The cost of living in Germany

Germany is renowned for its high standard of living, efficient public transport, excellent healthcare, and a high-quality education system. Indeed, Germany ranks above average in the OECD Better Life Index in terms of quality of life and well-being. Yet, despite these high standards, shopping bills in major German cities are often significantly less than in other major European cities.

The cost of living in Germany naturally depends on your lifestyle and the city or area you live in. For an overview of the costs of living in Germany, this article covers the following topics:

Wundertax

Rethink the way you do your tax returns with Wundertax. Their easy-to-use website guides expats through every step of the German tax return process, giving you more time to explore your new home. For simple and intuitive help in English, use Wundertax for your tax returns.

Go to website

The general cost of living and standards of living in Germany

According to the Federal Statistics Office, households spend an average of €2,623 per month, allocating €966 to housing, energy, and maintenance. In addition, most Germans spend around €402 on groceries, €322 on transport, and €255 on leisure per month.

In 2022, two cities in Germany featured in the top 30 cities of Mercer’s Cost of Living City Ranking: Munich (33^rd) and Berlin (46^th).

Germany considers those living alone who earn under €15,009 per year to be at risk of poverty. This amounts to around 16% of the population. Women are slightly more likely to earn below the poverty threshold than men. Other groups that make under this amount include single parents and people experiencing unemployment. In 2021, 2.6 million people (3.2% of the population) also did not have enough money to heat their homes.

Cost of living in Berlin

Berlin is one of the best-value capital cities to live in in Europe, although it is becoming more difficult to find reasonably priced housing. This is particularly the case in popular and central neighborhoods while living costs are typically lower in Berlin’s suburbs.

According to Numbeo, the cost of living in Berlin is estimated to be:

• 59% more expensive than Warsaw
• 79% more expensive than Istanbul
• 136% more expensive than Damascus
• 7% more expensive than Rome
• 84% more expensive than Lagos

Cost of living in Munich

The cost of living in Munich is among the highest in Germany, although the city offers many facilities as the capital of Germany’s southern state of Bavaria.

Munich’s cost of living is estimated as:

• 40% more expensive than Zagreb
• 86% more expensive than Istanbul
• 11% more expensive than Rome
• 21% more expensive than Athens
• 86% more expensive than Sarajevo

Cost of living in Hamburg

The second largest city in Germany, Hamburg has a population of around 1.8 million inhabitants. Its cost of living is roughly:

• 78% more expensive than Istanbul
• 53% more expensive than Sofia
• 59% more expensive than Warsaw
• 6% cheaper than London
• 130% more expensive than Kabul

Cost of living in Heidelberg

Heidelberg is a city that revolves around the university and scientific research, while also a favorite among visitors for its riverside location and historic town center. Living in Heidelberg offers a mix of old and new.

According to Numbeo, the cost of living in Heidelberg is estimated to be:

• 6% more expensive than Vienna
• Around the same as Rome
• 42% more expensive than Beijing
• 156% more expensive than Mumbai
• 122% more expensive than Damascus

The cost of living in Germany, however, varies significantly between major cities and rural towns. For example, consider the cost of living in the following cities in Germany:

• Cologne
• Düsseldorf
• Stuttgart

German wages and salary

The average gross household income in Germany is €4,979 per month. When considering households of single people, this is €2,264, with single men earning on average more than single women. In the west of the country in 2022, men earned 19% more than women. In the east, the difference was 7%.

Working

The minimum wage and average salaries in Germany

Read more

Germany’s minimum wage is €12 per hour, so working 40 hours per week, you will earn a gross monthly salary of €1,987. This makes Germany the country with the second-highest minimum wage in the European Union after Luxembourg.

The cost of housing in Germany

General housing costs in Germany are relatively high but vary considerably depending on the type of property you choose and the area you live in. Some locations offer better deals, for example, suburbs around Berlin. There are no restrictions on expats buying property in Germany.

Rental costs

Most expats rent in Germany. When looking for rental apartments, it is essential to understand the terminology in advertisements. For example, if an apartment is advertised as four rooms, it will feature two bedrooms, a living room, and a dining room. Kitchens, halls, and bathrooms are not classified as rooms.

