment; and
  • Per diem allowances paid to reach the minimum salary, if paid as a lump sump.

Allowances (such as housing and transportation costs) still do not count toward the general minimum salary calculation, but will be taken into account when conducting a comparison with the local salary.

What This Means for Employers and Foreign Nationals

Employers hiring foreign workers can still take into account per diem payments provided by the company and paid as a lump sump for housing, meals and cars when comparing a foreign worker's salary with a local salary.