Why do I need to know my salary expectation when I apply? This is way to early… and, why, doesn’t the company provide an information how much they are willing to offer for the position?

When you start getting ready with your first applications in Germany, suddenly you read in one of the job advertisements: „Please tell us your salary expectation.“

This is a nasty thing, because probably you’re happy you’ve found an interesting position … and want to take your chance … and suddenly you hit the ground hard: You have to decide on a certain number. This is … well, uncomfortable. Or you get the creeps, feel anxious…

These are the fears every applicant has

What if … I’m asking for too much of a salary? Will they laugh at me? Or maybe they won’t invite me at all? Many anxieties are connected with this topic.

When it comes to salary, there is the following rule in Germany – just like in many other countries: Employees are not paid the same. I will say this again because it’s something so incredibly important:

Just because the employees work on the same level, *doesn’t mean* that they also get the same money!!!! Imagine that your colleague receives only 200 EURO more pay per month. That’s at minimum 2,400 EURO per year and over 5 years that’s at the very least a 12,000 EURO difference in salary. This is a lot and adds up quickly.

Just because employees of a company work on the same level, doesn’t mean they get the same money.

Imagine your colleague receives ‚only‘ 200 EURO more pay per month. That’s at least 2,400 EURO per year and over 5 years that’s at least a 12,000 EURO difference in salary. This is a lot, and it adds up quickly.s that fair? Why, yes I believe it is. Because compensation is based on performance.

It’s helpful to look at how a company sets the salary for a new position. Namely, by a range consisting of a bottom and a maximum. If you are new to the company, then it is your goal to hit the ceiling if possible. And basically, the company will be willing to give you this amount if you can prove that your profile matches the position very well. And you have the aptitude, the qualifications, and the personality.

How do you go about it?

If you want to get your salary as close as possible to the upper limit of the possible range that the company has already budgeted for anyway, then your application is the foundation. – Will the manager automatically pay you the upper limit? No, of course not. If you’re happy with less and believe you’ve hit the jackpot, why would they pay you extra?

That’s the reason why it makes sense, in and of itself, to express a bold salary expectation. It signals confidence in your own performance. However, you must then also deliver an absolutely convincing presentation of your performance. Your profile has to be an excellent fit, convincing and easy to understand. This is where your CV comes into play again.

Just stating a high salary expectation, but then having an unconvincing profile and CV is a no go.

A few tips for setting up your salary expectation if you are not familiar with the EURO

If you are a Newbie in Germany, you might not have any feeling for the EURO yet. Maybe you are still translating from Indian rupees, from rubles to EUR or some other currency. In this case case you might be emotionally shocked at how expensive things are in Germany.

Or, this is probably just as true, you’ll be totally impressed with how high certain salaries in Germany are. And then this seems so high to you that it wouldn’t matter so much if you got a few thousand more or less, right? Please watch out, as prices are relative – and wages and salaries are relative too.

It’s important for you to be aware of this misconception in the beginning and not miscalculate. Also, Germany is not a golden country, many Germans do not earn very much and struggle to make a living.

Twenty years ago… In 2002, the EURO was introduced, and I remember how strange that was. We traded in the D-Mark for the EURO, and that may have made economic sense. But emotionally it was difficult…. many Germans loved the D-Mark, it was a currency of one strong nation’s economy. It accompanied our country after World War II, from a time when Germans didn’t know where to get the butter for their bread…. to an unforeseen state of prosperity.

The DM was really loved, and we just didn’t want to part with it.In the beginning, when we already had the EURO coins in our wallets, we still calculated in DM and changed from DM to EUR and back again and again. And we were all firmly convinced that suddenly everything was more expensive. If you ask me, I would probably bet a case of champagne that prices in Germany also went up because of the EURO. Food, in particular, was much more expensive. I had the feeling that everything was suddenly much more expensive. The conversion rate of 1 EURO was equal to 1.95583 DM. But this has been researched and smart scientists say today that this is a misconception. The fact is that the new currency did not make prices more expensive. But, again, food has become more expensive….

