Hiring in Germany: Does Your Compensation Policy Meet Local Standards?

Planning to hire in Germany? Your French compensation model might not make the cut.
What seems attractive in Paris could fall flat in Berlin if it doesn’t match German expectations around structure, transparency, and benefits. From gross annual salary formats to bonus logic and working time regulations, the German market plays by different rules.
To attract top talent, your pay strategy must do more than translate — it must adapt.

Expanding into Germany without adapting your compensation policy is a strategic risk. Germany’s job market operates under a different legal framework, a distinct salary culture, and candidate expectations that may surprise even experienced HR leaders from France.

Germany is experiencing a severe skilled labor shortage. According to the Bundesagentur für Arbeit, Germany had more than 1.8 million unfilled positions in 2025 — especially in IT, engineering, healthcare, and skilled trades. This shortage creates a candidate-driven market, where applicants can afford to be selective. That means your salary offer must be not just competitive — it must also be structurally aligned with local standards.

Key misalignments seen in the field:

• French companies often list monthly gross salaries, while Germans expect a gross annual figure (e.g., €65,000/year, not €5,416/month).
• Many French companies include tickets restaurant or mutuelle in their offer — benefits which are not standard or relevant in Germany.
• German candidates expect clarity on bonus structure, 13th-month pay, and total leave days, whereas French offers may lack formalized language around those elements.

According to the StepStone Salary Report 2025, the average gross annual salary in Germany across all industries is €58,800, with higher expectations in urban centers. In Munich, for example, tech professionals earn €75,000–€85,000/year, compared to €60,000–€65,000 in smaller cities. Candidates are well aware of these benchmarks and use platforms like Kununu, Glassdoor Germany, or Gehaltsvergleich.de to research before applying.

Moreover, German candidates often expect:

• Clearly structured annual reviews
• A probation period (usually 6 months) with post-probation salary clarity
• Precise working hours (usually 38–40 hours/week) with clear overtime rules

A well-intentioned French offer that seems generous locally may feel incomplete or disorganized in the German context.

Adapting your compensation policy is not just about converting euros — it’s about speaking the same professional language. Doing so improves your employer brand, reduces time-to-hire, and increases the chances of successful onboarding in a complex and talent-scarce German market.

Understanding the structural and cultural differences between compensation models in France and Germany is critical for any French employer expanding across the Rhine. A package that works in Paris may fall short in Frankfurt — not because of the salary amount, but because the logic, format, and expectations differ dramatically.

Salary presentation: monthly vs. annual

In France, salaries are usually communicated as gross monthly amounts (e.g., 3 500 € brut/mois), while in Germany, it’s standard to present the annual gross figure (e.g., 42 000 € brut/an). This alone can lead to confusion during interviews, offer misinterpretation, or even loss of trust if the figure seems unclear.

A French offer of €3,750/month will sound less appealing in Germany than €45,000/year, even if the total is the same — because German candidates are trained to calculate in annual terms, including potential extras like bonuses or a 13th salary.

Structure of compensation: what’s included?

Here’s what French companies typically include in their packages:

• Tickets Restaurant (meal vouchers)
• Mutuelle (company-supplemented health insurance)
• Transport reimbursement (50% of public transport)
• RTT days for working more than 35 hours/week
• Bonuses and intéressement (less formalized)

Now compare that to a standard German package:

• Gross annual salary, often with a 13th month or holiday bonus
• Bonus based on KPIs or company performance
• 38–40 hours/week, no RTT
• Private health insurance for higher earners, but public coverage is standard
• Optional: pension contributions, company car, or job ticket

While benefits like tickets restaurant or mutuelle are expected in France, they are either irrelevant or not valued in Germany. German candidates are more focused on:

• Stable fixed income
• Clear and fair bonus logic
• Well-defined annual leave (28–30 days)

According to a survey by Statista, the top-valued benefits in Germany are:
1. Flexible working hours (68%)
2. Home office (64%)
3. Extra vacation days (60%)
4. Employer-sponsored retirement plans (48%)

Legal & contractual differences

In France, many industries are governed by national or sector-wide collective agreements (conventions collectives), which define:

• Minimum salaries
• Bonuses
• Paid leave
• Seniority increases

In Germany, about 52% of employees are covered by a Tarifvertrag (collective agreement), mostly in large companies or public sectors. In SMEs — which make up a large part of the German economy — salaries are often negotiated individually, giving employers more flexibility but also placing greater responsibility on them to know the market rates.

