A master’s entry into a large company often brings more than a salary: there are benefits, development programmes and a pension scheme that the employer partly funds. This guide explains which benefits are set by law, where you should look closely in the contract and how to compare a corporate offer fairly.
Short answer: Large companies usually pay graduates with a master’s degree according to a collective agreement or their own pay structure, which must be stated in the contract. Some points are fixed by law: up to six weeks of sick pay, full holiday entitlement after six months, and salary conversion for company pension schemes with a 15 percent employer top-up on the saved contributions. Last updated: October 2026.
The key points
- Pay in a large company follows a collective agreement or an internal structure. The master’s degree alone does not guarantee a grade.
- Salary conversion for company pensions (Entgeltumwandlung) can cover up to 4 percent of the statutory pension contribution ceiling.
- The employer must add 15 percent of the converted amount, as far as it actually saves social insurance contributions.
- A probation period may last at most six months and carries a notice period of two weeks.
- Extra benefits such as meal allowances or training budgets are not regulated by law. Check them in the contract.
Pay in a large company: collective agreement, internal structure or individual contract
Large companies often use their own pay systems. Some apply an industry agreement, others pay outside collective terms or within an internal salary band. For you this means that a number in an offer is only comparable if you know what structure stands behind it.
Ask in writing whether the offer is covered by a collective agreement, which pay level is planned and how often pay is reviewed. A comparison of starting salaries by field is in the German guide Einstiegsgehälter nach dem Studium im Vergleich (in German).
Retirement provision through the employer
Many companies offer a company pension scheme funded by salary conversion. You give up part of your future salary, and the amount flows into the pension. Under section 1a of the German Occupational Pensions Act (BetrAVG) you can demand that up to 4 percent of the statutory pension contribution ceiling is converted. The ceiling for 2026 is 8,450 euros per month, so 4 percent equals 338 euros per month.
In addition, the employer must pay 15 percent of the converted salary into the scheme, as far as it actually saves social insurance contributions. This is a statutory obligation, not a voluntary extra.
| Item | Assumption | Result |
|---|---|---|
| Monthly salary conversion | Assumption: 200 euros | 200 euros |
| Employer top-up under section 1a para. 1a BetrAVG | 15 percent of 200 euros | 30 euros |
| Total paid into the scheme | 200 euros plus 30 euros | 230 euros |
| Maximum conversion per month | 4 percent of 8,450 euros | 338 euros |
The table is an example with assumptions. Whether the top-up applies in full depends on whether the employer actually saves contributions. Ask which implementation route applies, such as a direct insurance, a pension fund or a pension scheme, and get the conditions in writing.
Probation, notice and holidays
A corporate start usually begins with a probation period. The statutory rules set how long it may last and which notice periods apply. The probation period may last at most six months. During this time the notice period is two weeks, unless something else has been agreed (section 622 para. 3 BGB).
After probation, an employee’s notice period is four weeks to the 15th or to the end of a month. The employer must observe considerably longer periods that grow with the length of employment. After two years of service the employer’s period is one month. Under section 4 of the Federal Holiday Act (BUrlG) the full holiday entitlement arises only after six months of employment. Before that, a partial entitlement applies under section 5 BUrlG.
In case of illness, section 3 of the Continued Remuneration Act (EFZG) grants up to six weeks of continued pay. The entitlement arises after four weeks of uninterrupted employment. Companies may set further rules on allowances or sickness benefit, which you should check in the contract.
Putting extra benefits into perspective
Companies often advertise benefits that are not required by law. These include meal allowances, mobility offers, training budgets, health programmes or company car rules. They can change the value of an offer considerably, but they are not regulated the same way everywhere.
- Check whether extra benefits are firmly promised or subject to reservation.
- Ask whether they are linked to conditions, such as a minimum period of service or a budget.
- Remember that some benefits are taxed or treated under social insurance differently from cash pay.
The German guide Netto-Brutto-Rechner für Akademiker mit Einstiegsgehalt explains how gross pay becomes net pay. A binding tax calculation is available from the federal tax calculator.
Frequently asked questions
Does a master’s entry in a large company always pay better?
Not necessarily. The role, the tasks and the pay structure of the company matter. A master’s degree can open doors, but a corporate offer must be compared case by case. The German guide Master oder direkt arbeiten (in German) discusses this trade-off.
When does salary conversion make sense?
That depends on your financial plan, your liquidity and the conditions of the implementation route. The statutory top-up makes it attractive, but it does not replace a careful check. Ask for the costs and the rules on the entitlements before you agree.
Does the probation period also apply to trainee programmes?
If an employment relationship is established, the same basic statutory rules apply. Whether a programme counts as probation or has another name must be stated in the contract. Ask which periods apply to you.
Does the employer have to pay my pension in full?
No. Salary conversion is an agreement about part of your salary. The statutory 15 percent top-up applies only to the saved contributions. It does not replace your entire retirement provision.
How to proceed now
- Ask in writing about collective agreement coverage, pay level and extra benefits.
- Check whether the employer offers a company pension through salary conversion.
- Add the probation period, notice periods and holidays to your planning.
- Compare the net figure with the federal tax calculator before you accept.
Related guides
- Starting Salaries After Graduation: What Really Counts
- Master or Work: Which Path Pays Off More?
- Further Education After Graduation: Options and Funding
- Probezeit: Kündigung, Urlaub und Krankenversicherung
Sources:
- Occupational Pensions Act (BetrAVG), section 1a, accessed October 2026 (in German)
- German Civil Code, section 622: notice periods, accessed October 2026 (in German)
- Federal Holiday Act, section 4, accessed October 2026 (in German)
- Continued Remuneration Act, section 3, accessed October 2026 (in German)
- GKV umbrella association: fact sheet on 2026 contribution parameters (in German)
- German Pension Insurance: contribution ceilings 2026, press release (in German)
Last updated: October 2026. This guide is general information, not individual advice.
