Germany’s statutory minimum wage rose to €13.90 per hour on 1 January 2026, as confirmed by the
Federal Ministry of Labour and Social Affairs (BMAS) following the recommendation of the Minimum
Wage Commission. A second step to €14.60 follows on 1 January 2027. It is one of the largest
adjustments since the national minimum wage was introduced in 2015.
For HR and payroll teams, the rate itself is the easy part. The knock-on effects — above all the higher
mini-job earnings limit — are where compliance problems actually happen. This guide covers what has
changed, what it means for your payroll, and the steps to take if you have not fully adjusted yet.
The two-step increase: 2026 and 2027
The Minimum Wage Commission — the independent body of employer and union representatives that
proposes adjustments — recommended a two-step increase, which the federal government adopted by
ordinance:
1st January 2026: minimum wage increased from €12.82 to €13.90 per hour (+8.4%)
1st January 2027: minimum wage rises to €14.60 per hour (+5.0%)
The statutory minimum applies to virtually all employees in Germany aged 18 and over, regardless of
employer size or industry, with only narrow exceptions such as certain trainees and apprentices.
The mini-job limit: small role, big payroll implications
A defining feature of the German labour market is geringfügige Beschäftigung — the “mini-job”. It offers
simplified tax and social security treatment and is widely used by students, secondary earners and
retirees, and as a flexible staffing tool in retail, hospitality and logistics.
Since October 2022, the mini-job earnings ceiling (Geringfügigkeitsgrenze) has been dynamically linked
to the minimum wage: it corresponds to roughly 10 hours per week at the statutory rate (minimum wage ×
130 ÷ 3). When the wage rises, the ceiling rises automatically
| Year | Minimum wage | Mini-job monthly limit |
|---|---|---|
| 2025 | €12.82 / hour | €556 |
| 2026 | €13.90 / hour | €603 |
| 2027 | €14.60 / hour | approx. €633 |
If a mini-jobber’s earnings exceed the monthly ceiling — even slightly and even unintentionally — the role
no longer qualifies as a mini-job. It slides into the midi-job band or regular employment, triggering full
social security contributions for both sides and new reporting obligations.
Compliance risks employers should take seriously
• Automatic reclassification: exceeding the €603 ceiling converts the employment status, with
retroactive contribution risks if it goes unnoticed.
• Working-time records: accurate time and attendance recording for minimum-wage and mini-job
employees is a legal requirement — and the first thing auditors ask for.
• Fines: minimum wage violations can be sanctioned with fines of up to €500,000 under the Minimum
Wage Act (MiLoG), plus exclusion from public contracts.
• Fixed allowances: premiums and supplements can quietly push a mini-jobber’s total monthly pay
over the ceiling even when the base wage is compliant.
The wider impact: half of German companies affected
The increase reaches far beyond minimum-wage earners. A survey of nearly 15,000 businesses by the
German Chamber of Commerce and Industry (DIHK) found that the change affects about half of all
companies in Germany, directly or indirectly:
• 40% of companies raised wages in higher pay groups as well, to preserve internal wage differentials
— among industrial companies, nearly half did so.
• 40% plan price increases to offset higher personnel costs.
• 13% intend to reduce staff — over 20% in retail and hospitality.
For SMEs in particular, DIHK warns that rising labour costs — already high by international standards —
may curb investment.
Action checklist: are you fully adjusted?
Even months after the effective date, we still see gaps in practice. Work through this list:
1. Audit contracts and pay structures. Confirm every employee at or near the old rate has been
moved to at least €13.90, and plan the 2027 step to €14.60 into your budget now.
2. Update the mini-job ceiling in your payroll master data. The 2026 limit is €603 per month. Set
alerts that flag mini-jobbers approaching the threshold.
3. Verify your payroll software. Confirm your provider has applied both the 2026 rate and the new
ceiling — and already carries the 2027 values.
4. Review allowances and supplements. Check that bonuses or premiums do not push
mini-jobbers’ total monthly earnings over €603.
5. Communicate with your workforce. Mini-jobbers especially need to understand the new limit and
what happens to their status if they exceed it.
How PayLeute supports employers in Germany
PayLeute helps international companies run compliant payroll in Germany — from applying statutory
changes like the 2026 minimum wage and mini-job thresholds to ongoing Lohnsteuer, social insurance
and DEÜV reporting. If you are hiring in Germany without a local entity, our Employer of Record service
handles employment and payroll compliance on your behalf. Get in touch to discuss your setup.
Sources: BMAS / Minimum Wage Commission announcements; Minijob-Zentrale (Geringfügigkeitsgrenze); DIHK company
survey on the 2026 minimum wage increase
