I'm an American interviewing for a director level job in Berlin and I am curious to hear more about cost of living and what a euro gets you.

Can someone please give me their opinion about how much you would need to earn to live very comfotably in Berlin. By very comfortably I mean having enough money to have/do the following:
--renting a large 3-4 bedroom apartment in a great part of the city
--sending my child to a private international school (cost=10,000 euros a year)
--eating out two to three times a week
--taking two 1-2 week vacations each year (cost=5,000 euros)
--being able to save at least 1,000 euros a month (12,000 euros per year)

You get the idea. I guess what Im missing here is the general cost of living like monthly costs for utilities, food, rent?

Any thoughts are welcome.

Thanks

But why an extra thread?

- large (about 100m²), nice apartment: about 1000 euro/month (not furnished)
- eating out 3 times a 3 course dinner including wine/week: about 120 euro/person

I started a new thread becasue the other thread mostly covers cost of living on a tighter budget.
I want to know how much you need to earn to live if your spending habits are more liberal.
Thanks

The NY Times came out with an interesting article this weekend (in their spring magazine insert) about the cost of living in Berlin and how it was the new place to be in Europe. Good luck it sounds like fun...

How much a 2 week vacation will cost depends on how many people (I'm guessing at 3?) & where to & what standard.
Just to give an idea - our annual 2-week holiday (4 persons) on Ibiza during the school hols costs us just under 5000 Euros - but
that isnt luxury - its a good 3* hotel/apartment site with plenty sports etc which we direct book.

If you are looking at something like Cub Med you can factor that by Pi at least...

I'm pretty sure he was dictating what his expenses are, not asking, and was asking about the basic living expenses on top of all that..

To answer your question (although not really..),
You can get a lot of bang for your buck, it just depends on what areas you want, etc. There are a few options. But I know people that have come from places like New York and were shocked at how much real estate they could get for their money (using real estate as slang here... meaning.. actual space, etc). Your gas and water, etc, I forget how that all works, someone else can clarify, but I think for me it's all included and then at the end of the year if the collective usage of the building exceeds a certain amount then there is a bill or something. (Maybe i'm out to lunch, I don't pay too much attention to be fair!)

The best thing is to just start off by looking at listings for apartments and things. You'll really be able to figure out things from there. There are a few sites around, i'm sure there is a list in here somewhere. Groceries and things waiver between cheap and slightly over priced depending on what you're looking for. Internet and home telephone won't exceed $50 really (I have the "fastest" available/most bandwidth available with my service provider, phone included with cheap calls to north america for 30 something euros a month).

I don't know what else there is to consider. Rent is really reasonable when compared to cities of similar size and note in other parts of the world. Start by looking at flat listings and add a little bit for your other expenses... and you'll have a very good idea of things

This is the exact reason why I want to retire in 12 years then go and live in Berlin!

A 4 to 6 room flat/2 bathrooms in a very nice district is going to be around 1200 to 2000 warm (heating included) per month.
During the west Berlin apartment shortage in the 80s building owners were given financial incentives to fix up their Dachgeschosses (top floor apartments/converted attics) and the result is a number of huge & funky penthouse spaces available. When you do your search (www.immobilienscout24.de is a good one) check those out! Amazing views of the city. Cool architecture.

Schools - your children would likely qualify for a spot at the JFK School and there's no tuition fee there if you are accepted. You should check this school out as it offers instruction in German & English
plus has lots of sports, activities etc.

You may only take two 1 week vacations per year but bear in mind that the schools get a really long fall, winter, easter and summer break! Also I'm sure you heard that Germans are a vacationing bunch - roughly 6 weeks per year.

In my opinion, JFK is not the best international school, although many Americans tend to like it as it is a bit of "home form home" (they had armed guards on the gates for a time after 9/11!). Nelson Mandela school is in my opinion a better option. There are now quite a few very good bi-lingual kitas (kindergardens) in varions districts. Berlin is a brilliant place to bring up kids - lots of parks and playgrounds, a good education infrastructure and healthcare system, and in general the people here are very child friendly.

