German carmaker Volkswagen and the powerful IG Metall labour union announced on Tuesday they have reached a wage deal, giving 102,000 VW workers in Germany a two-step wage increase over the next 20 months. Employees at sites in Wolfsburg, Brunswick, Hanover, Salzgitter, Emden and Kassel will receive a 3.4-percent pay increase from September 1, followed by a further 2.2 percent from July 1, 2014, the carmaker and union said in separate statements. IG Metall had demanded a 5.5-percent pay increase for a 12-month period. The deal is based on a much wider industry-wide agreement reached earlier this month giving 3.7 million employees in Germany\'s metalworking sector a 3.4-percent pay hike on July 1 followed by a 2.2-percent rise in May 2014. VW has negotiated its own separate wage agreement with unions for a number of years now for its sites in western Germany. Under the terms of VW\'s deal, the carmaker will also make a one-off payment of 300 euros ($388) for each employee into the company\'s pension scheme. Volkswagen employs around 550,000 people worldwide and booked record profits of 21.7 billion euros in 2012.