Also, German employment contracts are typically more detailed in how they define compensation, notice periods, and bonus rules. A vague bonus clause (“bonus at the employer’s discretion”) is not well received and may discourage high-potential candidates.

Summary

Element	France	Germany
Salary format	Monthly (gross)	Annual (gross)
Health insurance	Employer-funded mutuelle	Public; private for high earners
Standard hours	35h/week + RTT	38–40h/week, no RTT
Common benefits	Tickets restaurant, transport	Bonus, pension, vacation, job ticket
Bonus structure	Less formalized	Often KPI-based & contractual
Leave	25 + RTT	28–30 days

Done right, this alignment gives you a strong edge in recruiting and retaining German talent.

To successfully attract talent in Germany, you must understand what’s competitive, what’s expected, and what’s considered below market standards. Salary levels in Germany vary significantly by industry, job title, region, and company size — more so than in France, where conventions collectives provide stronger standardization.

Let’s look at some average gross annual salaries in Germany based on the StepStone Gehaltsreport 2025, one of the most widely used tools by HR professionals and candidates alike:

Average Gross Salaries by Sector (Full-time positions, 2025):

• IT & Software Development: €60,000 – €75,000
• Mechanical & Automotive Engineering: €62,000 – €80,000
• Sales & Business Development (B2B): €65,000 – €90,000
• Finance & Accounting: €55,000 – €70,000
• Marketing & Communications: €50,000 – €68,000
• Human Resources: €48,000 – €65,000
• Healthcare (nurses, specialists): €38,000 – €60,000
• Skilled Trades (Facharbeiter): €34,000 – €45,000 Entry-level salaries for graduates with a master’s degree typically range from €45,000 to €52,000/year, depending on the sector and city.

Regional differences: West vs. East, urban vs. rural

Germany has significant regional pay gaps. In general:

• Western Germany pays 10–25% more than Eastern Germany
• Urban centers like Munich, Frankfurt, Stuttgart, and Hamburg offer the highest salaries
• In Munich, the average full-time salary is €61,400, while in Leipzig, it’s around €45,000 (Statista 2025)

Company size and benefits

• Large companies (over 1,000 employees) tend to pay 15–20% more than SMEs.
• Multinationals offer more structured bonus schemes, pension contributions, and company perks (car, job ticket, extra holidays).
• SMEs (Mittelstand) may offer more flexibility, faster promotions, but lower base salaries and fewer benefits.

Use tools like:

• Gehaltsvergleich.de
• Glassdoor Germany
• Kununu to cross-reference what similar companies are offering in your industry and location.

Key mistakes to avoid:

• Offering a salary based on French standards (e.g., €42,000/year for an engineer) where the local German expectation is €60,000+
• Not including bonus or 13th month in your calculation
• Forgetting to explain what your gross annual figure includes (this must be clearly communicated)

In Germany, candidates do their homework. They expect offers that reflect market value, location, role, and seniority. If your salary is too low — or poorly communicated — you may never even reach the interview stage.

Hiring in Germany isn’t just about offering enough money — it’s about offering it the right way. German candidates expect compensation to be transparent, structured, predictable, and legally sound. Failure to meet these expectations often results in lower application rates, offer rejections, or loss of trust during the hiring process.

Let’s break down what German professionals look for in an offer:

Clear gross annual salary (Jahresbruttogehalt)

German candidates expect the salary to be expressed as a gross yearly figure, e.g., “€68,000/year”, not as a monthly salary. This format typically includes:

• All fixed income (base salary + 13th month, if applicable)
• Clear mention of any bonuses or variable pay

According to the StepStone Salary Transparency Study 2024, 62% of German candidates say they are less likely to apply if the salary isn’t mentioned in the job ad. Transparency isn’t optional — it’s a trust factor.

Defined and measurable bonus structures

While bonuses are common, they must be structured and contractually defined. German professionals don’t respond well to vague statements like “bonus based on company results.” Instead, they expect:

• KPIs or performance criteria
• Bonus caps and payout frequency
• Clarity on eligibility (e.g. after probation)

Legally precise contracts

German candidates are used to detailed employment contracts. They will look for:

• Exact working hours (typically 38–40h/week)
• Overtime compensation or “inclus dans le salaire”
• Notice period (4 weeks to end of the month is standard)
• Number of vacation days (28–30 is competitive)

Contracts must align with collective agreements (Tarifverträge) if applicable — especially in unionized sectors (public service, automotive, health care).