Beware when looking for apartments, as in Germany the advertised number of rooms includes living room(s), so if you want a 4 bedroom apartment, you need to look for at least 5 rooms. As indicated in previous post, expect to pay between 1200 and 2000 euros per month, including heating costs. You will need to lodge a deposit, equivalent to 3 months rent (cold - i.e. the base rent). In many German cities, it is common to hae to pay a "Makler" (estate agent) anything from one to three months rent to secure an apartment - in Berlin, you should not do this, as there are many apartments available direct form the owners, or administrators of the buildings - look for the work "provisionfrei" in the ad. As well as Imobilien Scout, the Berliner Morgenpost web site has a huge number of apartments (http://immonet.morgenpost.de"). It is a well organised site, but is 100% in German.

Note that salaries in Berlin are not great - although you will be paid in euros, which is pretty good these days relative to the US dollar (1 euro = 1.57 US dollars today). Tax is high, and health insurance is compulsory. Health insurance costs are reasonably high, but the service is good (what you pay depends on your salary, but there is an upper limit cap - and your kids and partner, if not employed are covered). Also note that you will get 5 weeks holidays here, (as opposed to 2 weeks in the US), on top of that there are quite a few public holidays. Costs for studying in University are also very low compared with what you will be used to - so if your kids are getting to that age or if you plan to stay here for a long time, it's worth taking this into account).

Eating out in Berlin is really good value - not only is there a great choice of food types, but lots of different types of cafes, pubs and restaraunts. If you avoid the tourist traps around Ku'Dam and OranienburgerStr, you will get excellent value. Unlike other parts of Germany, Berlin does not have great local beer or wine, so best to look for beers form other parts of Germany (especially Bavaria), or beers from Czech republic or Poland. There are good German wines, but most popular in Berlin are the ubiquitous Carbernet Sauvignan, Merlot and Rioja - which is often of dubious quality. In general, keep experimenting in different places, and you will for sure find places that you will love. Especially interesting areas for food are Schoeneberg, Prenzlauer Berg and Kreuzberg.

Berlin is also a great place for culture - apart from the history, there is an abundancy of music (every style you can think of), theatre, art (wonderful galleries and museums).

Berlin has an excellent public transport system (when its not on strike!!!). This may sound strange to an American, but if you live in the city, you really don't need a car. If you decide to rent a house and garden as opposed to an apartment, you'll need to live a bit further out, and then a car may be necessary.

Also worth knowing that when you are a resident in Germany, you can travel freely (i.e. no visa requirements or passport checks)within the 20+ countries that are party to the Schengen agreement (that covers most of Europe, but does exclude the UK and Ireland) - so lots of possibilities to explore European culture during your extensive holiday (sorry vacation) time!

I hope all this helps, and if you move here, I'm sure you'll love the city - it's a great place to live.

All the best,

Colin

Thanks for all the feedback everyone. I really appreciate the time spent here on thoughtful posts.

As it turns out, cost of living seems relatively cheap for a large city in Europe. What I am discovering, to my job search's detriment, is that my tax liability is probably a prohibitive factor. German taxes are roughly 50%. But on top of that, as an American, I have to pay taxes back to America (land of the free my ass!) on everything I earn abroad over $85,000. That combination is going to kill me.

Is there anyone out there who is an American, working in Berlin for a corporation and trying to support a family? If so, I'd love to hear your take on this taxorama.

thanks again all.

Winter

For guidance, if you've got a salary of 60000 euros, and two kids with partner at home looking after the kids, then you would take home about 3300 euros each month after tax, health insurance and social insurances/state pension - so that is significantly less than 50%, even including health insurance and social costs. This will change if your partner is also earning, as different tax classes may apply. I am no tax expert, but I'm surprised that you might have to pay tax in the USA if you are resident and domiciled in Germany. Certainly in Europe, you are only taxed in one country, and that's the one where you are domiciled. I guess if you are keeping property in the USA, then there may be implications. It could be worth talking to a German tax adviser (called Steuerberater) - there are lots of them here, as Germans like to fight for every cent they can claim back from the tax office (Finanzamt).

With regard to holiday costs, alot depends on what you are looking for, and when you can go. If you are restricted to school holiday times, things are more expensive, but if you can go on holidays in April/May, and September, there are great deals to be found. For example, a package holiday to Greece for two adults and two kids might cost 2500 euros in August, but the same holiday in September would easily be found for 1500 euros. Another good thing about coming to live in Berlin is the variety of holidaying possibilities. You can visit countries like Greece, Italy, France, Spain, and do lazy seaside holidays there, or visit cities such as Paris, Rome, Venice, go skiing in France, Switzerland, Italy or Austria, or head east into countries such as the Czech Republic.