Anyway, we have been calculating with both currencies for a long time. This can be quite confusing, plus it can be easy that you have simply haven’t developed that intuition yet. You definitely want to avoid that when it comes to how much you’re going to be paying. You have to figure out how much of a difference there is between 43500 and 44800 euros – and what that will mean to you, in practical terms. How this small difference will have an impact on your life and your future. After all, when it comes to the job interview later on, and the discussion about your salary, these differences really do make a big difference.

This is why my tip for you is to get familiar with the EUR, with the buying power it has, as well as with the amount you might need.

List your salary expectation as annual gross amount

By the way, it’s always the annual gross. Always.

Just very briefly once again on gross and net. Let’s define again what that actually is – because mixing it up in the salary interview or in the cover letter is no fun.Just to remind you again, what is gross and what is net.

The gross is the amount you negotiate with your employer.

At the end of the month, by the time the employer prepares the payroll, the social insurance contributions of various kinds are deducted automatically. Your health insurance is paid off automatically, your taxes are sent directly to the government, the amount you contribute to retirement is transferred automatically to the pension fund, etc., and your gross salary is reduced by these contributions (and net is the amount that then arrives in your account). However, the amount of social contributions deducted varies from individual to individual (e.g. married or not) and your employer has nothing to do with it.

The annual gross is the sum that your employer needs to include in the annual budget for you. That’s the only number that counts for him.

You just need to keep in mind, that the brutto yearly sum includes your monthly salary, BUT it also includes more! For example, when companies pay you a vacation bonus or sometimes a Christmas bonus. And it’s this annual gross total amount that’s meant when companies talk about salary expectations.

Which factors influence the salary expectation

Now, in Germany we don’t talk about salaries, neither the company nor the employees. Therefore, you will hardly be able to read on the Internet that a Key Accaunt Manager at Audi gets the amount xy amount per year.

That’s why we have to do research – and let me tell you that it’s work and takes time. Because salaries vary widely, even for a very similar position.

Let’s assume you’re a young engineer looking for a position after getting your master’s degree. Then your salary will be higher in large cities and metropolitan areas than in rural areas. Also, some industries pay more than others, and often it is often said that bigger companies pay more than smaller ones. However, this is often compensated for by very individual additional offers and flexible working conditions that employees in corporate structures can only dream of.

Another factor ist, that the more duties and responsibilities are associated with the position, the more it will be paid. And naturally, the more qualified you are and the more you can be productive for the job, the higher the pay.

The most important factor though of all is: Your compensation is highly dependent on whether the recruiters, HR and technical manager actually SEE your suitability for the position.

I see a lot of resumes or CVs because some graduates, and very experienced professionals, are totally frustrated in their job search – because no recruiter contacts them – or because they feel odd that as a Master in Computer Science they are hardly offered a salary that would entitle them to a Blue Card.

If I didn’t know better, I might think that sometimes candidates seem to make more of an effort to HIDE their special talents and extraordinary gifts than to SHOW them. For fear that they will make a mistake. No, of course this is nonsense and I know that it takes lots of time to develop an understanding what recruiters want to learn about a candidate and what psychological effect certain information will have. However, if this it the case than it’s to their disadvantage, as they miss the chance to highlight their unique combination of points and thus confidently signal „Hey, take a look at me and my profile. I’m very much an applicant who has already accomplished a great deal of what you as a company needs..“

How to find out what salary expectation to give?

In essence, you can do this in two ways: Either you search the Internet for statistics, information and estimates. Or you ask friends, colleagues or other professionals at your level and in a similar position and company.

How to find salary expectations in the internet?

There are statistics on the Internet, from all kinds of providers. You have to check though where they get their data from. And how reliable you think they are. In this respect, I am always skeptical and check the source twice.

