Key Legal and Regulatory Changes for German Businesses in 2026

Starting January 1, 2026, German businesses and employees will face a series of considerable legal and regulatory changes, impacting wages, compliance duties, and environmental obligations.

The minimum wage will increase to €13.90, which will also raise the minijob earnings limit to €603 monthly and the annual limit to €7,236, affecting workers over 18 years old. Apprenticeship wages will progress to a minimum of €1,014 in the fourth year. Meanwhile, the EU wage transparency directive mandates companies to disclose average salaries and justify pay disparities by June 2026, promoting greater pay equity.

Environmental regulations will tighten with the increase in the CO₂ price for fossil fuels, expected to range between €55 and €65 per ton, thereby raising heating and fuel costs. From mid-2026, firms must substantiate environmental claims with scientific evidence. New rules will also require online retailers to feature a visible return button and provide repair rights for specified products starting June 19, 2026.

In the gastronomy sector, VAT on food is set to decrease from 19% to 7% as of January 2026, although this is still pending legislative approval. The commuter allowance will rise to 38 cents per kilometer, which offers some relief against higher fuel expenses caused by CO₂ pricing. Additionally, solar power feed-in remuneration will decrease by about 1% beginning February 2026, and battery manufacturers must comply with stricter EU regulations concerning detailed information disclosure.

These forthcoming changes reflect Germany’s commitment to EU directives and climate initiatives while addressing wage growth and fair employment practices. Businesses will need to adapt quickly to meet compliance requirements and manage increased operational costs.

According to experts at the IHK Schwaben, these measures collectively represent a significant adjustment period for companies and workers alike, impacting payroll budgets and operational procedures across sectors.