Have a side hustle while working it’s a great way to improve your financial situation and work your way to self-employment. However, someone who considers working as a freelancer while employed full-time in Germany has to pay attention to special regulations.
You can work as a freelancer in Germany if your residence permit allows you to do so. Check the Zusatzblatt for phrase Selbständige Arbeit gestattet. If you don’t see it there is only one way to become self-employed in Germany while working full-time: apply for a freelance visa.
An employee who works as a freelancer or self-employed in addition to the full-time job called Nebentätigkeit in Germany, which is literally translated as a side activity.
As with any self-employment in Germany you need to do it on a legal way, how exactly you will learn in this article.
How to Become a Freelancer While Working a Day Job in Germany?
Check your residence permit
EU and EEA citizens don’t have to worry they can work and be self-employed without any permit, but all others need to be aware of what they can and can not do in Germany.
All non-EU citizens must have at least a residence permit which allows them to work. Depending on which residence permit you have your might be allowed to work as a freelancer or not.
EU Blue Card
Blue Card holders often allowed to work on the side as long as their main job remains to be full-time. You need to check the Zusatzblatt on your visa, if you see Selbständige Arbeit gestattet in means you can do freelance activities.
If not you can only work as a freelancer after receiving a freelance visa. You can have it as an addition to the EU Blue Card.
Work residence permit
Holders of classic residence permit will work permission should also check the Zusatzblatt for same words.
If your residence permit doesn’t allow you to work independently than an application for a freelance visa must follow. Same as with the EU Blue card you can hold both freelance and your current working visa.
Students aren’t allowed to work as a freelancer, however they can be undertake normal employment. It shouldn’t be full-time though, up to 20 hours per week in fine.
To become self-employed students also need to have a freelance visa in addition to the student permit. After finishing their studies they can become full-time freelancers quite easily if work they do related to the study subject.
Apply for freelance visa if needed
Before the visa application, you should prove whether you are categorized as Freiberufler/freelancer or simply self-employed (Selbständiger) in Germany. It will play a significant role for the chances of receiving a freelance visa.
Read a full article about differences between freelance and self-employment in Germany.
The requirements for these two categories are different:
These are truly freelancers on the German language, a particular group of professions who can work independently. For example, doctors, lawyers, artists, teachers, scientists, engineers, software developers and etc.(see the full list below).
You can see the full list of documents for a freelance visa on the official website.
These particular professions can receive a freelance visa more easily and don’t need to fulfil many requirements as another category.
If you are not a Freiberufler, you are Selbständiger (self-employed). You still can apply for a freelance visa but requirements are different.
Selbständige will need to open a business/trade (Gewerbe) in order to work in Germany. You can see the full list of documents on the official website.
A foreigner may be granted a residence permit for the pursuit of a self-employed occupation if:
- an economic interest or a regional need exists,
- the occupation is expected to have a positive impact on the economy and
- the implementation is financed by equity or a loan commitment
Although different conditions apply to university graduates, researchers and scientists.
As you can see these main requirements must be fulfilled if you don’t fall into the category of Freiberufe, which can be quite difficult.
Taxes in Germany don’t sound that scary anymore. Freelancers can now manage their taxes efficiently and affordable with Sorted. Sorted operates as an online platform and manages your invoices, expenses & income, and submits all papers to the tax office.
Freiberufe is also called liberal professions in Germany which include:
- medical professions: doctors, dentists, midwives, practitioners of alternative medicine, psychologists, physiotherapists and occupational therapists
- lawyers, notaries, attorneys
- coaches, teachers
- graphic designers
- engineers (IT included), architects
- commercial chemists
- auditors, inspectors, tax consultants, economics and business consultants
- journalists, writers, photojournalists
- interpreters, translators
- traffic controllers
Anyone who doesn’t fall into one of those categories needs to apply as a business owner/selbständige. Usually, people register a one-person business (Einzelunternehmer).