I don't know how long you are planning to stay in Germany, but it would be a shame if you decided not to experience Europe and Berlin for the sake of a few tax dollars.

All the best,

Colin

Perhaps, if/when I get the offer I will consult a German tax pro--good idea.

But unfortunately, it is true that EVERY American has to pay American taxes on all income over $85,000 when they are working and living abroad--even if you don't own property in the states. As I said, land of the free, my ass! This means that if I make 120000 euros (currently $187,000) I would have to pay American taxes (roughly 28%) on $102,000. And that's after I pay the German taxes. Ouch!

But who knows, I'll keep an open mind and see where it leads. Again, thanks for all the help and advice.

Why don't you ask about the US tax side of things on the finance forum. I presume that you have searched this question on the website already? Not everyone reads the regional sections here.

I find it strange that the USA can tax your German income. As far as I am aware, there is no formal sharing of information on tax/income data between different countries. What may be the case is that if you are working for an American company outside of the USA< then the USA looks for tax as you said. I'd be surprised if this would be the case if you were working for a German company, as I don't see how the USA can know or claim any of your German income as taxable.

As I said, talk to a tax adviser, and as advised look elsewhere in this forum for more specific information on the subject.

Hope it all works out,

Colin

U.S.-German Tax Treaty ...

This is IMHO not true. What is true is that every US citizen has to file tax returns (or whatever you call em).

There are double-taxation agreements between Germany & many countries (incl. UK, USA...). In your case this means that your German tax paid (income tax not social or health costs) would be set off against US tax which could well mean you have to pay zero or very little to US. See previous post.

However they want to keep tabs on what their citizens are doing maybe

HEM--having lived and worked in other countries, my statement about taxes is without a doubt true. Again, to my dismay.

the tax treaty states that you have to live in germany 330 days out of the year to qualify for the 85K exemption. what happens if you've been here (registered legally etc) for say, 280 days? double taxation?

If you haven't lived there for the full 330 days I believe that amount is prorated to the number of days you were present.

Ask from your company to include an international tax advisor like KPMG in your package. These guys having both offices in US and Germany can coordinate much better on any tax reliefs you will get. I know by experience that there alot of ambiguous points on taxation which can be interpreted both ways.

Hi there - I recently interviewed for a senior position at a software company in Berlin and had a similar concern with the relatively high tax burden.

The company offered to hire me as a contractor rather than a full time / permanent employee. My understanding is that normally this would require you (the contractor) to establish your own company (a procedure that requires you to have roughly €15k in liquid assets at hand). However, certain classes of position are excluded from this (generally artistic or creative ones and as I am a software designer I am luckily included in this latter category).

Although I will have a substantially higher net income (about 22% higher than if I was a regular employee), I will forego the majority of public service benefits (e.g. unemployment / pension benefits, etc. and possibly legal protections such as against unreasonable dismissal, etc. but for the latter, I am negotiating these into the contract) and will be directly responsible for paying VAT and taxes to the government (hiring an accountant to do this is not particularly difficult or expensive, maybe €100 or €200 per year).

Cheers.

You do not need to set up a company, to work as a contractor. In Germany, you can register as "Selbsstandig" - self employed. All you will need proof of your qualifications. Then appoint a Steuerberater (tax consultant), and they will do everything you need including your personal tax, VAT, audits etc. You are effectively operating as a company, without the structure. If you have a business partner, you can set up a partnership in a similar way - however it is a bit more complex, but still no need to setup a GmbH and come up with the startup money. You will need to arrange private health insurance (you have no choice in this, everybody in Germany must have health insurance).

By the way, if you do setup a GmbH, then you can immediately borrow the money back to operate the business, pay yourself etc. Of course this must be done through the company books, but it means that you really only need to raise the cash for a day (the money does have to physically go into the company bank account as far as I know) - so if you can get a bridging loan, that will do the trick.

The tax consultant will cost a bit more that you indicate, but they are still good value (don't be tempted to do it yourself - you will loose out as German tax and accounting procedures are very complex, and the Steuerberater folks know all the tricks to minimise your tax payments, and get the audits etc. done efficiently - as I have said elsewhere on this forum, you will get the money that you pay them back many times over.

Hope this helps,

Colin