There is now more money in the public sector – but how much?

After lengthy negotiations, the federal government, municipalities and trade unions have reached an agreement and have been able to reach a collective agreement. Around 2.5 million public sector employees will benefit from this.

Again and again, the last days, weeks and months have been marked by strikes, some of which paralyzed everything nationwide. But the tough back and forth between the federal government, municipalities and trade unions has paid off: they have been able to agree on a collective agreement. Interior Minister Nancy Faeser (52, SPD) is satisfied with Bild: "We have reached a good and fair collective agreement. The tax-free and duty-free payments quickly make themselves felt in the wallet. At the same time, we had to keep an eye on the tight budget situation at all times. We succeeded."

"With a volume of 17 billion euros, it is the most expensive collective bargaining agreement of all time," says Gerd Landsberg (70, CDU) of the German Association of Cities and Municipalities, according to Bild, and fears that financially weak municipalities will have to increase fees and taxes. But what exactly does the collective bargaining agreement mean, especially for employees in the public sector?

After the conclusion of the collective bargaining, indefinite strikes are probably off the proverbial table for the time being. (Symbolic image) © D. Kerlekin/Imago

After the collective bargaining agreement: The most important key points of the agreement

All sides involved were able to agree on certain key points, as the Norddeutscher Rundfunk (NDR) also wrote. These are as follows:

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• Voluntary payment of an inflation compensation premium of 3,000 euros, which is to be paid out in several stages. 1,240 euros are to flow into June, with a further 220 euros then flowing monthly from July 2023 to February 2024 (exempt from tax and social security contributions)
• From 01 March 2024: Increase in table fees by 200 euros, then by a further 5.5 percent. In total, an increase of 340 euros is to be achieved. Payments may therefore have to be adjusted
• 150 euros more for interns/trainees from 1 March 2024
• Duration of the agreement: two years

According to NDR, a total of more than 2.5 million employees are covered by the collective agreement for the public service (TVöD). These are employed, for example, as bus drivers, nurses or geriatric nurses, doctors or educators.

Calculation example according to the Federal Ministry of the Interior

Employees in pay group 5, level 1, currently receive a monthly salary of 2,576.29 euros (gross). This will only be increased by 200 euros (to €2,776.29). In a second step, this amount will be increased linearly by 5.5 percent (to €2,928.99) at the same time.

Employees in pay group 5, level 1, receive 352.70 euros or 13.7 percent more per month.

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Tax-free, as the inflation premium is supposed to be, are also four part-time jobs and their pay. In addition, with a few tips, you can ensure that at the end of the month there is more net left over from the gross.

After the collective bargaining agreement: Now there is more money in the public sector – but how much?

So there will be more money for public sector workers. How much more can be seen by looking at the following table (excerpt from Bild.de):

Thanks to this agreement, it is assumed that indefinite strikes are off the proverbial table for the time being.