Germany Confirms Two-Stage Minimum Wage Hike to €14.60 by 2027

Historic Wage Increase Approved

Germany's federal government has officially confirmed a significant two-stage increase to the national minimum wage. The hourly rate, currently at €12.82 since January 1, 2025, will first rise to €13.90 by January 2026 and then to €14.60 by January 2027. This move marks one of the largest percentage increases in the history of Germany's minimum wage, which was first introduced in 2015.

The decision, formalized by the federal government, follows a proposal made by the independent German Minimum Wage Commission (Mindestlohnkommission) in June 2025. The Federal Ministry of Labour and Social Affairs is expected to issue a corresponding statutory ordinance to formalize these new wage levels.

Role of the Minimum Wage Commission

The Minimum Wage Commission, a key institution in Germany's wage policy, is responsible for reviewing and recommending adjustments to the statutory minimum wage every two years. It comprises six voting members: two representatives from employers, two from trade unions, and two scientific advisors, along with a non-voting chairperson. Their recommendations are based on a range of economic indicators, including wage trends, price levels, and productivity data, aiming to reflect macroeconomic developments and ensure an appropriate wage floor.

The commission's latest proposal, announced on June 27, 2025, suggested the two-step increase, which was subsequently adopted by the government. This cumulative rise of nearly 14 percent from the current level is the largest hike recommended by the Commission since the minimum wage's inception.

Impact and Context

Approximately 6.6 million workers in Germany are expected to directly benefit from these wage adjustments. The increase is intended to provide relief to low-paid workers amidst rising inflation and economic uncertainty, boosting domestic confidence and purchasing power.

The statutory minimum wage in Germany was initially set at €8.50 per hour when it was introduced on January 1, 2015. Since then, it has seen several adjustments, with the most recent prior increase bringing it to €12.82 per hour as of January 1, 2025. The upcoming increases also have implications for 'Minijob' limits, which are linked to the minimum wage.

Looking Ahead

While the approved increases are substantial, they fall short of calls from some politicians, particularly within the Social Democratic Party (SPD), for a €15 minimum wage. Nevertheless, the government emphasizes that this reform is a crucial step towards 'greater fairness and recognition for those who keep our country running day in and day out,' as stated by Labour Minister Baerbel Bas. Companies operating in Germany are advised to prepare for these upcoming wage adjustments, updating payroll systems and budgeting for increased personnel costs.