IT salaries by federal state: where do people earn the most?

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Overview of IT Salaries by Federal State

At first glance, traditional federal state rankings suggest clear geographical earnings boundaries. However, a close look at the data for tech professionals reveals that for Hesse, Hamburg, Bavaria and Baden-Württemberg, IT median values are between €61,000 and €62,000, while in the five eastern German federal states they lie between €48,250 and €50,000. Nationwide, the IT gross median salary is clearly above the cross-occupational median for all full-time employees of €45,800. And beyond pure geography, professional experience, industry and company size determine actual income: in large corporations, the IT median is €71,250, while in small companies with fewer than 50 employees it is €49,250.

The East-West divide remains noticeable: the Stepstone analysis shows the highest IT median values for Hesse, Hamburg, Bavaria and Baden-Württemberg, while IT specialists in the five eastern German federal states have to settle for significantly less. The gap is primarily driven by the settlement of large corporations, corporate headquarters and the respective concentration of industries.

At the top of the table are Baden-Württemberg, Hesse, Bavaria and Hamburg, while the eastern German states rank at the bottom. However, these average values at state level fall short as they mask structural differences within the states.

Why the Metropolitan Area is the Better Metric

In practice, federal state rankings are deceptive because they mix two effects: the metropolitan area effect and the industry mix. Hesse is at the top because the Frankfurt financial hub pays above-average IT salaries. Baden-Württemberg and Bavaria lead due to the strong presence of large automotive and industrial corporations in Stuttgart and Munich. The federal state itself does not pay a salary; rather, it is the employers located there and their collective agreement or market structures that do.

Within a single federal state, the spread is often significantly larger than between two different non-city states. A software engineer in Munich earns noticeably more on average than a colleague in rural Upper Franconia or the Bavarian Forest. This is also reflected in the general salary comparison: Munich reaches a median of €58,000, while Bavaria as a whole stands at €50,000. The state average thus systematically conceals how far apart metropolitan and rural areas actually are.

For a reliable location assessment, the specific metropolitan area is therefore the decisive benchmark. If you are looking for detailed figures for individual metropolises, you can find specific analyses for Munich, the financial hub Frankfurt, and Hamburg in our in-depth salary reports.

Purchasing Power: What is Left of the Difference

A nominally higher gross salary does not automatically mean more disposable income at the end of the month. Anyone assessing the attractiveness of a location must factor in the cost of living and, in particular, apartment rents. High rents in metropolitan areas significantly put the salary advantage into perspective. The following sample calculations serve as a guide (without guarantee, not tax advice, calculated on the basis of tax class 1, statutory deductions):

• Example 1: Munich vs. Leipzig - The general median in Munich is €58,000 gross, in Leipzig €43,250. Only a portion of the gross advantage remains after tax and deductions, and the significantly higher cold rent for a 2- to 3-room apartment in Munich eats up another large part. Adjusted for purchasing power, the Leipzig salary in everyday life is therefore often closer to the Munich salary than the gross difference would suggest.

• Example 2: Frankfurt am Main vs. Dresden - Frankfurt has a median of €57,250, Dresden €42,750. Since housing costs per square metre in Frankfurt are significantly higher than Dresden rents, the nominal advantage shrinks noticeably after fixed costs. How much is left in the end depends heavily on apartment size, location and individual tax situation.

This comparison makes it clear: when looking closely at purchasing power, the mathematical salary gap between the highest-paying and weakest regions often turns into a relative balance. While major cities like Munich or Frankfurt offer higher salaries, high rents and living costs eat up a large part of the income, which is why a realistic comparison must always include purchasing power. Anyone planning a move should therefore not only look at the gross figure in the employment contract, but directly offset the local rental price level.

What this means for your search

Regional shifts affect candidates and companies differently. Here are the most important recommendations for action for both sides.

For Candidates: When a Move Really Pays Off

If you are considering a change of location as an IT expert, examine closely which factors shape your financial balance:

• Salary jump above the metropolitan premium: A move to Munich, Frankfurt or Stuttgart usually only pays off financially if your gross salary increases by at least 20 to 25 per cent to compensate for the higher housing and living costs.

• Career leverage and specialisation: In metropolitan areas, you benefit from a higher density of enterprise projects, S/4HANA transformations or AI/tech roles, which accelerates your medium-term market value development.

• Leverage remote work: If you live in a region with moderate living costs and work remotely for a company from Munich, Frankfurt or Hamburg, you achieve the optimal ratio of top salary to low fixed costs.

For Employers: Why Regional Salary Models No Longer Work with Remote

If you are looking for specialists as an IT decision-maker or hiring manager, remote work has fundamentally changed the rules of the game. Anyone advertising remote positions nationwide is no longer competing with the local job market on site, but directly with the salary bands from Munich, Frankfurt and Berlin. In the DACH region, remote salaries typically orient towards the upper end of the national salary range.

To succeed in the competition for scarce specialists in software engineering, SAP or cybersecurity, three strategic approaches are recommended:

• Transparent level logic instead of regional deductions: Compensate tech talents based on technical skill level, project responsibility and impact instead of place of residence.

• National salary bands with location allowance: Define a uniform base band for remote roles and work with targeted metropolitan allowances for mandatory attendance in high-priced metropolises.

• Speed in recruiting: For top candidates, quick feedback loops are crucial. A lean process with a clear decision within a few days beats rigid, months-long selection procedures.

As a specialised, founder-led tech recruitment consultancy, Nova Search supports you in filling open positions in SAP, Cybersecurity, AI/Tech and IT quickly and accurately. With talent intelligence, regional benchmarks and a two-stage screening process, you will receive your first qualified profiles in 5 working days for permanent roles and within 48 hours for freelance projects.