The salary data we get is always highly individualized. It’s always an average value. For me, I always keep getting back to this weird professor who taught us in one of the statistic lecture who taught us: averages is, when you have one foot on hot coals and the other on ice, the temperature is comfortable on average!

#1 The Entgeltatlas of the Agentur für Arbeit (the salary atlas of the Federal Employement Agency)

In the Salary Atlas of the Federal Employment Agency you can look up average values by occupation or position. Separated by German federal state, probably the most important information. Almost always, larger cities pay more than rural areas. (However, housing and living costs are then also significantly more expensive there.)

Screenshot of website Bundesagentur für Arbeit
The „Entgeltatals“ is an official portal of the German Unemployement Agency (Agentur für Arbeit). They have some information in English, but not yet the Entgeltatlas.
Screeshot Entgeltatlas how to start with keyword
Start with „Sucheingabe Beruf“: Insert the name of your profession, qualification or domain. In the pic above I started with „data“, and the systems shows me all profesions that are connected with this term. My Tip: Save your own list of German terms for different professions, you want to learn the terms and keywords to help you find your ideal job vacancies while searching the portals.
Screenshot of Average Salary for a Data Scientist
These are the figures of the median monthly gross compensation (median), for a SENIOR Data Scientist. Please keep attention to the fact that it has a huge! wide! range depending an individual factors. More than 90% of all vacancies in Germany require fluent German language skills.
Map of Germany, different salaries per region
Salaries within Germany can vary widely. The important fact to bear in mind is that rents and other costs of living likewise diverge significantly.

#2 The portal Glassdoor

Glassdoor (glassdoor.com) is an American Job Portal which is very popular in Germany as well. But it’s not only a regular job portal, but also a a treasure chest for salary information.

You pay for the information you need by registering and offering your personal data. If you’re in a job right now, they want you to specify company, position and salary to enrich their existing data. Then, you’re admitted access to information about salaries. The portal is in English language, and I’m positive you find your way ‚round.

Asking friends & peers or professionals

Please don’t add up to the German bad habit not to talk about salaries. It’s stupid and a huge obstacle for employees.

Asking professionals what they earn is the most reliable source there is. Because you can keep in mind all the specific factors that influence salary, like age, domain, years of experience, responsibilities and language skills.

The only issue there is that we tend to exaggerate. Always and especially when it comes to something as important as salary when we long to be seen as big, powerful and well paid by our peers.

Also, what a fellow student earns may not be of any help to you because you had completely different fields of study and the companies are not comparable. Even if you work in one company, maybe even in the same position, everyone’s performance can be very different. Again, because it explains all the many differences in salary, the rule is that the individual’s performance is being rewarded.

Age is not that relevant, whether man or woman may also not matter, and whether someone is German or from Africa or Asia is also irrelevant. It is and should be the individual performance that determines compensation.

Where does the salary expectation appear in the cover letter?

This is easy, as it’s always at the same place. The ´salary expectation belongs in the cover letter in the last paragraph.

The salary expectation appears always at the end of the cover letter. In the last sentence – so this is simple. We really don’t have to be creative here. One phrase you may use ist:

“ Based on my qualifications and knowledge, my salary expectation is 42,360 euros per year.“

„Meine Gehaltserwartung liegt gemäß meiner Qualifikation und Erfahrung bei ca. 42.360 EUR im Jahr“

Wrap up

For yourself and your career plans it is essential to have a realistic salary expectation.
It’s by all means no trivial. But the good thing is that you don’t need to state a salary expectation at all in the cover letter without a request.

Stay moderate in the wording of your salary request. Keep in mind that your salary expectations are also in competition with other applicants. If you state a figure far below your own market value, personnel officers will either think you are naive, a newcomer to Germany, or perhaps not confident of your market value. In such a case, your low salary expectations cannot be considered a competitive advantage. Talk with your peers about salary and be an open learner when in your job search you’ll learn more and more to clarify your expectation.

All the success and luck to you!