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
Amazon could take 30% stake in large cargo airline Long-time Work Opportunities executive director retires FDA investigates listeria outbreak linked to Pasco plant Minimum wage hikes were followed by employment increases Bitcoin’s self-proclaimed founder backtracks Boeing Co. drone unit to open office at Mississippi State