International outlook 2027: Salary trends to watch in Germany

Through our collaboration with Lurse, a specialist in German total rewards and a co-shareholder of MBWL International, we are pleased to share preliminary insights into the German compensation landscape.

The Canada-European Union Comprehensive Economic and Trade Agreement (CETA) has strengthened commercial and investment ties between Germany and Canada, increasing opportunities for organizations with operations or business interests in both markets. In this context, access to reliable compensation intelligence can help employers better understand evolving compensation practices and talent trends across markets, supporting informed workforce and reward decisions.

Here are four key findings that provide a clearer understanding of the salary outlook in Germany:

• The downward trend in salary increase budgets continues, with projected increases of 2.7% for 2027—0.2 percentage points lower than in 2026. Most organizations are keeping salary increases at or below last year’s levels due to the economic situation. Of the 2.7%, 0.3% is being set aside as the additional budget for promotions, performance, and retention-related measures.
• The strained economic situation is especially visible in the automotive sector and the chemical-pharmaceutical industry, which are reporting lower increases in 2026 compared to other industries.
• In 2026, the salary increase budgets of organizations bound by collective agreements and those not bound by such agreements are at a similar level, whereas, last year, companies with collective agreements had higher budgets overall.
• Despite postponement of the EU Pay Transparency Directive implementation (now expected in early 2027), organizations are beginning to take financial measures to close the gender pay gap. Additional budgets are expected to increase to systematically address these gaps.

For more information about the German outlook, please contact:

Philip Longpré
Partner, Compensation, Talent and Culture
plongpre@normandin-beaudry.ca

Joanie Couture-Bellerose
Principal, Compensation, Talent and Culture
jcbellerose@normandin-beaudry.ca