10. May 2016–
All your friends are moving to Berlin. You’ve heard good things and you know about the infamous nightlife. People go on and on about how cheap the city is, all the while praising the bars, the food and the lifestyle. You’re tempted to make a move but you have one question: what is Berlin's cost of living, really?
Berlin's cost of living
This depends largely on your lifestyle, of course. Whether you bike or take public transport. How often you plan on going out for meals. What qualifies as a nice apartment. There are hundreds of factors but as an expat there is a good chance that you’ll find Germany’s capital very affordable, especially if you’ve lived in other capital cities. Having lived in London and Toronto - both places with eye-watering rent and high costs for going out - I find Berlin not only one of the most fun and open places but one of the most inexpensive, too.
Rent in Berlin
Yes, rent prices in Berlin are not once they once were. Some people are renting under old contracts and are paying less than 300 Euro/month but this is no longer the norm. Depending on whether you have a shared flat or your own apartment and whether you live in Wedding or Prenzlauer Berg, rent prices vary, but Expatisan says the average cost of a furnished studio in a ‘normal’ area is around 530 euro. Compared to exorbitant rents in say London or Paris, the prices are still reasonable. It’s also very likely that you’ll be getting more space for your money (and if you’re lucky hardwood floors and high ceilings!)
Food and drink
Let’s start with drink. Drinks in Berlin, especially from the grocery store or an off-licence are ridiculously cheap. Bottles of wine can be less than 4 Euro and beer can be just 39 cents. In restaurants and bars, drinks are still relatively inexpensive although more and more bars are offering expensive (10 Euros and up) cocktails.
The price of food in stores varies depending on store. If you shop at Lidl/Aldi (discount supermarkets), food tends to be very affordable, whereas shopping at Rewe or Bio Company will cost more. Still, the price of food is certainly less than other Western capitals and there is a wide variety of high-quality produce.
If you want to eat out and have a good meal chances are you will pay around 15 Euros. There are of course more expensive restaurants but you can also get very cheap street food like Döner or falafel.
Unlike some countries with only a few companies to choose from, Germany has many phone companies competing. This keeps prices low and gives you lots of options. Around 25 euro per month is usual for a pay-as-you go plan.
Many Berliners choose to bike during the warmer months but the U-Bahn monthly pass is very reasonable (58 Euro/month if you travel after 10AM and 81 Euro/month otherwise). London, by comparison, is 124 Pounds for a month pass for zones 1-2. The U-Bahn is also open all night on weekends, so getting home after a night out is no problem.
If you want to avoid cab fare (Uber and MyTaxi operate more as booking apps here) but still use a car, there’s also an increasing number of car sharing startups. DriveNow and Car2Go are two popular ones. Both require a registration fee around 30 euro and then charge per minute of use (around 30 cents).
Taxes and Insurance
Taxes depend on how much you earn but in general taxes are high in Germany. For 2014 and 2015 a taxable income of less than €8,354 was tax-free for a single person. Incomes up to €52,882 for a single person (€105,764 for a couple) were then taxed with a rate progressively increasing from 14% to 42%.
Germans love their insurance. Health insurance is mandatory and expensive (around 15% of your salary) but your employer, if you have one, will take it directly from your salary. If you’re a freelancer, it’s another story and is a major expense you should factor in to your budget. With all the contributions (taxes, pension, healthcare), the gross/net salary (“brutto/netto”) distinction is particularly important in Germany. Use the handy gross/net calculator at the end of this article to figure out the net amount you will take home each month or year.
The cost of living in Berlin is indeed rising, especially for housing. The price of food, drink and transport keeps overall costs much lower than other major cities. That said, salaries in Berlin also reflect the low cost of living. Minimum wage is €8.50 per hour and median salaries are lower than other German cities.