SHARE
COPY LINK
For members

WORKING IN GERMANY

7 tips for how to survive as a freelancer in Germany

Taking the decision to go it alone and freelance in Germany can be a daunting prospect. But, if you do it right, it can be an exciting and liberating path. Here are some of our top tips on how to survive.

A woman works on the floor of her living room.
A woman works on the floor of her living room. Photo: picture alliance/dpa/dpa-Zentralbild | Sebastian Kahnert

1. Get a tax advisor

The German tax system is complicated, even for Germans. All the associated paperwork uses the Amtsprache (authority language) which is more like legalese than ‘normal’ German, and mistakes when filling out tax forms can cause you, at best, a massive headache and, at worst, a costly fine. So it’s best that you employ someone who knows what they’re doing to help you out.

That person is called a Steuerberater (tax advisor) in Germany. They will help you register with the tax office, correspond with them and submit your tax declarations.

Be aware that, in Germany, different deadlines apply for tax returns depending on whether you employ an official tax advisor or not. If you are doing the tax return on your own, the deadline for submitting your annual tax return is earlier than if you use a tax advisor’s services. 

READ ALSO: What NOT to do when you’re freelancing in Germany

When looking for a tax advisor, a top tip is to use your network to get recommendations. Ideally, you want someone who will do more than just fill in the forms for you, but who will actually advise you on how best to manage your business finances so that you can make tax savings.

2. Keep your accounting in order

The better you keep your own accounts in order, the easier it will be for your tax advisor to compile your tax declarations and therefore the cheaper their services will be.

As a freelancer, there are a lot of costs you can deduct from your taxes – from train tickets, working materials, to meals out – so it’s best to keep hold of all your receipts and to keep them in good order.

2 euros and 50 cents lie on a receipt in a beer garden. Photo: picture alliance/dpa | Peter Kneffel

In Germany, you’re obliged to keep hold of receipts for two years, in case of a tax inspection, so it’s a good idea to photocopy the type of machine-printed receipts you get from restaurants so that they stay legible for a long time.

There are also a few things to be aware of when writing your own invoices. Firstly, make sure that you include your tax number. This isn’t the 11-digit Steueridentifikationsnummer that everyone gets when registering in Germany, but the 10-digit Steuernummer you get from the Finanzamt after registering yourself as a freelancer. 

Most companies won’t pay you if you don’t have this on your invoices so make sure you include it.

You should also make sure that you number your invoices properly – ideally in ascending order so that you can easily keep track of them. You are not allowed to issue two invoices with the same number and if you do so and the finance office notices, you could face an inspection of your whole accounting system.

There are numerous great accounting software programmes you can use to help you, such as Lexoffice and Sevdesk and, even if you have to pay for them, the costs will be tax deductible!

3. Find out if you’re eligible for financial support

In Germany, there are several opportunities for freelancers to gain financial support and to cut their outgoings, and its worth finding out if you’re eligible for them.

If you’re claiming unemployment benefits under ALG 1 and are thinking about becoming a freelancer, the employment office offers a special type of financial support to help you to get your freelance business off the ground.

Called the Grundungszuschuss (“foundation grant”) the payment is a six-month grant equalling your monthly entitlement under ALG 1 plus €300 towards your insurance costs can be applied for those in receipt of this unemployment benefit.

READ ALSO: Will freelancers benefit from Germany’s €300 energy allowance?

If you are engaged in some form of artistic profession in Germany – which can include journalism to pottery – you may be entitled to membership to the Kunstlersozialkasse (artists’ social insurance).

Being a member of the KSK means you only have to pay half of your health insurance and pension contributions, and the KSK will pay the rest.

4. Work out how much you think you will earn

As with starting any business, you need to have some idea of your expected earnings from the outset.

If you’re just starting out as a freelancer, or have some freelance gigs on the side of an employment position, then it might be worth considering registering yourself as a Kleinunternehmer (“small business”).

As a Kleinunternehmer, you can currently earn up to €22.000 per year without having to charge VAT and having to submit only yearly tax declarations. 

An income tax declaration form lies on a table. Photo: picture alliance/dpa/dpa-Zentralbild | Hans-Jürgen Wiedl

Be aware that if you are registered as this kind of freelancer, you must include the following sentence in your invoices: ‘Gemäß § 19 UStG wird keine Umsatzsteuer berechnet’ which means ‘In accordance with Paragrah19 of the German VAT law, no VAT has been added to this invoice.’

READ ALSO: Everything you need to know about your German tax return in 2022

If you think you will earn more than €22.000 per year, you will need to pay Umsatzsteuer (VAT) and will have to submit tax declarations in advance and more often. Depending on how much you earn, this could be every month or every quarter. 

5. Get your insurance in order

In Germany, it’s a legal requirement to have health insurance.

If you’ve just made the move from employment to being a freelancer and want to keep the same health insurer, you should get in contact with your health insurance provider straight away to tell them about your change of circumstances. They will ask you to re-register and to tell them your projected freelance earnings for the year, so they can amend your monthly fees.

