Minimum Wage Increase from 2026
What Companies Need to Know About Mini-Jobs and Midi-Jobs
As 2025 draws to a close, one of the most significant labour market changes of recent years is about to take effect. From 1 January 2026, the next stage of the statutory minimum wage increase will come into force in Germany. For companies, this development does not only mean higher hourly wages, but also direct implications for mini-jobs, midi-jobs and overall personnel cost planning. Early preparation is essential to enter 2026 in a compliant and economically sound manner.
Background: Minimum wage between social policy and economic pressure
In recent months, the adjustment of the minimum wage has been the subject of intense political and economic debate:
- Proponents emphasised the need for fair and adequate pay for work performed.
- Critics warned of rising labour costs, particularly for labour-intensive sectors, and potential impacts on competitiveness and employment.
At the same time, the question arose as to whether the minimum wage should be set directly by the government. The proposal by Federal Labour Minister Hubertus Heil to increase the minimum wage to €15 per hour would have significantly undermined the role of the Minimum Wage Commission, which is legally mandated to make recommendations based on economic and labour market data. Ultimately, the established procedure prevailed, and the adjustment was implemented following the Commission’s recommendation.
New minimum wage levels and timeline
Based on the resolution of the Minimum Wage Commission dated 27 June 2025, the following stages apply:
- From 1 January 2026: €13.90 per hour (+8.42%)
- From 1 January 2027: €14.60 per hour (+5.04% compared to 2026)
These increases directly affect employees with lower hourly wages, particularly mini-jobbers, part-time workers and employees within the transitional earnings zone.
Impact on mini-jobs and midi-jobs
Mini-jobs
- Monthly earnings limit continues to be calculated based on a 10-hour working week at the statutory minimum wage.
- Flat-rate social contributions for employers and minimal burden for employees.
- As the minimum wage rises, the maximum permissible monthly earnings increase automatically.
Midi-jobs
- Monthly income above the mini-job threshold and up to €2,000.
- Progressive social security contributions, increasing with income level.
- Income tax calculated according to the individual tax class.
The transitional earnings zone continues to gain relevance, particularly for flexible working time models.
Overview: Mini-job and midi-job thresholds
| Year | Minimum wage (€ / h) | Mini-job limit (€ / month) | Start of midi-job (€ / month) | End of midi-job (€ / month) | Hourly increase |
| 2025 | 12.82 | 556 | 556.01 | 2,000 | – |
| 2026 | 13.90 | 603 | 603.01 | 2,000 | +8.42% |
| 2027 | 14.60 | 633 | 633.01 | 2,000 | +5.04% |
This overview illustrates the dynamic adjustment of income thresholds and supports reliable personnel and budget planning.
Practical implications for employers
The increase in the minimum wage requires targeted adjustments across several areas:
- Employment contracts: Review of working hours and monthly remuneration.
- Payroll processing: Accurate application of the new thresholds, particularly within the midi-job range.
- Budget and cost planning: Consideration of higher personnel costs, including bonuses and year-end benefits.
- Risk management: Early implementation helps avoid back payments, contribution corrections and penalties.
Conclusion: Action required before the year-end
With the minimum wage increasing to €13.90 in 2026 and €14.60 in 2027, key thresholds are shifting:
- Mini-job limits: €603 (2026) / €633 (2027)
- Midi-job income range: €603.01–€2,000 / €633.01–€2,000
Companies are well advised to review and adjust employment contracts, payroll processes and budget planning before the end of 2025. A structured approach ensures legal compliance and provides planning certainty for the upcoming business year.
If you have further questions, our accountants will be happy to provide you with personal advisory. Additionally, we are available to advise you throughout France and Germany by phone and video conference. Your Franco-German tax consultancy FRADECO.
Disclaimer
Although the greatest possible care has been taken in the preparation of this newsletter, we reserve the right to make changes, errors, and omissions. The abstract legal presentation in this newsletter is no substitute for individual civil and tax law advice on a case-by-case basis. Subsequent changes to the legal framework, the views of the German or French tax authorities or case law, including with retrospective effect, are possible.
