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EXPLAINED: What are the best bank accounts in Germany for freelancers?

Germany is consistently ranked as a top destination for freelancers and digital nomads. But being self-employed can make finding the right bank a challenge.

Published: 3 April 2024 12:08 CEST
A freelancer works on a laptop in a cafe in Hamburg
A freelancer works on a laptop in a cafe in Hamburg. Photo: picture alliance/dpa/dpa-tmn | Christin Klose

While freelancers are not legally required to have a separate business banking account, it can be an asset come tax time. Here is what to consider when banking in Germany if you are self-employed. 

Why should freelancers have a business bank account?

A business banking account lets you save time during tax season when you must declare your taxes in Germany and send in your accounting to the finance office. This process is simpler when you separate your personal earnings  from the expenses and incomes from your side hustle or freelance business. It also allows you to stay within the terms and conditions of your bank. 

You may be violating your bank’s terms and conditions by using your private checking account for business purposes like receiving payments from clients. 

READ ALSO: How to get a freelance visa for Germany from outside the EU

A person holds cash from an ATM machine in Germany. The country is facing tough economic times.

A person holds cash from an ATM machine in Germany. Photo: picture alliance/dpa | Angelika Warmuth

What types of German banks are available to freelancers?

Germany has a wide variety of banks, but for the self-employed two kinds of banks should be prioritised. 

Traditional banks operate with a headquarters and several branches across the country or world. 

Digital banks offer the same services as a traditional bank but operate with only a head office. These banks do not require you to visit a branch when opening an account. Instead, your identity may be verified online or through phone. 

READ ALSO: Why it’s almost impossible to find a free bank account in Germany

What should I look for in a business bank account?

Before choosing a bank in Germany you should keep in mind the following before you open one:

  • Costs: Double check the costs of opening an account, cash withdrawals and monthly maintenance of an account. Some banks charge fees to obtain a physical debit / credit card. Others offer digital cards at no additional costs. 
  • Customer service offerings: Before opening a bank account, it is important to check what languages customer service chats and phone lines are offered in. This can help you avoid headaches in the future when questions about your account arise. 
  • Add-on services: Some business bank accounts offer options or premium add-ons to create invoices and automatically calculate your taxes which can be an asset for freelancers. 

Can I open a bank account before entering Germany?

Yes, but it can be a challenge if you are not an EU citizen. To open an account when outside the country, you will need to look for a “direktbank” that lets customers open an account from outside of Germany. You must also have a German visa and address ready to submit the required documents. 

What are some of the top options for freelancers?

Kontist

Kontist is a digital bank consistently ranked as one of the best options in Germany for freelancers and small business owners. It is a digital bank exclusively catering to freelancers with a fully digital bank account. It offers four tiers of account options: free, premium, accounting and complete that range from free to €79 per month. 

The free account gives users a virtual debit card, digital banking app,10 free transactions per month and the ability to create two invoices per month. It also lets you scan receipts to keep track of business expenses. The free account remains kostenlos so long as you maintain a balance of €300. It is also worth noting that the account does charge a 1.7 percent foreign exchange fee and that cash deposits are not possible at this time. 

N26 Business

The Berlin-based digital bank offers four different business accounts with freelancers in mind. 

The accounts range from free to €16.90 per month. With the free base account you get three free ATM withdrawals in Germany every month and unlimited free ATM withdrawals when you’re on business trips in the Eurozone. 

The account also does not charge foreign transaction fees for payments in other currencies. It is also worth noting that N26 offers users customer support in Germany, English, French, Spanish and Italian. But phone support is not available with the free account.

N26

An N26 customer checks his bank account balance on his mobile phone. Photo by CardMapr.nl on Unsplash

Commerzbank

Commerzbank offers freelancers looking for a business account hosted by a traditional bank a compelling option. It offers accounts for all major legal forms of businesses, so it is not solely catered for freelancers and the self-employed, but can still take care of these users’ needs. 

With a Commerzbank “KlassikGeschäftskonto” (classic business account) the first six months of banking are free, whereas afterwards it will be €12.90 per month. Those who open a business account online can also receive a €100 bonus. Digital sales and payment information are available at additional costs. Cash deposits and withdrawals are also available at Commerzbank ATMs at €2.50 per order.

Fyrst

Fyrst is a joint venture between Deutsche Bank and Postbank. The business bank offers freelancers and the self-employed two account options that range from free to €10 per month. The base account includes 50 transactions and a free card.  

While the online banking is only available in German, it does offer users the ability to withdraw and deposit money at up to 7,000 ATMs across the country. The bank also offers users discounted professional accounting and payment solutions with its partners that can be integrated into the Fyrst banking platform. 

Qonto

Qonto is a digital-first bank based in France. The company offers freelancers banking options that range from €11 to €45 per month, the prices are cheaper when users pay for a yearly subscription. The base account option includes a debit card, 30 transfers or direct debits per month and the ability to integrate other platforms. For an additional €8 a month, users can access automated bookkeeping tools and provide their accountant temporary access to their account. 

You can also access the customer service team through WhatsApp. 

