Net salary: Merz government wants new taxation – it affects millions of workers
Germany’s government under Chancellor Friedrich Merz is considering a new tax rule that could benefit employees who work particularly long hours. The proposal aims to encourage more people to increase their working time amid concerns about labour shortages.
The idea is part of broader reforms planned by the schwarz-rote Koalition (black-red coalition), formed by the CDU/CSU (Christian Democratic Union/Christian Social Union) and the SPD (Social Democratic Party). The government has already announced plans for tax relief and labour market changes designed to strengthen Germany’s economy.
Under the proposed approach, employees who voluntarily work more hours could receive tax advantages on additional income. Supporters argue that the measure could motivate more people to take on extra work and help companies struggling to find qualified workers.
The plan comes as Germany faces major demographic challenges, with an ageing population and growing shortages of workers in many industries. The government says increasing employment incentives is necessary to maintain economic growth and secure social systems.
However, critics warn that tax incentives for longer working hours could create unfair pressure on employees and may not solve the deeper problems behind Germany’s labour shortage. Trade unions and opponents argue that better working conditions, higher wages, and improved family support are also needed to attract more workers.
The proposal is still being discussed and would require further political approval before becoming law. It is part of a wider reform package announced by the Merz government, which includes changes to taxes, pensions, employment rules, and bureaucracy reduction.