Other wage components - Allowances and supplements

• Principle
• Allowances or surcharges
  • Examples of allowances and supplements that are always taken into account:
  • Examples of supplements and allowances which cannot be taken into account

Principle

The minimum wage is a gross wage, which must be calculated and paid out as a cash benefit.

Remuneration by way of granting benefits in kind, that is to say, benefits provided by the employer in return for the performance of work in a form other than money, is not permissible. The possibility of offsetting benefits in kind for seasonal workers, as provided for by the Minimum Wage Act, does not exist for Postings under the Posting of Workers Act or the Act on Temporary Agency Work.

The minimum wage shall be determined on the basis of the following principles:

The minimum pay pursuant to the Minimum Wage Act is an hourly gross rate which shall be determined with reference to a "full" hour of 60 minutes. By law, the entitlement to receive not less than the minimum rate is not dependant on the time of day when a job is done nor on the circumstances or success of the work performance. The minimum pay entitlement shall be deemed satisfied by the employer as soon as that money has been transferred or made available to the worker at his or her free disposal.

Allowances or surcharges

All monetary contributions coming under the relationship of exchange between employer and employee can satisfy a worker’s minimum wage entitlement. The only monetary contributions in this context which are excluded from satisfying the entitlement are those which the employer provides without regard to an actual work performance or in order to comply with specific legal requirements.

Examples of allowances and supplements that are always taken into account:

• Allowances or supplements paid exclusively for work that must regularly and continuously be performed under the terms of an employment contract (e.g. a construction bonus for all workers employed on the building site).
• Allowances that are identified in the employment contract of a worker posted from abroad as the difference between the wage in his home country and the minimum wage due in Germany, the country of posting.

• Supplements and allowances the payment of which requires:

  • more work per time unit (piecework premiums),
  • above-average quality work results (quality premiums),
  • work at particular times (e.g. overtime, Sunday, holiday),
  • work under difficult or dangerous conditions (e.g. dirt allowances, or danger allowances)

Examples of supplements and allowances which cannot be taken into account

• Supplements for working nights.
• Posting allowances paid to reimburse costs actually incurred as a result of the posting (posting costs) cannot be counted against the minimum wage. The costs of posting are in particular travel, accommodation and catering costs.
  If the working conditions applicable to the employment relationship do not determine which components of a posting allowance are paid as a reimbursement of posting costs or which components of a posting allowance are part of the remuneration, it is irrefutably presumed that the entire posting allowance is paid as a reimbursement of posting costs and therefore not taken into account when determining whether the minimum wage requirement has been satisfied.

The employer’s social security contributions shall not be disregarded for the purpose of calculating the minimum wage.