A monthly gross salary of EUR 4,500 is almost exactly the median full-time wage. In the private sector, however, such work costs the employer more than EUR 5,450, while after all deductions only around EUR 2,870 ultimately lands in the employee’s account. Anyone working for the state has almost EUR 3,250 left after taxes and EUR 350 for private health and long-term care insurance, and therefore significantly more than the actual net taxpayer.
This gap arises mainly because two social-security systems are financed differently through current income. Employees finance four statutory insurance branches with their own contributions and employer contributions. With comparable gross pay, civil servants acquire a different entitlement to sickness, unemployment and old age.
Labour costs more than the gross wage
For every employee in the private sector, it is not simply the gross salary that counts. The employer also transfers its half of the contributions to pension, health, long-term care and unemployment insurance. Based on the contribution rates for 2026, this amounts to a further EUR 952 in this case. The employer’s total cost is therefore EUR 5,452 – before levies, the employers’ liability insurance association and other personnel costs are added.
The employee personally pays around EUR 979 in this case. Of this amount, EUR 418.50 goes to pension insurance, EUR 58.50 to unemployment insurance, EUR 393.75 to health insurance and EUR 108 to long-term care insurance. After EUR 650.16 in wage tax, EUR 2,871.09 remains net.
The EUR 952 employer contribution does not appear on any payslip or in the employee’s account, but it is nevertheless part of the price of every worker. With a fixed personnel budget, the employer could pay more gross wages, create additional positions or leave a larger share of the value created with the employee without this cost block.
The four major statutory insurance branches are included for the employer contributions. The U1 and U2 levies, insolvency benefit contributions and employers’ liability insurance association contributions are left out because they depend on the company, industry and workforce structure.
Breakdown of the median gross wage
| Statutory insurance branch | Employee | Employer | Total |
|---|---|---|---|
| Pension insurance | EUR 418.50 | EUR 418.50 | EUR 837 |
| Unemployment insurance | EUR 58.50 | EUR 58.50 | EUR 117 |
| Health insurance | EUR 393.75 | EUR 393.75 | EUR 787.50 |
| Long-term care insurance | EUR 108 | EUR 81 | EUR 189 |
| Total | EUR 978.75 | EUR 951.75 | EUR 1,930.50 |
Four salaries make the difference clear
The Federal Statistical Office reports a median gross income of EUR 54,066 including special payments for full-time employees in 2025. That is approximately EUR 4,506 per month. The arithmetic average, by contrast, was EUR 64,441, or around EUR 5,370 per month. High incomes pull the average upward, which is why the median and the average are generally far apart.
The four cases use monthly gross salaries of EUR 2,500, EUR 4,500, EUR 5,500 and EUR 7,500. The first level represents a low income, the second the median. The third level of EUR 5,500 corresponds to the rounded average case, while EUR 7,500 represents a good income as the fourth level.
Civil servants have a different payslip
Under the usual conditions of civil-service law, civil servants are not required to participate in statutory pension and unemployment insurance. For federal civil servants, healthcare is provided through the benefit scheme and private residual-cost insurance. The federal government generally covers 50% of eligible expenses for a person entitled to benefits. For pension recipients, the assessment rate is generally 70%.
The civil-servant model assumes EUR 350 per month for private health and long-term care insurance. This amount is a calculation figure for the ongoing comparison; at the same time, example premiums for a healthy 35-year-old with 50% benefits can be significantly higher. Age, health, tariff, benefit rules and family status have the greatest influence on the actual costs.
The civil-servant tax is not calculated backwards from the employee’s net income. It is calculated using the same basic assumptions and without statutory pension and unemployment insurance, while EUR 350 for private insurance is deducted. This produces civil-servant net incomes of around EUR 1,872, EUR 3,247, EUR 3,872 and EUR 4,989 at the four levels.
Net comparison of the four levels
| Monthly gross | Employer cost for employee position | Employee net | Civil-servant net | Difference |
|---|---|---|---|---|
| EUR 2,500 | approx. EUR 3,029 | approx. EUR 1,769 | approx. EUR 1,872 | approx. EUR 103 |
| EUR 4,500 | approx. EUR 5,452 | approx. EUR 2,871 | approx. EUR 3,247 | approx. EUR 376 |
| EUR 5,500 | approx. EUR 6,663 | approx. EUR 3,383 | approx. EUR 3,872 | approx. EUR 489 |
| EUR 7,500 | approx. EUR 8,908 | approx. EUR 4,437 | approx. EUR 4,989 | approx. EUR 552 |
Both pay additional taxes when they shop
In everyday life, both civil servants and private-sector employees pay additional taxes. Spending of EUR 1,000 initially contains a tax share of EUR 159.66 at 19% VAT. Employees and civil servants pay the same amount for the identical purchase.
