The ver.di union and mail company Deutsche Post AG reached the deal for some 132,000 workers Friday.
They will get a 3.1 percent increase on Aug. 1, followed by another 2.6 percent in October 2014. The deal runs through May 2015.
Ver.di went into talks seeking a 6 percent hike and staged repeated "warning strikes" in recent days to underpin its demand. In separate negotiations, the IG Metall union is currently pushing for a 5.5 percent raise over a one-year period for workers in Germany's key manufacturing sector.
The demands reflect the German economy's relative health.
MORE HBJ HEADLINES
Our new comment system is not supported in IE 7. Please upgrade your browser here.