How social security system in Germany helped me during my difficult times?

In this blog post I would like to share with you my personal experience receiving social benefits in Germany when times were bad for me. I also cover the topics about the average salary a software developer with 2-3 years of work experience can expect to get in Germany and lastly I would give you a comparison between living in Germany vs in the USA.

Topics that I cover in this blog post:

  1. How did social security in Germany helped me when I lost my job
  2. How did social security in Germany helped me when my health was at a toss
  3. How much does a Software Engineer make in in Germany and how much does he pay for tax and social contributions
  4. Salaries in Germany vs USA for a software developer

How did social security in Germany helped me when I lost my job:

It was spring of 2018, I went to office with full of energy. I had joined my very first technology startup just couple of weeks back. Before joining this startup I had worked for a clinical research company for almost 2 years. At around 10am I received a slack message from the CEO of the startup to meet him in 15mins. I was all curious to meet him as I thought it might be something very interesting about my work which he wants to discuss with me. I went to his room to meet him. As soon as I entered the room to my surprise the CEO handed me a document which said that I am being fired from the job due to company’s financial situation.

For an employer in Germany, firing someone who is in the probation period (first 6 months of any new job) is far easier than firing someone who is well over the probation period. As soon as I heard the news I was shocked and could literally feel my ears burning because of fear. Being an immigrant from a non-EU country I literally did not know what exactly to do next. As I had not anticipated about me getting fired, I never took the time to gain knowledge about what are the consequences if I am being fired from a job in Germany.

As I was completely nervous, the CEO calmed me down and told me to go to a government organisation called “Arbeitsagentur” (Job Center) and get registered myself as an unemployed person with 3 days. He also told me that as soon as I get registered, from the day I am unemployed until the day I get new job the government would pay me 60% of my salary for a maximum period of 1 year when I have already worked for at least 2 years in the past. After me knowing this fact I was so thankful about the system because it provided me a great safety net financially and psychologically until I get a new job.

At least for a person like me who is from a non-EU country it is very uncommon to receive unemployment benefits from the state because we do not have such a system in place. In India If I am being fired from a job and if I have a family to feed it can be very stressful financially and psychologically until I find a new job. The good thing about Germany is that, as there are lot of IT jobs available and Germany has the shortage of skilled labours, within no time I could able to find the new job.

How did social security in Germany helped me when my health was at a toss:

Although I hate to say it out loud I think, each of us in our lifetimes would have the high chances of getting sick at least once and the cost of that could be very expensive if we are not insured. In India if we want our health to be insured then there are only private insurances available and it has to be bought on our own will. It is said according to this article that in India nearly 30% of the population don’t have any health insurance.

Compared to that, in Germany it is mandatory for each and every resident to have a health Insurance which provides inpatient, outpatient, mental health and prescription drug coverage. For the first 4 years of me living in Germany there was not even a single day I went to a doctor as I was never sick. I think this is mainly because of the better quality of air and food that we get in Germany compared to India. As this was the case I was always wondering if it is unfair to have mandatory health insurance because it is about 15% of your wage which is contributed to our health insurance.

In the beginning of 2019 I had a sports injury and I dislocated my arm. After the diagnosis it was confirmed that I had to get a surgery done. Although it was not a major surgery, if it was India and if I did not have any health insurance it would have easily cost me around INR 6-8lks (Eur 7-9k) in total. In addition to that I would have been on loss of pay due to sickness for three to four months.

But in Germany because of the mandatory health insurance I did not have to pay a single euro (except €40 which was taken as a service changes while I was admitted to the hospital) for the surgery. On top of that I also got rehabilitation service for a month for free (in a 3 star hotel where they made sure to increase the speed of my recovery). Also, for the four months period during which I was not able to go to office I got my salary from the health insurance and the pension fund so that I did not have to stress myself for my financial needs. I think that this is also another major thing which provides safety net for any individual financially and psychologically which can be directly attributed to the great quality of life one can have living in Germany.

How much does a Software Engineer earn in Germany and how much does he pay for tax and social contributions:

A software engineer with around 2-3 years of job experience earns around €55k per year. Below you can see all the taxes and social security contributions that are deducted from the gross salary. If you want to calculate for any other salaries this is the website which you can use to get the information about how much you would end up paying taxes and mandatory social security contributions. Also, one thing to keep in mind is that the below numbers are for a person who is single without any children. If someone is married then with the same gross salary he would have more net salary (i.e, his taxes are reduced) and if he has children then again with the same gross salary he would get even more net salary (i.e, his taxes reduces further). Apart from that each month they would receive about €250 per child (Kindergeld) until their child reaches the age of 18. More information about Kindergeld can be read in this article.

In order to know the details of each and every line item in the social security contributions section, please check out this article from make-it-in-germany which explains you about the tax brackets and what exactly each social security contributions are for.

Salaries in Germany vs USA for a software developer:

A software engineer with around 2-3 years of job experience makes around €55k ($63k) per year in Germany while in the US the same engineer could make up to €96k ($110k) per year. If we just compare these number then obviously it feels like working and living in the USA is far better than working and living in Germany. But, before we make any conclusions we need to dig deeper and understand the exact differences by comparing other benefits which could be vital for our day to day lives.

In the below table I tried to compare some of the attributes between Germany and the US to get a more holistic view on the earnings, expenses and the social securities that can be obtained in the respective countries.

Source for all the calculations:

Gross Salary yearly€55k€96k
Gross salary monthly€4.5k€8k
Net salary monthly€2.8k€5.6k
Cost of living (per person per month)€780€840
Rent in Germany (1 bed room house per month)€730€985
End of month bank balance€1.3k€3.8k
Cost of hospital if you break your legClose to €0Close to €33k
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Cost of education for children attending public school from Kindergarten to 12th GradeClose to €0
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€143k ($163k)
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Work visa difficultyIf you have a job contract then nothing to worry. Upon 21 months of employment you are eligible to apply for a Permanent Residency when you hold a Blue Card
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Even though if you have a well paying job, if your name is not picked in the lottery (which has 35% chance to win) you should get back to your original country
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Social securityA great source which gives a good comparison between Germany and the US

As we can see in the above table, even though there is a huge potential to earn twice the money in the US when compared to Germany if you are someone who prefers to have more security over money Germany is the place to be. I have couple of my friends living in the US who are earning similar salaries as mentioned above. Although they are very happy about the how much money they make I always feel that they live in the fear of not getting the visa and the fear of what could happen if their health takes a toll.

Different people will have different priorities and it is absolutely fine. If you are someone who wants to make a lot of money then I would recommend you to go to the US if given a chance. But if you are someone who is looking for peace of mind, giving great free education to your children, living a stress free life by saving a bit and enjoying your life with great quality of life then any day I would recommend you to work and live in Germany.

If you belong to the second category of people then I suggest you to visit our website to know more about us. Once you know who we are what we do then check out our current job openings. If you find the job that fits your profile then go ahead and apply for that position.

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