Germany's Minijob Tax Hike Could Cost Low Earners Up to €52 a Month
Published on 07/05/2026 at 13:26 | Redaktion boerse-global.de
Low-wage workers in Germany face a double hit to their pay packets after coalition negotiators agreed to raise the flat-rate tax on so-called Minijobs from 2 to 5 percent. The change affects roughly 6.8 million people currently in marginal employment.
Under the new rate, someone earning the 603-euro threshold would see employer-paid contributions jump from €12.06 to €30.15. If businesses pass those costs onto workers, net earnings drop accordingly.
But the immediate increase is only part of the picture. On 23 June 2026, Germany's pension commission recommended making pension insurance compulsory for all Minijobbers. If a 3.6 percent employee share is introduced, that would claw back another €22 a month. Combined with the higher flat tax, some workers could lose up to €52 monthly. To keep net pay at its current level, gross wages would need to climb to around €766 — a 27 percent increase.
The health insurance levy paid by employers also rises, from 13 to 17.5 percent of earnings. Yet Minijobbers still won't qualify for sick pay. Critics note that 0.6 percentage points of their contribution goes toward sick pay coverage they can't claim — effectively paying for a benefit they never receive.
Within the coalition, positions diverge. Bavaria's premier Markus Söder rejects any abolition of the model. Friedrich Merz, speaking on a ZDF talk show on 2 July, argued for a sharper distinction between groups such as students, pensioners and those who patch together multiple Minijobs as a full-time substitute.
Women are disproportionately affected. In 2024, the average pension gap stood at €961 for women versus €1,372 for men, with 30 percent of women receiving less than €600. Women make up 55.9 percent of Minijobbers in the commercial sector and 86.9 percent in private households. To date, 79 percent of women in Minijobs have opted out of pension insurance. Since 1 July 2026, that opt-out can be revoked once.
The federal government plans to fold these measures into a broader pension reform package due by the end of 2026. Trade associations, especially from the hospitality sector, warn of widespread job losses in industries heavily dependent on marginal employment.
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