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The Institute of the German Economy (IW) has established a relative approach to defining the middle and upper classes in Germany, basing their income thresholds on household income relative to the median.
According to this system, the middle class comprises households with an income between 80% and 150% of the median income. Households earning above 150% of the median are classified as upper class. This approach takes into account household size and composition by using equivalent disposable household income.
The group of "relatively high-income" people begins at 250% of the median income per month, placing them firmly in the upper class. Interestingly, only 4% of the German population falls into the upper class income bracket.
For a couple without children, their combined income must exceed 8670 euros to belong to the top 4% of the population in terms of income. Singles in the upper class have a monthly net income of at least 5780 euros.
It's worth noting that the exact euro values change yearly due to income distribution and inflation. For instance, if the median household income is €40,000 per year, middle class income would approximately range from €32,000 to €60,000 annually, and incomes above €60,000 would fall into the upper class category.
This focus on relative economic standing rather than absolute income levels provides a more dynamic understanding of social class in Germany. However, the IW has not published exact numerical thresholds in the present search results, suggesting that they frame social class by proportional income ranges rather than fixed nominal thresholds.
For the most recent exact euro figures from the IW, it's recommended to consult the IW's official publications or their website, as the authoritative source.
In the classification system by the Institute of the German Economy (IW), personal-finance matters greatly as those with a combined income exceeding 8670 euros (for a couple without children) are considered part of the upper class, occupying the top 4% of the population in terms of income. On the other hand, in the business world, households in Germany are deemed middle class if their monthly income is between 80% and 150% of the median, implying a potential need for financial planning to reach that level or maintain it.
