Salary and cost of living in Germany. Is it expensive to live in Germany

Germany is located in the heart of the continent, consists of sixteen states and is known as the largest national economy in Europe and one of the largest in the world. The first thing that is associated with Germany is Hitler, the Berlin Wall and beer. However, Germany is much more than that. It is not only an economically and politically powerful country, but also a rich culture with respect for traditions, history and humanity.

How much is the cost of living in Germany? The Federal Republic of Germany is a state with a high standard of living. The cost of living in Germany is 347 euros per person, when in Russia this figure is about 138 euros.

The structure and dynamics of the economy

One of the most politically and economically influential countries of the European Union is Germany. The country's economy is gradually developing. In 2017, GDP increased by 2.1%, the highest growth rate in the country since 2011. Although export earnings contributed significantly to the country's economic efficiency, domestic demand also played a key role. Germany's public finances hit a record high in 2017.

In 2017, the German economy strengthened with a record budget surplus ($ 38 billion) and a reduction in government debt of almost 3% compared to 2016 (65.1% of GDP in 2017). The government is approaching its goal of lowering public debt to below 60% of GDP by 2024. Over the past year, the contribution of exports to GDP growth has declined in favor of domestic demand. This is mainly due to rising wages and the arrival of immigrants in the country.

Germany faces many challenges, such as an aging population, a lack of engineers and researchers. The withdrawal from the use of nuclear energy by 2022 and the modernization of coal-fired power plants require a lot of funding. The government seeks to attract more investment, especially in transport and energy infrastructure. In 2019, Germany is likely to remain Europe's main economy, but political uncertainty may affect long-term investments. Unemployment reaches record lows. In former East Germany and in many rural areas, unemployment continues to occur.

The agricultural sector accounts for less than 1% of GDP and employs 1.3% of Germany's labor force. This part of the country's economy has greatly benefited from government subsidies. The main agricultural products are milk, pork, sugar beets and cereals. German consumers prefer organic food. The country is undergoing a process of de-industrialization of the food industry.

The industrial sector accounts for about 30.5% of GDP - a sharp decline from 51% of GDP in 1970. The automotive industry is one of the largest industrial sectors in the country, but other specialized sectors also remain in the German economy, including electrical and electronic equipment, mechanical engineering and chemical products. The decision to abandon civilian nuclear energy by 2022 is likely to change the industrial landscape in the near future.

The service sector accounts for 68.7% of GDP and provides 70% of the workforce in Germany. The German economic model relies heavily on a dense network of small and medium-sized enterprises (SMEs), which are well connected with the international environment. More than 3.6 million SMEs are used by 68% of employees in Germany.

Is life expensive in Germany?

The cost of living in Germany is relatively inexpensive compared to its western neighbors. Prices for food, accommodation, clothing, cultural events, etc. are generally in line with the EU average. You will need about 850 euros per month to cover living expenses. The highest costs go to monthly rents.

The standard of living in Germany, public transport, healthcare and education systems are excellent, and trading accounts are significantly lower than in other major cities, including Paris, London, Rome, Brussels and Zurich. Regarding quality of life and well-being, Germany is a leader in the OECD's quality of life rating.

Sample price indicators for individual household goods and products:

Prices may vary significantly in different regions of the country. In general, the south of Germany is the most expensive area to live in, this includes Munich and Stuttgart. For example, renting a one-room apartment in Stuttgart costs 846.43 euros on average, and a similar apartment in the northern German city of Bremen costs an average of 560 euros. In percentage terms, this means that renting an apartment in Bremen is cheaper than in Stuttgart by more than 30%.

The capital, Berlin, is cheaper to stay than most European capitals or some of Germany’s largest cities. A small apartment in Berlin with one bedroom costs an average of 795 euros per month.

Leipzig is one of the most affordable cities to live in Germany. Leasing in Leipzig is cheaper than in Stuttgart by more than 40%. In Dusseldorf, it’s 20% cheaper than in Stuttgart, while prices in Stuttgart and in the largest city in the north, in Hamburg, are quite similar.

Cost of living in Germany

Germany is one of the ten countries with a high standard of living. The cost of living in Germany per month is 331 euros per head of family and 80% of this amount for each family member. Unemployment benefits amount to 60% of wages at the last job. If a citizen does not work for a long time, he has the right to social assistance (also 331 euros), as well as to pay for the apartment and medical insurance at the expense of the state. But all these payments instantly stop at the moment a person goes to work. Often, immigrants live off social benefits in Germany.

Everyone has the right to apply for basic state benefits under one of the following conditions: retirement age, disability, or inability to work due to life circumstances. To receive the benefit, there is another necessary condition: the monthly income should not exceed 789 euros. Payments in this case are approximately equal to the average living wage in Germany - from 324 to 404 euros. Pension benefits are: 1013 euros for men and 591 euros for women.

