Germany: Benchmarking Employee Benefits in Germany for 2020

benchmarking employee benefits in GermanyTo get an insight into benchmarking employee benefits in Germany for 2020, read this market guide provided by Profion.

Profion advises over 200 multinational employers with over 30,000 employees. From this comes a rich source of market data that lets them create in-depth benchmarking reports to help employers all over the world understand the German benefits market. To help multinational employers new to German benefits, Profion created this market guide to illustrate the norms for industries with discernible skill shortages. This includes technology, life sciences, and management consulting.

General topics include:

  • The German benefits landscape
  • Mandatory requirements and employment law
  • Typical benefit design and cost

An example of what’s inside…
When benchmarking employee benefits in Germany, know that retirement matters most.

  • Retirement financing is the biggest concern for employees. This is for two reasons. The state pension amounts continue to decrease, and the retirement age increases. For example, early retirement is possible from age 62, albeit with reductions of 0.3% per month.
  • Every employer must, by law, transfer minimum contributions into the state pension system for both the employer and employee. Contributions to the state pension do not accumulate into a cash-backed fund on behalf of the employee. Instead they receive payment from current income from pension insurance. This is by means of an allocation process (pay-as-you-go system).
  • Due to the funding crisis, the normal monthly gross retirement pension amount is approximately €1,154 based on 45 years of contribution and an average income. The maximum normal gross monthly retirement pension amounts to approximately €3,000. This is however a theoretical figure since it is almost unachievable.
  • Due to changes in the pension law, pension payments are now subject to tax. This applies over a gradual time frame for pensions already being paid to avoid undue hardship for the pensioners.


If you need support with your employee benefits in Germany, please contact Asinta, and we will put you in touch with Profion.