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I will start my first job as a software developer in a German company soon. Since I've never had a job before, I don't know much how salaries are increased if an increase is going to happen. I'm particularly interested in German companies and software development positions since there is a shortage of us.

My questions:

  1. Are there common/standard factors for salary raises? For example, say my salary is 3400€/month and a company is willing to raise my salary after 1 year of working for them, how much would I expect it to be? I mean giving the high taxes in Germany, an increase with 200€ or so is not going to make a difference at all at the end of the month. So I guess the raise factor should be higher.

    I believe German software companies tend to raise the salaries of software developers annually to keep their developers since there is a shortage of us and it's easy to find a higher paying job after one year of experience. It would be great if someone can point out how much the increase factors could be in 5 years period.

    1. I'm expecting to have my salary increased from 3400 to 4000€ by the end of my first year with them, and from 4000 to 5000 by the end of the second year. Is this a realistic expectation in the German software industry?
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    Why do you believe there is a shortage of software developers in Germany?
    – Brandin
    Jul 4, 2015 at 16:48
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    @Brandin it's a known fact.
    – Jack Twain
    Jul 4, 2015 at 17:29
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    @JackTwain: "known facts" have a way of being known, but not necessarily facts. Whether there is a shortage of "software developers" (which is a vast field) depends very much on each specific developer's skill set and location.
    – Stephan Kolassa
    Jul 4, 2015 at 17:59
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    unless you're really really good at what you do, your raise expectations are really overrated, was it for staying at the same place or switching jobs. Generally, people tend to consider that a 10% raise is a reasonable amount to start the salary negociation. You usually can't get much more than that. You probably don't want to neither, cause the more you get the more complicated it is to find another job with at least equal compensation.
    – Laurent S.
    Jul 6, 2015 at 13:11
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    Have you actually calculated this? At your salary, an increase of 200€ will not "not going to make a difference at all at the end of the month", it's 100€ more. That's hardly nothing (especially considering those taxes also pay yourhealthcare, etc.). For the record, I am a software developer in Germany and my raises have always been between 5 and 10%. Asking for 25% will make you seem very out of touch with reality.
    – YviDe
    Jul 7, 2015 at 10:10

1 Answer 1

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Employers in Germans will usually rather think in yearly than in monthly salaries, but let's stick with your monthly figures.

A raise from 3400 to 4000 EUR per month is a 18% raise, one from 4000 to 5000 EUR is a 25% raise. Overall, you are aiming for a 47% raise over two years. This is... ambitious. Since you are at the beginning of your career, you may indeed get a higher percentage raise than later on, but a raise of 47% over two years really looks unrealistic to me.

I'd rather expect something in the ball park of 300 EUR in both years, which would translate into 9% in the first and 8% in the second year. Compare this to the current almost-negative rate of inflation, and it's still a lot.

Yes, a lot of that will be eaten up by taxes. Then again, if you profited from a free university education that those taxes paid for, you at least don't have a crippling college debt.

You might be able to command more, of course, if you prove indispensable to your job. Or if you switch jobs. (But job tenure is usually longer in Germany than in the US, so someone who switches after only one year might be perceived as a quitter.)

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    to be honest I find it quite stupid for employers not to give large raises while we can just leave and find a higher paying job for the sake of getting a higher salary. I mean the cost of giving a large raise would be much lower for the employer/company than having to get a new developer! Because now I'm seriosuly thinking about leaving after gaining two years of experience or so! Because I can easily get 5000€/month after say 2 years of experience or so giving the industry situation. If I were the company I would just give a higher raise to keep their employees!!
    – Jack Twain
    Jul 5, 2015 at 16:36
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    @JackTwain you are assuming that the number of software engineering jobs where you can easily get 5000 eur per month with only 2y experience is widely available. In general that's a false notion many 'recent' college graduates have (mostly based on historical data). That might be true if you're exceptional and are actually able to prove it during those 2 years. But in that case your own employer will likely do something extra also, which might be something else than salary.
    – KillianDS
    Jul 6, 2015 at 8:02
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    @JackTwain: more training (both in terms of getting time allocated to it, and of your employer paying for it), sending you to conferences, a nicer environment with better offices, better hard- & software and/or a more interesting technology stack, more interesting career options (like moving into a management, sales or consulting role, if you want to), ... there are lots of things an employer can do for you that are non-financial.
    – Stephan Kolassa
    Jul 6, 2015 at 10:45
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    @JackTwain, it is more economical to give lower raises as not everyone will leave. That's just business. You are not a special snowflake who can't be replaced fairly easily. When you have more in depth experience and special skills that no one esle has, then they are more worried about retention. However, in any case, no company has the budget to give everyone raises at the level you think is appropriate. Expect 2-3% raises and be happy when you get more.
    – HLGEM
    Jul 6, 2015 at 17:33
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    The business doesn't care about your standard of living. They care about their budget and what you contribute to their bottom line. Very few people (less than 1% outside fo sales) contribute enough to warrant as large a raise as you want. In business the best way to get more than 2-3% is to get a new job or a promotion to a job with a higher payscale. Nobody gives raises at the level you think is good. Not to all employees. And at two years, you are not likely to be someone they feel needs the reward to be retained because your contribution to their bottom line is likely not that great.
    – HLGEM
    Jul 6, 2015 at 21:28

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