Work-life balance and flexibility

Work-life balance is a key decision factor. A 2024 survey by Statista showed:

• 73% of German employees rate flexible working hours as essential
• 68% expect remote work options
• 61% value paid vacation of 30 days or more

If your company can offer mobile work or hybrid models, communicate this clearly — it's a major attraction point.

Stability and legal reliability

Many German professionals still value long-term employment, especially in engineering, manufacturing, and finance. They will expect:

• A permanent contract (unbefristeter Vertrag) after probation
• Fair pay progression through tenure or annual review
• Employer pension contribution (Betriebliche Altersvorsorge) in some sectors

Red flags for German candidates that French employers should avoid:

• Vague wording in offers (“competitive salary”, “bonus TBD”)
• Lack of clarity about what’s included in the gross figure
• Contracts that feel “thin” or incomplete legally
• Unwritten promises about career progression

German candidates expect your offer to be professionally structured, contractually defined, and aligned with local standards. Transparency and predictability are not just appreciated — they are required to be competitive.

If your company can demonstrate that it understands — and respects — these norms, you’ll be far better positioned to hire top talent and build long-term trust.

A well-adapted compensation policy is the cornerstone of successful recruitment in Germany. It affects not only whether candidates apply, but also whether they stay — and whether your employer brand grows or suffers.

Here’s how French companies can strategically and effectively adjust their compensation approach for the German market:

Benchmark using German salary data — not French standards

Start by using local data platforms to understand salary ranges by region, industry, and role. Reliable tools include:

• StepStone Salary Report
• Gehaltsvergleich.de
• Kununu and Glassdoor

Offering a salary based on French benchmarks. A marketing manager paid €48,000/year in France may expect €65,000 or more in Germany, especially in Munich or Frankfurt.

Reframe your offer for a German audience

Adjust how you present your offer. Instead of:

“€3,800 gross per month + tickets restaurant + mutuelle”

Use something like:

“Gross annual salary: €49,400 (including 13th month), plus bonus up to €5,000 based on annual performance”

Also, remove benefits that don’t translate (e.g. tickets restaurant) and instead highlight:

• Paid vacation (28–30 days)
• Hybrid or remote work policies
• Company pension contributions (Betriebliche Altersvorsorge)
• Professional development budgets

Use legally sound, detailed employment contracts

In Germany, vague contracts create mistrust — and potential liability. A proper contract should include:

• Salary structure: base + bonuses + extras
• Working hours and overtime policy
• Vacation entitlement
• Bonus eligibility rules
• Notice periods
• Trial period terms (often 6 months)

Partnering with a local HR firm or payroll provider is highly recommended, especially for SMEs unfamiliar with German labor law.

Localize your employer branding and tone

German candidates appreciate professionalism, clarity, and long-term vision. Tailor your employer branding to highlight:

• Stability (permanent contracts, long-term goals)
• Responsibility (social protections, training)
• Structure (career plans, regular salary reviews)

You can post on German platforms like:

• StepStone.de
• XING Jobs
• Jobware

Prepare for structured candidate discussions

German candidates are often well-informed and direct. Be ready to discuss:

• What’s included in the gross salary
• When raises or bonuses are reviewed
• What legal protections and benefits are provided
• How the role fits into the company's long-term vision

Provide a simple “Compensation Factsheet” in German summarizing salary, benefits, working hours, vacation, and bonus rules. This increases trust and boosts your conversion rate post-interview.

Pitfalls to avoid

• Overestimating the value of French perks (e.g. Mutuelle, RTT)
• Underestimating regional salary variation within Germany
• Using vague contract language or “trust-based” arrangements
• Ignoring cultural expectations about structure and transparency

To win the war for talent in Germany, you must play by German rules. That means:

• Speaking the salary language (gross annual, bonus logic, structure)
• Respecting local legal and cultural frameworks
• Demonstrating professionalism and predictability in your offer

With a localized, transparent, and market-aligned compensation policy, you won’t just recruit faster — you’ll retain longer and grow stronger.

Learn more:

• How to Handle Employee Disputes in Germany
• How to Hire in Germany Without Relying on LinkedIn or Job Boards
• 5 Hiring Mistakes That Undermine Your Sales Recruitment in Germany