Excerpted from the Germany Career Guide
Cost of Living
Germany is Europe's largest economy and the world’s fifth largest. It is Europe’s second most populous nation after Russia. Although the economy has fared better in recent years than those of other European countries, economic growth remains relatively flat, projected to grow 1.1 percent this year, according to the OECD (Organisation for Economic Co-operation and Development).
On the other hand, unemployment has dropped to less than 5 percent, significantly below both the EU and OECD averages. And workers’ average wages have shown steady growth over the last eight years, reaching 3,449 EUR per month.
In spite of recent spikes in cost of living, the country is relatively affordable.
As in most countries, prices for housing in Germany are highest in major cities, such as Dusseldorf, Stuttgart, Frankfurt, Cologne, Munich, Hamburg and Berlin.
Demand outstrips supply in these urban areas, and rents can be quite expensive, which is why housing remains expats’ largest expense in Germany. In fact, expats must often spend up to half of their income on housing in Germany.
Germany has an impressive public transportation system; those who prefer not to drive will not need to. Expats living in one of Germany’s major cities such as Berlin, Munich or Frankfurt won’t really need a car for traveling within the city.
In fact, Germany’s urban and rural regions are all connected by an impressive and reliable array of trains, subways, trams and buses. For those who prefer to drive, Germany is also home to the third-largest expressway in the world, the Autobahn. Air transportation is also becoming more affordable.
Income taxation is based on whether an employee is a resident or a non-resident of Germany. Residents are taxed on their worldwide income, and non-residents are taxed only on their German sourced income. Typically, expatriates are residents of Germany if they live in the country for at least six months.
This is just a short sample of what you’ll find in over 100 pages of information in the complete Germany Guide.