Germany's €6.9 Billion Civil Service Pay Overhaul: Union Demands and Regional Disparities Emerge
Published on 07/21/2026 at 04:21 | Redaktion boerse-global.de
Berlin has unveiled a sweeping pay reform for civil servants that will cost roughly €6.9 billion — the first major restructuring of salary scales since 2004. But even as the government moves to comply with a Constitutional Court ruling from September 2025, unions are already pushing back against what they see as gaps in the plan.
The German Trade Union Federation (DGB) welcomed the general direction of the changes in Brandenburg, which take effect retroactively on 1 January 2026. Yet it flagged a critical sticking point: a temporary increase in the weekly working week to 41 hours, a measure that will remain in force until mid-2031. The DGB insists that overtime should be credited from the very first extra hour, not only once a threshold of five hours is crossed. It also demands that the planned teaching allowance be set at no less than €200.
Inside the Federal Plan
On the national stage, Interior Minister Dobrindt is driving a massive adjustment to federal pay scales. A full draft law is not expected before September 2026. The price tag breaks down as follows: €3.39 billion for the federal government in 2025 and another €3.52 billion in 2027. Länder budgets will also take a hit. Hesse has allocated €755 million; Schleswig-Holstein €460 million.
The overhaul marks the first linear increase in base salaries since 2004, ending a two-decade freeze in the pay structure.
New Bonus Payments for Collective-Agreement Staff
For roughly one million employees covered by the TVöD (the collective wage agreement for the public sector), annual special payments will change in 2026. The bonus is paid with the November salary. Rates now vary by pay grade and employer:
Federal level:
- Pay grades 1–8: 95 percent (up from 90)
- Grades 9a–12: 90 percent (up from 80)
- Grades 13–15: 75 percent (up from 60)
Municipal employers (VKA):
- A flat rate of 85 percent applies to all grades
Healthcare and nursing:
- Hospitals: 90 percent (grades 1–8), 85 percent (grades 9a–15)
- Nursing homes (grades S2–S9): 90 percent
A new optional model lets employees swap the cash bonus for up to three additional days off. The request must be submitted by 1 September 2026. One catch: under municipal agreements, any unused days are forfeited without compensation.
Regional Pay Gaps and Broader Wage Trends
Salaries in the public sector still differ sharply across Germany. In North Rhine-Westphalia, a worker in pay grade 13 earns between €4,628 and €6,470 gross per month. In Baden-Württemberg, the same grade starts at €5,010 and tops out at €6,000.
Beyond civil service pay, the Federal Employment Agency reports that the median gross monthly salary for full-time employees across all sectors rose to €4,217 in 2025 — a 5.1 percent increase year-on-year. The care sector posted particularly strong growth. Skilled geriatric nurses earned a median of €4,438 in 2025, a jump of 54 percent compared with 2018. That trajectory now puts nursing pay ahead of wages in the metalworking and electrical industries.
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