Holiday Pay in Germany: Union Contracts Double Workers' Chances of Getting It

Study shows only 44% of German private sector employees receive holiday pay; unionized firms pay 73% vs 35% non-union. Wide gaps persist by region, gender, and company size.

In Germany’s private sector, whether an employee receives holiday pay often comes down to a single factor: membership in a collective bargaining agreement. According to a new study by the Wirtschafts- und Sozialwissenschaftliche Institut (WSI) of the Hans-Böckler-Stiftung, 73 percent of workers in unionised companies get the bonus, compared with just 35 percent in firms without a tariff contract — a gap of more than two to one.

Overall, only 44 percent of private-sector employees receive any holiday payment at all, a figure that has held steady from the previous year. But the broad average masks deep divides that are shaped by company size, region, and gender.

Size matters — but not as much as a contract

Large enterprises with more than 500 staff give 61 percent of their workers holiday pay. In medium-sized firms (100 to 500 employees), the share drops to 50 percent. Among small businesses with fewer than 100 employees, only 37 percent get the benefit.

Yet even in the largest companies, the share is still well below the 73 percent seen in tariff-bound workplaces — underlining the decisive role of collective agreements.

Regional and gender gaps persist

The study also finds a pronounced east-west split. In western Germany, 46 percent of employees receive holiday pay; in the east, just 33 percent do. Certain industries — including insurance, building cleaning, Deutsche Bahn, and the printing and chemical sectors — manage to bridge this gap, the report notes.

Gender inequality is also visible. Nearly half of male workers (49 percent) get holiday pay, compared with 38 percent of women.

From €186 to €2,904 — the range is enormous

At the low end, agriculture in Mecklenburg-Western Pomerania pays just €186. At the top, the wood and plastics processing industry in Westphalia-Lippe offers up to €2,904. Other sectors that pay more than €2,000 include the paper, metal, printing, and motor-vehicle trades.

By contrast, the public sector has not provided separate holiday pay since 2005. Banks and the energy industry also do not pay it, according to the WSI.

The underlying trend: shrinking coverage

The study’s findings come against a long-term decline in collective bargaining coverage, which fell from about 80 percent in the 1990s to only 49 percent today. As fewer workers are covered by tariff contracts, the chances of receiving holiday pay — and the amounts paid — are likely to remain uneven.