Does It Make Sense To Move To Munich From A Smaller German City?

I am living in a mid-sized German city with my family. Recently I got a job offer from a Munich base company. In this post, I evaluate whether is it worth financially to move to Munich from a smaller German city? I evaluate the net salaries for both cities as well as the rental cost to show that a higher gross salary does not always mean a higher final income.

ian kelsall / Via unsplash.com

The big question

A Munich recruiter recently contacted me. He offered me a position at a software development firm. He said they are forming a team for a new project and that my profile on Linkedin was ideal for them. He offered €5,500 salaries for a six-month probation period, then €6,000, if everything goes well.

And now the questions are: (1) Is €6,000 a competitive salary in Munich? (2) Does it make sense to move from Brunswick (Lower Saxony) with a salary of €5,000 to Munich (Bavaria) for a salary of €6,000 with my family?

Let's figure it out!

In Germany, the two biggest expenses for expats are taxes and rent, while you can't control the taxes, you can control where you live, and up to a certain level how much do you pay for rent.

Salary

arbeitsagentur.de / Via web.arbeitsagentur.de

Salary map

The gross salary across the german states and cities are varying greatly. Analyzing the Entgeltatlas published by the Bundesagentur für Arbeit shows that my €5,000 gross salary is actually above the median salary of the state of Lower Saxony. The same is true for the state of Bavaria, the offered salary of €6,000 would be more than €300 above the median salary. When I check it in Munich, the offered salary would still be above the median, but only by €100.

So yes, the offered salary is actually competitive for my case.

Gross salary to net

If you are single, you will be in tax class I. However, in my case, because I am married and I earn more than my wife, I am in tax class 3 and my wife is in tax class 5. Based on this gross net salary calculator, after deducting taxes on the €5,000 gross salary, I will have a net salary of €3,440 in Brunswick. In Munich I would end up roughly with a net salary of €4,069 will be left, down from €6,000. It is roughly a €600 monthly income difference. Note that the choice of tax class is only important for withholding tax, and therefore for immediately disposable income. Tax refunds are not affected by the choice of tax class after an income tax assessment is made a few months after the end of the tax year. So after submitting the tax declaration we might end up with less money.

Apartment

zeit.de / Via zeit.de

The second big expense for an expat in Germany is the rent. Appartments prices across Germany vary greatly. The cheapest is in Eastern Germany, while the most expensive is in Munich: (1) A 100 square meter apartment outside of center Brunswick would be €840. (2) The same-sized apartment outside of center München would be €1,855, which is more than double of the apartment in Brunswick. Even if you move out of Munich, on average the 100 square meter apartment would be around €1,400.

Let's make the calculation: after paying the rent in Brunswick, €2,600 will remain, in Munich this would be €2,214. The difference is almost €400 between the two cities. The salary increase of €1,000, in fact, does not give anything financially, actually, we would end up with less disposable income in the end. On top of that, it would come other difficulties, such as the cost of moving and realtors, finding flats and physicians, the availability of kindergarten places, the distances between jobs and schools, etc. Even adding another €500 to the top net will not make Munich comparable to Brunswick in terms of comfort. We now have a neighboring school and kindergarten. It takes me 15 minutes to go to work on my bike. The region is quiet and well-kept. There is always free parking. There are several shops within walking distance. It takes 2 kilometers to get to the city center. Parks, lakes, and playgrounds are all close by. Just perfect for a family and biking.