Germany’s Federal Ministry of Labour and Social Affairs (BMAS) has confirmed that the statutory minimum hourly wage will increase from €12.82 to €13.90 per hour on 1 January 2026, followed by an increase to €14.60 per hour on 1 January 2027. This two-step increase marks the most significant increase since the introduction of a national minimum wage in 2015, continuing a long-term policy of strengthening workers’ purchasing power while responding to inflation and wage pressure across Europe.
The announcement follows recommendations from the Minimum Wage Commission (Mindestlohnkommission), which brings together employer associations, trade unions, and government representatives to balance competitiveness with fair pay. As Germany remains one of Europe’s largest economies and a manufacturing powerhouse, even small adjustments to wage floors have ripple effects across industries, collective agreements, and, most directly, payroll operations.
In many countries, part-time work is straightforward. In Germany, it comes with its own legal framework. The mini-job (geringfügige Beschäftigung) is a marginal employment category that allows employees to earn up to a legally defined monthly limit while enjoying reduced or simplified tax and social security contributions. Employers pay around 30% in flat rate contributions, including pension, health, and tax, while employees contribute only 3.6% to pension insurance, unless they opt out.
This arrangement is designed to encourage flexibility: students, pensioners, and secondary earners can take on small jobs without administrative complexity, while businesses can access a flexible workforce. This is particularly relevant for employers in sectors such as retail, logistics, manufacturing, hospitality, and delivery services, where mini-jobs remain a core part of flexible staffing models.
But here’s the catch: the mini-job limit is directly linked to the minimum wage. As the hourly rate rises, so must the monthly limit. The monthly limit is based on a standard calculation (roughly 43.33 hours per month, equivalent to 10 hours per week). In 2025, it is €538 and it will rise to approximately €603 in 2026 and €633 in 2027.
This linkage means payroll teams must not only adjust pay rates but also monitor working hours and total earnings to prevent inadvertent breaches. Suppose a mini-job employee exceeds the ceiling, even by a few euros. In that case, their employment reclassifies as a midi-job or regular employment, triggering full social security deductions and changing employer cost structures. Minimum wage violations can result in penalties of up to €500,000, making accurate time recording essential.
These increases will require careful preparation. Payroll leaders operating in Germany should treat this as more than a rate change; it’s a chance to review systems and strengthen compliance. Here are actionable opportunities:
This is also an opportunity to check that wage tax and contribution bases are aligned across payroll, HR, and finance teams. For global organisations, Germany’s local rules can differ sharply from general European payroll logic, especially when it comes to marginal employment and contribution limits.
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Max van der Klis-Busink, MCIPP, RPP, is the Owner of Passion For Payroll and Vice President of Global Strategy on PayrollOrg’s Board of Directors.