The most expensive German cities to rent are Munich, Frankfurt, Berlin, Düsseldorf, and Hamburg. On the other hand, the lowest housing costs in Germany are in Bremen and Leipzig. Below is an idea of average monthly rental costs for a 1–bedroom apartment in the city center:

Renting in Berlin is much cheaper than in other capital cities in Western Europe; the average rent is lower than Paris, London, Amsterdam, Brussels, and Copenhagen.

Rent charges are paid each month. Utility costs, television, broadband, and waste disposal are typically charged separately. For more information, read about renting in Germany. You can also find short-term, serviced, and student housing on the following portals:

• Airbnb
• Homelike
• Spotahome
• Wunderflats

Property prices in Germany

The cost of buying property in Germany varies wildly. Generally, Bavaria is significantly more expensive, with the same house in Bavaria costing up to three times as much as neighboring southern cities. In Munich, for example, the median price for a property is around €11,000 per square meter.

In general, buying an apartment in the center of the following major cities is around:

Cost of domestic bills in Germany

Utility bills

According to Eurostat, Germany has the third-highest household electricity prices (€0.3279 per KWh) in the European Union, behind only Belgium (€0.3377) and Denmark (€0.4559). However, the average German household does use less energy than some other countries in Europe.

Utility bills in Germany are sent quarterly. For an 85 square-meter apartment, average monthly utility costs – including water, gas, electricity, and waste disposal – are around:

Like in many other parts of the world, Germany’s utility bills for gas and electricity are changing due to the transition to renewable energy. Although renewables may reduce utility bills, green taxes could mean you end up paying more.

Telecommunications in Germany

In addition, monthly internet in Germany is around €25–50 depending on the package you opt for. Service providers also include a fixed landline charge. An additional living cost in Germany is the mandatory German television and radio license. Read about setting up your phone, TV, and internet for more information.

Healthcare costs in Germany

Expats living in Germany are required to take out basic German health insurance. The cost varies depending on age, coverage, and the health insurance company you use. Basic insurance for students starts at around €110. For employees, healthcare is charged at 14.6% of your gross salary.

Healthcare

The German healthcare system

Read more

Expats that are employed by a company can arrange to pay insurance premiums through a subsidized company insurer. Self-employed individuals should organize private health insurance.

In exchange, residents in Germany have access to subsidized or free healthcare in Germany.

Cost of public transportation in Germany

Public transport in Germany is of an exceptionally high standard and reasonably priced compared to transport systems elsewhere in Europe. This can help to reduce the burdens of the cost of living in Germany.

Prices range from €55–100 a month depending on the city in Germany. On average, a one-way ticket is €2.40–3.70, depending on the number of zones covered. InterCity trains sometimes have special offers. If you commute to work, you can buy a BahnCard for reduced rates. You can also use the BahnCard on buses.

Buses are slightly less expensive, but fares depend on the distance you are traveling. Typically, you pay bus fares when boarding the bus, although monthly travel cards cover buses as well. The public transport system is well-policed. Passengers without valid tickets face a fine starting from €60.

Owning a car in Germany is more expensive. Generally speaking, expats living in major cities like Berlin, Munich, Hamburg, and Frankfurt do not need to own a car other than for convenience. Recent fuel prices in Germany are €1.75.

Taxi tariffs start at around €3–5 but vary widely between cities. For example, fares usually begin at €4 in Berlin and Hamburg, €4.70 in Munich, and €3.50 in Frankfurt, Dortmund, and Cologne. Fares per kilometer range between €1.80 and €2.80.

Costs to study in Germany

There are numerous universities in Germany that rank in global listings of top universities. In addition, studying in Germany is free at some universities, boosting the country’s reputation as a student hotspot.

There is also a good standard of German education. Public schools in Germany do not charge fees and are a good option for expats with younger children if they can pick up the language quickly enough.

Education

Studying in Germany

Read more

The alternative is to send your children to international schools in Germany. Unfortunately, tuition fees are substantially more expensive, although they vary according to the institution’s prestige and the grade level of schooling.

