Funding Arrangements in Germany

In the German apprenticeship system, initial and continuing VET is based on mixed financing by various public and private bodies. The training companies finance the in-company training. The Federal States fund the vocational schools (mainly teaching staff salaries) and the local authorities’ equipment and infrastructures. The Federal Government finances measures for the improvement and promotion of the apprenticeship system.

Companies

The companies participate voluntarily in apprenticeship training and bear its costs. Companies enter an apprenticeship contract with their apprentices and pay them an allowance based on a collective bargaining agreement. Personnel costs for the apprentices account for the predominant share with an average of 62% of the in-company training costs. If a company refrains from providing in-company training, it has no levies to pay. Only at a sectoral or occupational level, e.g. in the construction sector and the chimney sweepers branch, do all companies finance a branch training fund that benefits training companies. There are frequent calls – especially from the unions – to extend this model to other branches or to introduce a general training levy.

Training levy in the construction sector

Based on a decision of the social partners, the construction sector introduced a training levy in 1976. All companies of the sector have to pay the levy. The amount is settled in the collective bargaining agreement. The levy is used to finance all inter-company training and a large part of the in-company training. 

Salary or Remuneration (Ausbildungsvergütung)

The salary or remuneration (‘Vergütung’) according to the wording of the Vocational Training Act) is determined by collective agreements and depends on the occupational sector. 
Employers who are not a member of any of the employer associations so that the collective agreements are not binding for them may still choose to pay the amounts fixed therein on a voluntary basis, but they are also free to pay a salary which is lower.
In 2020, collectively agreed training allowances averaged €963 per month overall. 
The highest training allowances in 2020 were paid in the public sector at €1,076. The training sector industry and commerce was also above €1,000. In the home economics sector, the average collectively agreed remuneration was €959. The training areas of agriculture, liberal professions and crafts were below €900. At €850, the lowest amounts by far were paid in the skilled trades. The lowest overall compensation averages of €599 were in the chimney sweeper occupation. 
The salary is provided for the whole duration of the training. It increases per training year. According to the Vocational Training Act, apprentices are entitled to the salary also during the periods in the vocational school as well as during their preparation for the final examination.
Monthly allowance (Berufsausbildungsbeihilfe): 
If you live in your own apartment during your training, your training allowance may not be enough to pay for groceries or travel home in addition to rent. The Employment Agency can help with the so-called Berufsausbildungsbeihilfe (BAB), it supports you during your training with a monthly allowance.

Public funds

Public funds are allocated by the Federal Ministries of Education and Research, Economic Affairs and Climate Protection Labour and Social Affairs, the Federal Employment Agency and the Federal States. Those expenses are linked to the development, improvement, execution and promotion of apprenticeship, e.g. via support programmes or measures for guidance and counselling. The total sum of public expenditure for apprenticeship training amounts to 6.84 billion euros in 2017 (Datenreport 2019).

Inter-company training centres and chambers

Inter-company vocational training centres (überbetriebliche Berufsbildungsstätten, Überbetriebliche Lehrlingsunterweisung in the skilled trade sectors) are operated mainly by public law bodies (municipalities, chambers and guilds) or non-profit private law bodies (trade associations). There is a mixed financing, with subsidies from the federal employment agency, the Federal Government (capital grants from the Federal Ministry for Education and Research) and the states added to the resources of the responsible body (ReferNet 2018). The chambers obtain their funding through the dues of the compulsory member companies. They can also charge the companies fees for the examinations and the registration of an apprenticeship.