Abstract Skill mismatch is crucial for labour market outcomes and serves as a central indicator in labour market research. Existing objective measures of skill mismatch typically focus on single skill domains, failing to account for the multifaceted nature of individual skill sets and occupational requirements. Using data from the 2016/2017 wave of the German National Educational Panel Study (NEPS) Adult Cohort, this study demonstrates that skill mismatch situations vary significantly across domains, highlighting the limitations of single-domain measures in capturing overall mismatches. To address this gap, I introduce a new multidimensional measure that captures objective mismatches across three key domains: reading, mathematics and ICT. This approach provides a more comprehensive assessment of individuals’ overall mismatch situations, addressing major shortcomings of single-domain assessments. The empirical findings demonstrate that the new measure is significantly associated with key predictors, such as educational attainment and occupational complexity, and linked to important outcomes. Compared to matched workers in similar occupations, mismatched workers report statistically significantly lower job satisfaction and experience wage penalties if underskilled or wage premiums if overskilled. These findings provide supportive evidence for the construct and criterion-related validity of the objective multidimensional measure. This study challenges traditional single-domain indicators and underscores the need for a comprehensive approach to capturing the complex nature of skill mismatches. The new multidimensional measure serves as a valid indicator for assessing the incidence of skill mismatches and analysing their relevance to individuals’ labour market returns.