The German Ministry of Labor plans new regulations for Midijobs starting from October 2022, among which a raise of the maximum compensation.
With a law issued in July 2019 the maximum compensation for Midijobs had already been raised from 850 to 1.300 euros. According to a new draft law, the compensation will be raised again in October 2022, in parallel with the increase of the minimum wage to 12 euros. This raise will involve both Minijobs, which will go from 450 to 520 euros a month, and Midijob, for which the remuneration will be brought to 1.600 euros a month.
Many employees opt for a Midijob instead of a Minijob, because of the limitations of time and salary that the second one entails. Minijobs involve short-term contracts and earnings cannot currently exceed 450 euros a month. Because of these qualities, Minijobs are very popular among students. Their limitations are nevertheless the reason why many workers prefer Midijobs. A Midijob contract involves the same rights granted by a full time job, such as holiday leave, minimum wage and payment in case of sick leave. Midijobs can therefore be considered as a transitional area (Übergangsbereich) between Minijobs and full time jobs.
Before the law that was issued in 2019, a transition to a Midijob did not make sense for every Minijob worker (Minijobber). The reason is that the higher income combines with higher social security contributions to pay (health insurance and retirement fund).
When the Midijob regulations changed in July 2019, the Midijobbers’ income increased. They were granted a 9,82 euros an hour minimum wage and they could work up to 132,38 hours a month. Their maximum monthly salary could, therefore, reach 1300 euros. Despite the income increase, the social security contributions are determined through methods that date to before the 2019 law. Midijobbers can consequently benefit from tax relief on social contributions. Employees that earn between 850,01 and 1.300 euros are the ones that benefit the most from the tax relief. The tax relief decreases with increasing salary in the transitional area.