The difference lies in relation to income: after this purchase, EUR 1,871 remains for the employee in the median case and EUR 2,247 for the civil servant. For the employee, VAT corresponds to 5.6% of monthly net income, while for the civil servant it is only 4.9%. At EUR 2,500 gross and EUR 1,769 net, the same purchase takes up almost 9% of the account balance.
The basket of goods may contain further charges: electricity tax, energy tax, CO₂ costs, insurance tax, motor vehicle tax and excise duties. These burdens may not differ according to civil-servant status, but they affect the employee on a smaller available base because higher mandatory contributions have already been collected.
After a EUR 1,000 purchase
| Monthly gross | Employee net | Civil-servant net | Remaining after purchase: employee / civil servant |
|---|---|---|---|
| EUR 2,500 | EUR 1,769 | EUR 1,872 | 769 / 872 |
| EUR 4,500 | EUR 2,871 | EUR 3,247 | 1,871 / 2,247 |
| EUR 5,500 | EUR 3,383 | EUR 3,872 | 2,383 / 2,872 |
| EUR 7,500 | EUR 4,437 | EUR 4,989 | 3,437 / 3,989 |
The final price contains EUR 159.66 in VAT in all four cases. The absolute amount is the same, but its weight in the respective monthly budget is not.
Pension contributions do not create a personal balance
At EUR 4,500 monthly gross, the employee pays EUR 418.50 per month into pension insurance. The employer pays the same amount in addition. Together, that is EUR 837 per month. Over 40 years, this adds up to approximately EUR 401,760 paid into pension insurance – assuming that the gross wage and contribution rates remained unchanged.
This money is not held in a personal account at the pension insurance system for each citizen’s own retirement provision. Instead, it is transferred from contributors to recipients through the pay-as-you-go system. Ongoing contributions always finance today’s pensions; pension points are created for one’s own employment history.
The provisional average income in 2026 is EUR 51,944. One pension point is currently worth EUR 42.52 in monthly pension value. At EUR 4,500 monthly gross and 40 years with a constant income ratio, the simplified calculation produces around EUR 1,768 in statutory gross pension. At EUR 2,500, it is around EUR 982; at EUR 5,500, around EUR 2,161; and at EUR 7,500, around EUR 2,947.
Civil servants likewise do not build up a personal capital stock, but they have a differently calculated statutory entitlement. Under Section 14 of the Civil Servants’ Pensions Act, each year of pensionable service creates 1.79375% of pensionable salary. After 40 years, a maximum of 71.75% is possible. If the four gross amounts are assumed to be fully pensionable, the pensions range from around EUR 1,794 to EUR 5,381 gross.
This assumption is strict for the sake of comparability: the final level of salary is used for the entire calculation. Actual civil-service careers include promotions, part-time work, interruptions and possibly deductions. Nevertheless, the order of magnitude of the entitlement remains visible. The statutory pension follows the entire working life, while the civil-servant pension is more strongly oriented towards pensionable salary at the end of the career.
Employees have to close the gap from a smaller net income
The employee finances additional retirement provision from the amount left after mandatory deductions. EUR 400 per month for 35 years, with an assumed real return of 3% per year, produces approximately EUR 295,000 in the calculation. Fees, taxes and fluctuating prices are not included in this model calculation. The amount paid in is EUR 168,000. In the median case, this savings rate reduces ongoing employee net income from EUR 2,871 to EUR 2,471. The civil servant would have EUR 2,847 available after the same savings rate.
The statutory pension and civil-servant pension are claims against the younger generation or the net taxpayer. Personal retirement assets, by contrast, belong to each saver. They fluctuate, but can be inherited and used without a new political decision.
