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Medical certificate from day one in case of illness, higher tax on higher earnings; Why is Germany changing the rules?

July 3, 2026 by Uma Shankar

If you work in Germany, your health has suddenly deteriorated, then if you inform about it through call or message, you may not get leave. Actually, the German government is going to bring strict reforms in workplace rules and holidays. If you fall ill, along with informing about it, you will have to show the medical certificate for leave from the very first day itself. The German government has now taken this decision to deal with the competitive disadvantage caused by prolonged absence from work.

Considering fixed-term contracts for jobs up to 4 years

The German government is also working on a plan to bring major changes in workplace rules. In this, companies can be given scope to give fixed-term contracts of up to 4 years for new hiring till 2030. Apart from this, if those who have high salary are fired from the job, then along with compensation, they can also be given the facility of arrangement.

34-point package introduced to improve the economy

A 34-point package was presented by German Chancellor Friedrich Merz to save the country’s economy. Labor, tax and pension reforms have been introduced in this package. During this, Marj said that we are working to reduce the burden on employees and companies by reducing taxes to save our welfare state.

Ruling coalition agrees on economics reforms

German Chancellor Friedrich Merz said that the government’s aim is to get the main elements of the 34-point package passed by the parliament by the end of the year. He also informed that the ruling coalition has agreed on economics reforms. This will help in reviving the country’s economy which is in trouble.

Those earning more will have to pay more tax

According to AFP, Frederick Merz has said that we are working to increase the flexibility of the business. Our 34-point package includes income tax cuts worth 10 billion euros ($11.4bn). This will be financed by imposing higher taxes on people earning more than 250,000 euros a year. Apart from this, the retirement age in the pension system will be increased to more than 67 years.

Germany’s current Finance Minister and Vice Chancellor Lars Klingbel said that due to the new decisions, the highest earners in the country will have to pay a higher share of taxes. It would be right to do this so that the country can move forward so that our economy can get back on track.

About Uma Shankar

Uma Shankar writes about finance, business, and investment topics. He simplifies complex subjects like stock market, banking, tax, and cryptocurrency to help readers make informed financial decisions. Data-driven reporting is his strength.

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