If you don’t keep your health insurer provider updated, you could continue to be charged the higher rate that you had from your previous salary.

The insurance cards of the health insurance companies DAK, AOK, Barmer and Techniker-Krankenkasse TK lie with euro notes under a stethoscope. Photo: picture alliance / dpa | Daniel Karmann

It’s not just health insurance you need to think about as a freelancer. It’s also wise to think about protecting yourself from any sort of claims that could arise as a result of any working mishaps. 

If, for example, you lose your laptop which contains confidential client information, you need to be protected against claims.

That’s why it’s good to have both Betriebshaftversicherung (business liability insurance) and Rechtschutzversicherung (legal protection insurance).

6. Plan your time wisely

All of these bureaucratic obligations take time. So it’s really important that you take account of that when planning your time. For example, planning half a day a week to deal with your invoices, filing, emails to clients, and conversations with authorities can be really beneficial when scheduling your working time. 

7. Grow your network

As a freelancer, networking is absolutely crucial to success. 

Keep an up-to-date profile on websites like LinkedIn and German equivalent XING and keep in contact with anyone you’ve ever worked with, no matter how brief the contact was. 

Having a network is not only about getting more clients, but also about building a support network in your field to exchange advice, tips and generally for your own enrichment. 

Participating in workshops related to your field, going to seminars, and meet-ups, can be great ways of broadening your network. 

Member comments

Log in here to leave a comment.
Become a Member to leave a comment.
For members

IMMIGRATION

EXPLAINED: How Germany plans to make immigration easier for skilled workers

The German government has agreed on a set of reforms for the immigration of skilled workers, which was approved by the cabinet on Wednesday. Here's what they're planning.

EXPLAINED: How Germany plans to make immigration easier for skilled workers

What’s happening?

Germany is currently facing a dramatic skilled worker shortage, particularly in the health sector, IT, construction, architecture, engineering and building services. The German government currently expects that, by 2026, there will be 240,000 jobs for which there will be no qualified candidates.

In order to help plug the gap in the labour market, the coalition government has been proposing changes to immigration law for months.

In September, Labour Minister Hubertus Heil presented plans for a new points-based immigration system, that will enable non-EU workers to come to Germany to look for work even without a job offer, as long as they fulfil certain criteria, under a so-called “Opportunity Card” (Chancenkarte) scheme.

READ ALSO: Explained: How to apply for Germany’s new ‘opportunity card’ and other visas for job seekers

Now, the coalition government has agreed on a wide-ranging set of initiatives to help remove hurdles for skilled workers coming to Germany. The points were approved by the cabinet on Wednesday, who should then come up with a draft law in the first quarter of 2023.

What’s in the plans?

The central aim of the government’s plans is to make it easier for people from outside the EU to find a job in Germany.

In the draft paper, ministers distinguish between three so-called pillars, the first of which concerns the requirements that foreign specialists must meet in order to be allowed to work in Germany.

Until now, they have had to have a recognized degree and an employment contract, but the government wants to lower this hurdle.

The draft states: “For specialists who are unable to present documents relating to their professional qualifications or can only do so in part, for reasons for which they themselves are not responsible, an entry and residence option should nevertheless be created.” The competencies could then be finally examined once they have arrived in Germany.

A trainee electrician practices in a training centre in Cologne. Photo: picture alliance/dpa | Oliver Berg

The second pillar involves skilled workers from abroad who do not yet have a degree but already have a lot of professional experience.

For employees in the information and communications technology sector, the requirement of having sufficient German language skills would be waived, and it would then be up to the managers of the company making the job offer to decide whether or not they want to employ the skilled worker despite a lack of German language skills. 

READ ALSO: ‘More jobs in English’: How Germany could attract international workers

The third pillar is about enabling third-country nationals with good potential to stay in Germany in order to find a job. The “Opportunity Card” falls under this pillar and will involve a new points-based system, which will allow non-EU nationals to come to Germany to look for work even without a job offer as long as they fulfil at least three of the criteria of having a degree or professional qualification, having experience of at least three years, having a language skill or previous residence in Germany and are under 35.

READ ALSO: How to apply for Germany’s new opportunity card and other visas for job seekers

What other initiatives do the plans include?

The traffic light coalition also wants to do more to promote Germany as an attractive, innovative and diverse country abroad.

One initiative is to publicise job vacancies internationally and connect qualified people abroad with employers and educational institutions in Germany. 

READ ALSO: Will immigration reform be enough to combat Germany’s worker shortage?

The “Make it in Germany” portal, which has its own job exchange, will be expanded and further developed.

The government also wants to promote the German language both abroad and at home for example, by expanding digital language courses and exams.

The government also wants to simplify and accelerate the recognition procedures for foreign vocational qualifications. One of the planned measures is that the required documents can also be accepted in English or in the original language.

SHOW COMMENTS