Germany's Undeclared Wages Drop to 13.8% in 2024
The proportion of undeclared wages in Germany's commercial sector has seen fluctuations over the years. In 2020, it stood at 17.8%, before rising slightly to 18% in 2021. However, a significant drop was recorded in 2024, with the figure decreasing to 13.8%.
The decrease in undeclared wages, also known as 'envelope wages' or 'Schwarzarbeit', is considered a positive step in reducing the grey or shadow economy. Despite no increase in the proportion of such wages in recent years, the latest figures show a significant decline. It is worth noting that no German authority has publicly taken responsibility for publishing data on the development of the share of hidden wages in the years 2022 and 2023, leaving a gap in official statistics.
Experts attribute the decline in undeclared wages to various factors, including stricter enforcement of tax laws, increased public awareness of the issue, and the impact of digitalization on payment transparency.
The reduction in undeclared wages to 13.8% in 2024 is a notable development in Germany's efforts to combat the grey economy. While the reasons behind this decline are not entirely clear due to the lack of official data for the intervening years, the trend suggests progress in tackling this longstanding issue.
