At the end of 2025 one of the most significant labour market changes of recent years is imminent. With effect from 1 January 2026 the next stage of the statutory minimum wage increase takes effect. For companies this means not only higher hourly rates but noticeable consequences for mini-jobs, midi-jobs and the whole of staff and budget planning. Engaging with the new framework early is what makes it possible to enter 2026 prepared, legally and financially.
How the decision came about
The adjustment of the minimum wage has been the subject of intensive political and economic debate in recent months:
- Supporters stressed the need for fair pay that covers the cost of living.
- Critical voices warned of rising wage costs, particularly in labour-intensive sectors, and of the effects on competitiveness and employment.
There was also the question of whether the minimum wage should be set politically. The proposal by the Federal Minister of Labour, Hubertus Heil, to raise it to EUR 15 an hour would have weakened the role of the Minimum Wage Commission considerably. In the end the statutory system prevailed: the adjustment was made on the recommendation of the independent commission, taking labour market and economic data into account.
The new stages
On the basis of the Minimum Wage Commission’s decision of 27 June 2025, the following stages apply:
Minimum wage · Germany
EUR 13.90 from 2026
The statutory minimum wage rises in two stages — first by 8.42%, then by a further 5.04% the following year.
Statutory minimum wage per hour
Decision of the Minimum Wage Commission of 27 June 2025
- from 1 January 2026: EUR 13.90 an hour (+8.42%)
- from 1 January 2027: EUR 14.60 an hour (+5.04% against 2026)
These increases affect employees on low hourly rates directly — mini-jobbers, part-time staff and employees in the transitional band in particular.
Mini-job and midi-job compared
Mini-job
- The monthly earnings threshold continues to follow a working week of 10 hours at the minimum wage.
- Flat-rate charges for the employer, a low burden for the employee.
- As the minimum wage rises, the permitted monthly threshold rises automatically.
Midi-job
- Earnings above the mini-job threshold up to a maximum of EUR 2,000 a month.
- Progressive social security contributions, increasing with income.
- Income tax is calculated according to the individual tax class.
The transitional band becomes more important with the minimum wage increase, particularly for flexible working time models.
| Year | Minimum wage per hour | Mini-job threshold per month | Midi-job band per month |
|---|---|---|---|
| 2026 | 13,90 € | 603 € | 603,01 € to 2.000 € |
| 2027 | 14,60 € | 633 € | 633,01 € to 2.000 € |
The table shows how the earnings thresholds move with the minimum wage and serves as a basis for sound staff and cost planning.
What companies have to adjust now
The minimum wage increase calls for concrete adjustments in several areas:
- Employment contracts: review the hours and the monthly remuneration.
- Payroll: reflect the new thresholds correctly, particularly in the midi-job band.
- Budget and cost planning: allow for higher staff costs including special and year-end payments.
- Reducing risk: avoid back payments, contribution corrections and fines by acting early.
Conclusion
With the minimum wage rising to EUR 13.90 from 2026 and EUR 14.60 from 2027, key thresholds shift:
- Mini-job thresholds: EUR 603 (2026) / EUR 633 (2027)
- Midi-job band: EUR 603.01–2,000 and EUR 633.01–2,000 respectively
Companies would do well to review and adjust employment contracts, payroll processes and budgets before the turn of the year 2025. Structured preparation not only secures statutory compliance but creates planning certainty for the coming financial year.