Average costs start around €12,000 and become more costly as children advance through grades. Bilingual schools cost between €100–600 a month.

The cost of German childcare

Germany boasts an excellent childcare system, with certain cities offering daycare subsidies (more so in former East Germany, although it is becoming more common in the west).

The cost of childcare varies widely in Germany. State-owned childcare centers provide subsidized care according to income, and in Berlin, public daycare centers are free of charge. However, private and international daycare centers cost considerably more. On average, a private babysitter earns around €14 per hour.

Cost of food and drink in Germany

Groceries in Germany

Staple foods are not too expensive in Germany, although upmarket supermarkets such as Rewe and Tegut are more expensive. If you shop at Lidl and Aldi, you can save between 10 and 15%.

Germans generally spend 15% of their income on food, beverages, and tobacco. On average, a single-person household spends €200 per month on groceries; a couple will spend around €365, while a family of four spends around €520.

Restaurants in Germany

Dining out in Germany is affordable, although the highly cosmopolitan restaurants widely differ in price. A three-course meal for two people costs between €40 and €90, while a casual meal from Mcdonald’s costs between €8 and €10. Tips are not included in the bill and it is considered appropriate to tip 5–10% of the total amount.

Beer, wine, and spirits in Germany

German beer is available in various sizes, from the standard half-pint to two-pint tenets. A typical price for a 0.5l beer when drinking out is €4, while an imported of beer from a supermarket costs between €2.80 to €5.

A bottle of mid-range wine will set you back €5 from the supermarket, while medium-priced vodka costs €6.99–29.99 for a 0.7-liter bottle. Budget vodka costs around €5–9, depending on your supermarket.

Coffee in Germany

A cappuccino in Germany costs between €2 to €4, and is usually more expensive in the west of the country than the east. This is in line with the price of a cappuccino in neighboring countries, such as Austria, Belgium, or the Netherlands.

Leisure activities in Germany

Clothing

Clothing in Germany costs around the same as in bordering countries. For example, a dress from a chain store costs about €36. A pair of good-quality jeans costs about €79.

Sports memberships and accessories

Are you thinking about joining the gym in Germany? Membership of a sports club costs around €32 per month. Meanwhile, an hour’s tennis court rent costs around €20. If you want to save on monthly expenses by going for a walk or run, a pair of running shoes costs an average of €83. Alternatively, you can also pick up on a German sport to get exercising.

If movies are more your thing, you can pick up a cinema ticket for €9–15.

Taxes and social security in Germany

Residents in Germany pay personal income tax on worldwide income. In certain circumstances, there are other taxes to pay.

Married couples are taxed on a joint income. Germany’s income tax is progressive, rising from a basic rate of 14% up to 42%. In 2022, the first €10,347 is tax-free for single people. In addition, there is a solidarity surcharge of 5.5% of tax to aid costs of integrating former East German states. If you need help with filing your income tax, you can save time and effort with an online service such as Taxfix or Wundertax.

Social security contributions are high and account for a significant proportion of your wages. They include:

• Health insurance – 7.3% of your income
• Pension – 9.3%
• Nursing care – 1.525%
• Unemployment insurance – 1.2%

Your employer matches all of the above in social security contributions. However, several other surcharges might apply.

Assistance with living costs in Germany

Germany has a comprehensive system of benefits and financial assistance for those in need. If you are a habitual resident in Germany, you can claim social welfare benefits when necessary. For some of these, you will need to have paid insurance while employed. In addition, Germany has the following financial assistance available to reduce the cost of living:

• Social compensation – for those injured or disabled as a result of war and other state actions
• Benefits for accidents at work and occupational diseases
• Care benefits
• Disability benefits
• Family benefits
• Guaranteed minimum resources – income support for those who cannot support themselves
• Survivor’s benefit
• Unemployment benefits

Child benefit includes €219 per month for the first and second child, €225 per month for the third, and €250 for the third, and €250 each for any children after that. Parents can also receive an allowance for two to 14 months, depending on their situation.

Useful resources

• European Commission – information on social assistance in Germany
• Deutschland.de – facts and news about living, working, and integrating in Germany
• Federal Statistical Office – official data on Germany society, economy, and more