Germany Bans Phone Sick Notes, Eases Hiring Rules in Major Labour and Tax Package
Published on 07/04/2026 at 22:32 | Redaktion boerse-global.de
Germany’s coalition committee on Thursday approved a 34-point package that rewrites large parts of the country’s labour and tax landscape. Among the most striking changes: the pandemic-era option to call in sick without a doctor’s note is being scrapped, replaced from day one by a mandatory medical certificate.
From now on, employees who fall ill will need a doctor’s attestation starting on the first sick day. Anyone caught using fake certificates faces tougher sanctions. The move, the government says, aims to cut rising absenteeism and restore discipline in sick-leave reporting.
Families and workers get tax relief – paid for by a higher rich levy
Starting in 2027, the government plans to deliver annual tax relief worth around €10 billion. The basic tax-free allowance will rise, child benefit will climb to €272 per month, and the standard employee deduction (Arbeitnehmerpauschbetrag) will increase to €1,430. A family of four with a gross annual income of €60,000 would save roughly €600 a year.
To finance the cuts, the coalition is tightening the so-called rich tax. From 2027, a 45 percent rate kicks in at €250,000 annual income, rising to 47 percent above €280,000. Mini-jobbers will also feel the pinch: the flat-rate tax on these low-paid positions jumps from 2 to 5 percent.
Overtime, Sunday work and holiday pay get more generous
Employees will soon be able to earn up to 15 overtime bonuses per month tax-free, capped at €170 monthly. That cap drops to €120 for a maximum of 10 overtime hours from 2027.
The rules for Sunday and public holiday work are being drastically improved. The base hourly wage up to which supplements remain tax-free rises from €50 to €75. Tariff-based supplements will become fully exempt from social insurance contributions – previously this relief stopped at a €25 hourly wage. Tax-free pay for work on public holidays is set at up to €400 per month.
Fixed-term contracts stretched to four years – dismissal eased for top earners
In perhaps the biggest shake-up of hiring rules, companies can now offer fixed-term contracts without a specific reason for up to 48 months (four years) on new hires, valid until the end of 2030. Previously the limit was two years. Up to six extensions are allowed within that period. From early 2027, the written-form requirement for fixed-term contracts will also be dropped.
Dismissal protections are being loosened for high-income earners. Anyone earning an annual salary of roughly €177,450 or more will be easier to dismiss with a severance payment. That rule takes effect in January 2027. The government is also creating tax incentives for quick job changes and the associated severance payouts.
The package represents a sharp pivot in German labour policy – rewarding extra work and flexibility while tightening the rules on sickness and low-productivity employment.
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