Germany could be housing about 1.1 million refugees by the end of the year at cost of €21 billion ($22.5 billion).
The cost estimate by IFO, a German research institute, is more than double its prediction in September.
Europe is in the midst of a refugee crisis mainly stemming from the war in Syria. Hundreds of thousands have arrived across the Mediterranean Sea in recent months.
In doubling its costs estimate, IFO assumed refugees will not only be housed and fed but will be provided health care, job training, schooling and German language courses.
In September, IFO called on Germany to use its budget surplus to help refugees.
Niklas Potrafke, a director at the institute, said “Germany has responsibility in the world. We got help some 70 years ago. It’s now our turn to help the world.”
IFO is also calling on the German government to scrap the country’s minimum wage for all low paid jobs to help refugees and others who need jobs. “Refugees should be able to work immediately,” IFO said.