Remuneration in the country

The minimum salary in Germany in 2018 is 8.84 euros per hour, or about 1498 euros per month. This figure is the same as in 2017, and the next salary survey will be in January 2019.

The federal minimum wage in Germany applies to almost all employees, including: foreigners; people working part-time; being on an internship or test line.

The labor market is gradually opening up to foreigners due to a lack of personnel in almost every area of ​​work. To work in many companies you need to speak German, but some companies, especially in the IT sector, require only knowledge of the English language and some work experience. Thus, working in Germany without knowing the language is quite possible, but if you are going to live in this country, you should start learning German, because not all Germans speak English.

In the German economy, there is a great demand for specialists of various professions, especially in the field of IT, engineers, health workers, scientists and other specialists.

Learning Availability

Germany is one of the most attractive countries for foreign students due to the lack of tuition and high-quality education, especially in the field of engineering and natural sciences. According to UNESCO, Germany in 2013 attracted five percent of international students in the world and became the fifth most popular destination country after the United States, the United Kingdom, Australia and France. Since then, the number of foreign students has been growing with each new school year.

Cost of housing

Prices for apartments in Germany are very dependent on what area you are going to live in, and what are your requirements for apartments. Most people in Germany live in apartments; due to supply and demand, housing is quite expensive. The most expensive city to rent in Germany is Munich, and then Frankfurt and other major cities where the economy is strong, for example, Hamburg, Stuttgart, Cologne and Düsseldorf. Berlin, despite being the capital, had very cheap rents in the 2000s, but now almost caught up with the German cities mentioned earlier.

Although apartments in Germany may seem expensive to some people, the quality of housing is generally decent. Be prepared to pay around 15 euros per square meter in cities like Frankfurt and Munich for a well-maintained (but not new) apartment. The monthly rent will be reduced to 10-12 euros per square meter in other large metropolitan areas, while in Berlin this figure will be close to 8-10 euros.

If the place of residence is a small town or rural area, these costs are significantly reduced to 6-8 euros per square meter, depending on the quality of housing. Leipzig is one of the cheapest cities in Germany, where the average rent is from 6 to 7 euros per square meter, and other general expenses are also lower than the average prices in Germany.

Utility costs are relatively high, partly due to a government decision to phase out nuclear production by 2022 after the Fukoshima disaster in 2011. Utilities are about 2.50 euros per square meter if you live in an apartment. This includes heating, hot water, gas, electricity, garbage collection, snow removal on the premises, as well as cleaning and landscaping services. A telephone line and internet connection cost about 30 euros per month. For a full package, including cable TV, an additional charge of about 15 euros is expected.

Medicine in Germany

In Germany, as in other European countries, compulsory health insurance is valid. Participants in one of the Gesetzliche Krankenkassen, mainly a universal health care system (about 88% of the population), pay 7.3% of income plus an additional fee of 0.3 to 1.7% depending on the type of health insurance.

Thus, you pay up to 9% of your income. The insurance also applies to children under the age of 18, and if they do not work, up to 23 years, and if they are in college - up to 25 years. If the wife or husband does not have their own insurance, she also acts on them if they do not have their own income. Insurance does not cover all medical procedures.

Transportation costs

Public transport has an average cost compared to the rest of Europe and ranges from € 60 to € 90 per month. The costs of owning a car in Germany are slightly more expensive than in most European countries. The cost of gasoline or diesel fuel corresponds to most other European countries, but about twice as much as in North America. The price of fuel is variable and depends on the price of oil. Taxis are expensive, you will pay at least 10 euros even for a very short trip. Uber is absent in Germany: it was banned after a court ruled that it had violated transport laws.

Food expenses

Food prices in Germany are usually cheap compared to most other European countries. Only the Netherlands and several countries in Southern and Eastern Europe have lower average prices for a standard shopping basket.

It will take on average about 40 euros per month to feed one person.

Entertainment and restaurants

Food in restaurants is more expensive than in southern Europe, with the exception of Italy. The prices for drinks are low, especially for domestic products, such as wine produced in the south-west of the country, and beer from the main brewing region of Franconia and Bavaria. The average cost is about 60 euros for a 2-course dinner for two, including wine in a mid-range restaurant.

Drinks at the bar range from € 3.50 to € 4.00 per liter of draft beer and from € 5.00 to € 6.00 for a 0.2-liter glass of good wine. Coffee costs around € 3.00 in a regular cafe. Movie tickets cost around € 15.00. Gym membership ranges from € 25 to € 75 per month.

One person who earns 2,000 euros per month, net of taxes and social security contributions, can easily afford a comfortable life in Germany.

Numbeo is a great site to get a more detailed view of the prices of individual products. It also has an interesting feature that allows you to compare one city with another. Expatistan is another site with similar functionality. If you want to calculate net and gross salaries, a simple Der Spiegel link calculator will help you do this.