Naturally, this is not an exhaustive list of all the many options available to freelancers in Germany. You may also want to consider Wise’s Business account, Finom, and Penta for your banking needs. 

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WORKING IN GERMANY

Five things to know about salaries in Germany

Finding a job is typically a top priority when planning a move to Germany. The country boasts the third largest economy in the world and a continuing need for skilled professionals. 

Published: 2 May 2024 12:26 CEST
Five things to know about salaries in Germany

If you are moving to Germany, you might soon start looking for a job in the country. However, like many other aspects of living abroad, there are several cultural differences and specificities when it comes to job hunting in Germany – especially when it comes to salaries.

Here are five things to know about salaries in Germany.

There is a minimum wage in Germany

Germany’s minimum wage of €12.41 per hour, pre-tax came into effect at the start of this year. This amounts to a monthly salary of €2,054 which ranks ninth in the world. The minimum wage will rise again in 2025 to €12.82 per hour before tax deductions.

There have been calls recently to hike the salary up higher to €14 per hour.

READ ALSO: Millions of workers in Germany ‘earning less than €14 per hour’

Find out salary expectations

Germany does not require companies to list salary ranges for listed positions. But that may be changing soon. The EU parliament passed a wage transparency law to require companies to publish annual reports detailing wage and wage discrepancy information. The rules, which are set to go into effect in 2027, are intended to help close the gender pay gap. 

In the meantime, employees can utilise online resources to find industry averages and expectations for different roles:

  • Gehalt.de offers users access to salary information on more than 800 professions
  • Online platform, Kununu provides compensation information and employer reviews to users in the DACH region  
  • Berlin residents can utilise REDSOFA’s salary survey for an overview of salary averages in the country’s capital city

As of April 2023 the average gross monthly salary was €4,323 according to Germany’s Federal Statistical Office.

Two-thirds of full time workers make less than this average monthly salary and one-third of workers earn more than this average monthly salary.

While wages after deductions may be less than similar roles in other countries, it is also important to take into consideration what other benefits come with a salary. Paid holiday leave, pension contributions, long notice periods and annual bonuses can help make up some of that difference. 

READ ALSO: How much do employees in Germany typically earn?

Check your payment schedule

Internationals can usually expect their salary once a month when working in Germany. Many German companies choose to pay employees either on the 1st or 15th of the month. It is also important to note that most employees can expect to receive their first pay check within 30 or 45 days of starting. 

For positions that offer yearly bonuses, these payments are included in a 13th pay check which are subject to income tax.  

A person works on a laptop.

A person works on a laptop. Image by Bartek Zakrzewski from Pixabay

How many hours do you work?

When looking for a job, don’t forget to check how many hours you can expect. Job descriptions will include expectations for time commitments. 

Mini-jobs, as expected from the name, are limited in hours and pay. Employees can expect up to €538 per month. Mini-jobs do not provide social security because they do not require social security contributions. Employees are also not automatically covered by health and nursing care insurance. 

Teilzeit, or part time jobs, are defined as any job where working hours are less than a full time position.

A common misconception is that part-time work requires working 20 hours or less a week. But an employee working five days a week for 30 hours, at a position that is typically 40 hours when full time can also be defined as a part time worker. 

READ ALSO: The rules in Germany around ‘mini’ and ‘midi jobs’

In fact, Germany has a term for workers who work between 28 and 36 hours a week. Vollzeitnahe Teilzeit, or nearly full time part time workers, can be a popular choice for some people, including parents. These positions can give employees more flexibility to balance work and family responsibilities. It is important to note that these workers are paid according to their time worked, so it will still amount to less than full time.

Depending on the work schedule, part time employees can earn the same amount of vacation as their full-time counterparts. That’s because holiday leave is calculated based on days worked, not hours. If a part time worker comes in five days a week, they will be eligible for at least 20 days of holiday. If that same part time worker comes in three days a week, they will be legally entitled to twelve days of vacation, even if they worked the same hours as the other employee. 

In most companies, weekly working hours between 35 and 40 hours are considered full-time employment or Vollzeitbeschäftigung. 

Watch out for the gross v. net difference

Before you sign the dotted line, it will be important to check how much of your gross salary you’ll be able to keep come pay day. Companies that include salary expectations in descriptions include gross salary (Bruttoeinkommen) – not the net income after taxes and deductions (Nettoeinkommen). The amount deducted will depend on how much you earn, the tax class you’re in and on other factors such as how much you’re paying for healthcare but it is usually around 40 percent. 

Salaried employees can find information on the deductions on their pay slip. Some to expect to see include:

  • Taxes are deducted directly from the gross pay. The amount is based on the tax bracket your salary falls within 
  • A percentage of your gross salary is also deducted for your pension / retirement contributions
  • Church taxes between eight and nine percent of your salary will also be due if you are affiliated with a religion
  • Unemployment insurance amounts to a 2.5 percent deduction from your gross salary. It is important to note that the insurance covers a salary up to €90,600 
  • Health insurance contribution rates are typically split between employers and employees. The rate depends on the provider. In 2024, the TK contribution rate to health insurance is 15.8 percent of the gross income

READ ALSO: What you need to know about your payslip in Germany 

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