Berlin's Minijob Overhaul: Employers Sound Alarm as 7 Million Workers Brace for Tax-Free Status to End

A government commission proposes scrapping social security exemptions for 6.8-7 million marginal workers, with retail and hospitality warning of irreversible damage. Rising earnings thresholds and new opt-out rules also take effect.

A government-appointed commission wants to scrap the tax and social security exemptions for Germany's 6.8 million to 7 million marginal employees—a move that business groups say could inflict "irreversible damage" on entire sectors.

The Alterssicherungskommission (old-age security commission) published its final report on 23 June, containing 33 recommendations. The most sweeping: eliminate the special status that allows minijobbers to work without paying social security contributions. Under the proposal, only school pupils would be exempt; everyone else would contribute to social insurance normally.

Retail, hospitality and agricultural associations reacted swiftly. In an open letter to Labour Minister Bas and Health Minister Warken, trade federations including DEHOGA warned the plan would deal a "blow to the business location" that cannot be undone. The government is expected to decide on implementation this autumn.

Rising thresholds, rising costs

Separate from the abolition debate, the earnings ceiling for minijobs climbs automatically with the minimum wage. On 1 January the hourly floor rose from €12.82 to €13.90, pushing the monthly minijob limit to €603 in 2026. A further jump is already legislated: from 1 January 2027 the minimum wage will reach €14.60, lifting the cap to €633 per month, or €7,596 per year. The midijob transitional band will also widen, covering earnings up to €2,000 from 2026.

Employers are simultaneously facing a higher tax bill. The coalition committee decided in early July to raise the flat-rate levy on minijobs from 2% to 5%.

The Institute for Employment Research (IAB) calculates that each minijob will cost companies roughly €18 extra per month. For the federal budget, the move could yield between €500 million and €1 billion in additional revenue.

IAB researcher Ulrich Walwei criticised the package as half-hearted, arguing that core problems—weak pathways into regular employment and the crowding-out of full social insurance jobs—remain unsolved.

A one-time chance to reverse the opt-out

Since 1 July a practical change has taken effect independently of the bigger battle. Minijobbers who previously chose to opt out of pension insurance can now revoke that decision once during their employment. Earlier, the opt-out was irreversible for the job's entire duration. Now a simple written request to the employer suffices, and compulsory pension coverage starts the following month.

The rent commission had already recommended abolishing this choice entirely in the long run, aiming to strengthen retirement savings for low-wage workers.