Germany’s Minijob Reform Raises Employer Tax Burden as Retailers Warn of Billions in Extra Costs
Published on 07/09/2026 at 04:44 | Redaktion boerse-global.de
The German government has approved a sweeping overhaul of the country’s mini-job system, preserving the basic model of low-paid, tax-privileged employment while sharply increasing the costs for employers who rely on it. Nearly 6.8 million people currently work in such jobs, with the retail and hospitality sectors—home to 1.1 million minijobbers in gastronomy alone—expected to bear the brunt of the changes.
Under the new rules, the flat-rate tax on minijob income will jump from 2 to 5 percent. For an employee earning the standard monthly threshold of €603, the employer’s tax bill rises from roughly €12 to €30 per worker. On top of that, the health insurance contribution could climb from 13 percent to as high as 17.5 percent. Combined, the total employer levies may increase from 31.17 percent to more than 35 percent. The German Retail Association (HDE) has warned that the cumulative burden could reach billions of euros.
The reform also touches pension insurance. Starting 1 July 2026, minijobbers will have a one-time opportunity to revoke their exemption from mandatory pension contributions by submitting a written declaration to their employer. Currently, nearly 80 percent of commercial mini-job workers opt out of the state pension system. The government’s independent pension commission has recommended scrapping the special status almost entirely, allowing exceptions only for school pupils. A final decision on introducing a general obligation to pay into pension insurance has been postponed until autumn, after the cabinet previously rejected a full abolition of the opt-out option.
Trade associations are sounding alarms. The German Hotel and Restaurant Association (DEHOGA) warned that the cost increases would make the mini-job model far less attractive for both employers and employees. The horticulture association echoed the concern, saying small and medium-sized businesses are being disproportionately squeezed while the package fails to deliver needed flexibility on working hours. According to the association’s calculations, an employee earning €603 gross would be left with only about €475 net after regular social security deductions.
The minijob changes are part of a broader tax package planned for 2027. The legislation also includes higher income-tax allowances, adjustments to child benefits, and a new top rate for very high earners. The government aims to finalise the entire package by the end of the year.
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