The majority of people makes around 50k EUR gross in Berlin, which comes to approximately 30k EUR after taxes. On average, employees earn less in Berlin than the average across Germany. This can be a result of lower cost of living and influence of particular lower-paid industries.
Berlin is such a cheap capital city, because it is not capital city for too long. Not long ago, Berlin was divided into two parts. West Berlin was quite isolated, which made it not really eligible. East Berlin was the capital of a country, which called itself socialist.