Salary Negotiation
Make sure you get the most out of your hard work with these tips!
You submitted a successful application, rocked your interviews and finally have an offer in hand. Now comes the final step - negotiating your salary!
Salary negotiation is the process of discussing and agreeing upon the type and amount of compensation an employer pays you for your work. It usually takes place during the final stages of an interview or when a position has been offered.
INDUSTRY/COUNTRY SPECIFICS
Each position, industry and country has their own policies, procedures and cultural nuances related to salary negotiations. We strongly encourage you to research and follow salary negotiation standards for your position, industry and/or country. You can use this general and Germany-specific information as a starting point, and then complete further research for specific positions, industries and/or locations.
# Research Standards
The very first step in negotiating your salary is determining the standards for your position, industry and location. These can vary greatly, even within the same country.
Knowing these specific standards will give you a better sense of your options and leverage your arguments for a salary increase.
Factors to consider include:
POSITION
- What are the salary norms for this position?
- How many years of relevant work experience do you bring?
- Can your academic degree boost your earnings?
- Which responsibilities are associated with this position?
- Are these positions in salary or tariff groups with a pre-determined salary (group)?
- Which benefits are included in this position?
COUNTRY
- What is the local minimum wage?
- Are there local or regional salary differences?
- What are the local costs of living? Which salary level do you need to live in a specific location?
- How are local salaries and taxation policies structured? What is your gross (pre-tax) salary and what is your net (post-tax) salary?
- Which benefits (e.g. health insurance, pension fund) are included or taxed in this country's salary?
- How do you approach salary negotiations in this culture?
INDUSTRY
- What sort of organization is this (small, large, start-up, etc)?
- What are salary standards for this sector?
- Which benefits are traditionally offered in this sector?
- Which advancement opportunities are offered in this sector?
ADDITIONAL FACTORS
- Which tools do you need for your own personal and professional fulfillment? Does the company provide this?
- Do you need visa sponsorship? If so, which policies do you need to follow and will this company sponsor your visa?
- How much vacation time is offered? If you need to travel overseas (e.g. to visit family) is this sufficient time off for your personal travel needs?
- Has the covid-19 pandemic impacted salary negotiation practices? Which alternatives are offered?
# Salary Parameters
Once you know the salary standards for your position, industry and location the next step is to figure out your parameters.
These parameters should be realistic (based on the research you just did) and reflect your own values. Emphasize what is important to you early on, otherwise you will be unhappy in the long run.
Knowing your parameters will also help you make a better case for a specific salary range or benefits.
Questions to consider
- What is your career objective? Which rewards are important in your career (e.g. money, work-life balance, other benefits)?
- What are your salary limits? What is your lowest limit?
- How much funding do you need to support your daily life in a specific location?
- How will your income contribute to your overall satisfaction?
- What are advancement opportunities in your field? Are there timelines/benchmarks?
- How much do you value non-financial benefits (e.g. free time, flexible work structures)?
# Types of benefits
In addition to money, some companies may offer additional benefits to their employees. Here is an overview of some of the resources that may be offered:
TRANSPORTATION
Some companies will offer free or subsidized public transport tickets.
Depending on your position and/or responsibilities you may also be offered a company car and free parking.
BONUS
A bonus is an additional salary offered when you reach certain goals or benchmarks. This can be a fixed amount or a percentage of your salary.
Some companies may also offer a 13th or 14th salary.
PROFESSIONAL DEVELOPMENT
These can include internal and/or external training, certifications, conferences, promotion schemes and further education opportunities.
TECHNOLOGY
Some companies may offer you technological devices to complete your work. These can include computers, laptops, tablets and/or mobile phones.
FLEXIBLE WORK
This can include working from home/remotely, flexible work hours and time off for personal matters.
Flexible work options may be based largely on your responsibilities and are generally not impacted by covid-19 remote work policies.
ADDITIONAL PERKS
These can include meals/food, beverages, gym memberships, health-related perks and discounts on external products (e.g. discounted mobile phone contract).
# Communication
Now that you know your options and parameters it's time to communicate your salary wishes with an employer.
Generally you wait for an employer to bring up the salary - mentioning salaries first can be considered rude.
If you're asked for a desired salary in an application always list a salary range with a willingness to negotiate. This allows for some wiggle room in case your expectations don't fully align.
If your initial salary negotiations don't work out ask for future opportunities to discuss them. This could include the end of your probation period, work anniversaries (6 months, 1 year) or advancement opportunities. Renegotiating your salary later in your career can work to your advantage since your employer now has a better sense of your abilities.
# Salary Negotiation in Germany
Salary negotiations in Germany are something private that Germans feel uncomfortable discussing, even among friends and colleagues. It's really important to do your own research.
Here are some considerations to keep in mind:
REGIONAL
- Salaries and cost of living are generally higher in southern and western Germany.
- Berlin generally has lower salaries and cost of living.
- Salaries may vary from city to city in a specific region.
TAXES
- Salaries are generally paid monthly in Germany.
- Taxes and insurances are directly taken from your monthly base (gross, Brutto) salary.
- These taxes include income tax, health insurance, unemployment insurance, pensions, nursing care insurance and church tax (if applicable).
- Your taxation rate depends largely on your location, German tax class and family status.
- After taxes are taken out of your salary, the remaining net (Netto) salary is transferred to your bank account.
- On average, you will receive 60% of your gross salary as net salary.
- Always calculate your net income before signing a contract. You can use calculators like this one.
# Resources
SALARY RESEARCH TOOLS
GERMANY-SPECIFIC RESOURCES
# Your Contacts
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