Minijobs: What are they and what do I need to know?

To those of us that are used to full-time and overtime, it might sound fun to only have a ‘minijob’. But you can only have so much fun when you have mini wages.

The German minijob is a specific kind of employment whereby the employee earns no more than €450 per month.

The system was developed to allow companies to hire staff without the insurance obligations, making it easier for part-time workers to take on another side job.

A dead end or a stepping stone?

Over 7 million Germans work minijobs, and for most of these it’s their only source of income. Although the German model of geringfügige Beschäftigung (minor employment) is heavily criticised, its success from an economic perspective has led advocated to suggest the law be introduced in other European states.

Minijob overview

  • A minijob is any form of employment with an average monthly payment of no more than €450 (previously €400)
  • Minijobs are typically cleaning and waiting jobs, but can also come from agencies, startups and larger corporations looking for part-time professional help
  • 7.5 million Germans work minijobs (BfA statistics)
  • The majority of minijobbers receive less than €7 per hour (Boeckler)
  • 58% of Germany’s working poor (earning less than €5 an hour) work minijobs (Boeckler)

The pros

  • No insurance costs: Employer’s pay less health insurance for minijob employees, while the state covers the employee’s social and health insurance.
  • Before tax is after tax: Minijobbers with no alternative source of income pay zero tax on earnings up to €450.
  • Holidays and sick pay: Minijobbers have the same worker rights as other employees in Germany. That means the same rules apply on holiday pay, sick pay and maternity leave.

The cons

  • It’s not a stepping stone: Because of the cost of insurance, many companies and employees are reluctant to turn a minijob into a paid job. Unlike a paid internship, minijobs are often meant to stay minijobs.
  • Less pay: Aside from the cap of €450 per month, company minijobbers are typically paid a lower wage than their fully employed colleagues.
  • Turning unemployment into employment: Politicians often count minijobbers as regular working citizens to improve employment statistics. 

From minijob to maxijob?

Turning a minijob into a paid job is hard. Once an employee earns as much as €1 more than €450 on a monthly average, the employer is forced to cover your insurance costs.

As a result, the benefits of the minijob can also be an incentive against raises, bonuses or any additional sources of income.

Feature image: Need Work via Shutterstock / copyright: Oleg Golovnev

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