The complete calculation
| Metric | Low: EUR 2,500 | Median: EUR 4,500 | Average: EUR 5,500 | Good: EUR 7,500 |
|---|---|---|---|---|
| Employee gross | EUR 2,500 | EUR 4,500 | EUR 5,500 | EUR 7,500 |
| Employer social-security contributions | approx. EUR 529 | approx. EUR 952 | approx. EUR 1,163 | approx. EUR 1,408 |
| Employer gross cost for employee | approx. EUR 3,029 | approx. EUR 5,452 | approx. EUR 6,663 | approx. EUR 8,908 |
| Employee social-security contributions | approx. EUR 544 | approx. EUR 979 | approx. EUR 1,196 | approx. EUR 1,443 |
| Wage tax | approx. EUR 187 | approx. EUR 650 | approx. EUR 921 | approx. EUR 1,620 |
| Employee net | approx. EUR 1,769 | approx. EUR 2,871 | approx. EUR 3,383 | approx. EUR 4,437 |
| Civil-servant tax in comparison model | approx. EUR 278 | approx. EUR 904 | approx. EUR 1,278 | approx. EUR 2,111 |
| Private health/long-term care insurance for civil servant | EUR 350 | EUR 350 | EUR 350 | EUR 350 |
| Civil-servant net after tax and private insurance | approx. EUR 1,872 | approx. EUR 3,247 | approx. EUR 3,872 | approx. EUR 4,989 |
| Monthly liquidity advantage for civil servant | approx. EUR 103 | approx. EUR 376 | approx. EUR 489 | approx. EUR 552 |
| Difference between employer gross and employee net | approx. EUR 1,260 | approx. EUR 2,581 | approx. EUR 3,281 | approx. EUR 4,471 |
| Employee net as share of employer gross | 58.4% | 52.7% | 50.8% | 49.8% |
| Statutory employee social contributions: employee + employer / civil servant* | 1,073 / EUR 0 | 1,931 / EUR 0 | 2,360 / EUR 0 | 2,851 / EUR 0 |
| Employee contributions accumulated over 40 years | approx. EUR 261,000 | approx. EUR 469,800 | approx. EUR 574,200 | approx. EUR 692,683 |
| Statutory social contributions accumulated over 40 years: employee + employer / civil servant* | 514,800 / EUR 0 | 926,640 / EUR 0 | 1,132,560 / EUR 0 | 1,368,629 / EUR 0 |
| Private health/long-term care insurance for civil servant accumulated over 40 years | EUR 168,000 | EUR 168,000 | EUR 168,000 | EUR 168,000 |
| VAT in a final price of EUR 1,000 | EUR 159.66 | EUR 159.66 | EUR 159.66 | EUR 159.66 |
| Remaining after EUR 1,000 consumption: employee / civil servant | 769 / 872 | 1,871 / 2,247 | 2,383 / 2,872 | 3,437 / 3,989 |
| Statutory gross pension after 40 years | approx. EUR 982 | approx. EUR 1,768 | approx. EUR 2,161 | approx. EUR 2,947 |
| Civil-servant pension after 40 years | approx. EUR 1,794 | approx. EUR 3,229 | approx. EUR 3,946 | approx. EUR 5,381 |
| Difference in gross value of retirement benefit | approx. EUR 812 | approx. EUR 1,461 | approx. EUR 1,785 | approx. EUR 2,434 |
The financing logic is the criticism
The figures of course say nothing about whether a teacher, police officer, judge or administrative employee works productively. They do show, however, that employees and civil servants with similar gross pay face different ongoing deductions and retirement entitlements, with the advantages clearly lying at the state level.
For the employee, own contributions, employer contributions as part of labour costs and wage tax follow the gross wage. In the median case, around EUR 1,931 flows into statutory social insurance every month. If the statutory pension is later insufficient, additional savings must be made from the remaining net income.
Civil servants, by contrast, pay income and consumption taxes. Their pay is not burdened by the four statutory insurance branches, however. Sickness is regulated through benefits and private residual-cost insurance, and in old age the pension replaces the statutory pension.
From a liberal perspective, this distribution is difficult to justify. Employees bear visible contributions, hidden labour costs and the risk of having to close the retirement gap with their own money. Part of the income they earn is redirected into entitlements that do not become personal property. Civil servants retain a stronger state retirement entitlement, while the financing is shifted into the future.
A common basic safety net with a larger personal and inheritable retirement component would be more transparent. The state may reward special duties. But it should state the costs openly instead of leaving employees with higher ongoing charges and a weaker retirement entitlement.
Employees bear the greater risk
In the median case, the employee position costs around EUR 5,452, although only EUR 2,871 reaches the account. Over 40 unchanged years, this amounts to around EUR 926,640. In the simplified calculation, the statutory pension is nevertheless only around EUR 1,768 gross per month, while the civil-servant pension comes to around EUR 3,229 and is therefore considerably more lucrative.
For employees, this remains a bad trade: higher visible and hidden system costs, less freely available income and a weaker state retirement entitlement.