However, writers, journalists, and artists of all types can also apply for the Artist Visa, a special subcategory of the Freelance Visa.
Check out in-depth article on how to apply for a freelance visa here.
Check out the most recommended health insurance in Germany, Ottonova, it’s customized for foreign employees, expats, freelancers, and self-employed. Another option would be private insurance from Feather, which is suitable for self-employed people with relatively high incomes.
Be aware that everyone needs health insurance in Germany. Check out the most recommended insurance in Germany, Ottonova, it’s customized for foreign employees, expats, freelancers, and self-employed. Another option would be private insurance from Feather, which is suitable for self-employed people with relatively high income.
Ask your employer
Assume you can work as a freelancer or ready to apply for another visa, the next important step is to ask your employer if he okay with your side hustle.
Although employers can not prohibit you do work as a freelancer, as far it’s not clearly written in your work contract. Nevertheless, asking your boss beforehand is recommended so you can avoid unpleasant consequences.
For instance, your contact might contain a clause that you must obtain your employer’s agreement before taking any other paid work, whether as an employee or self-employed.
Therefore working as a freelancing without informing your boss will contradict a contract and can lead to termination and this is last we want to happen.
Also, keep in mind, those self-employment activities on a side should not exceed 18 hours a week and salary shouldn’t be higher than the income from work.
So if you plan to work or earn more than that, asking your boss it doesn’t really make sense and you should work part-time or quit otherweise.
Make Your Business Legal in Germany
To start working on yourself you need to get to know the German government about your idea in the first place. All self-employed activities must be registered!
Therefore people who categorized as Freibefufler need to show up in Fiananzamt, and all who don’t fall into this category – in the trade office (Gewerbeamt) to register their business and after in the Finanzamt as well.
Sometimes it can be hard to determine if it’s Freiberuf or you need to register a Gewerbe (business). Especially in the IT sector, such as programmers or web designers, the classification is often controversial.
If you fall into the category of Freiberuf, you only need to register your side hustle with Finanzamt and pay income tax if earnings higher than 9,408 EUR in a year.
Income tax are progressive, the higher the earnings the higher the rate, starting point is 14% and up to 45%.
For someone who wants to work on another company as a part-time employee (Mini-Job) in addition to their main job, don’t have to pay income tax if earnings are under 450 EUR per month.
With a profit from the Gewerbe (business), additional trade tax must be paid, but only with annual earnings from 24,500 EUR.
If your profession falls into Freiberuf you don’t need to register a trade, and so you pay no trade tax. Furthermore, there is no accounting obligation.
Consequently, if you will register a business, bookkeeping must be done properly, you might even want to hire a specialist help for this.
VAT tax is the next obligation for both small businesses and freelancers. If your annual revenue/income under 17,500 EUR in the first year and less than 50,000 EUR in the following year, you will be exempt from VAT tax.
It’s a great advantage for your side hustle to keep it low expenses. This also will save you time on bureaucratic work, as you don’t have to submit a VAT declaration every month or quarter.
After registering with the Finanzamt (tax office), you will receive your tax number and VAT identification number (UID). As a self-employed, you will need it for VAT declarations (if required) and for billing the customers.
As a freelancer or self-employed, you will have to do yearly tax returns (Einkommensteuererklärung) for your profits and if you have a business also a business tax declaration (Gewerbesteuererklärung).
Yearly final returns on VAT (Umsatzsteuererklärung) also need to be submitted to the Finanzamt if you pay VAT taxes (see above).
Take an online consultation with a German tax advisor before starting any self-employed work. You can choose between two communication ways: email and phone. The call with an expert starts from 0,42 EUR per minute, instead of paying hundredths of euros for the meeting in person.
Insurances in Germany
Taxes in one tough part of the self-employment in Germany and another is – insurances.
One of the biggest advantages of working on the side in Germany that you can keep your statutory health insurance from your main job.
As a part-time self-employed person, you don’t need additional health insurance unless the freelancing hustle economically doesn’t outweigh the main job and you work for yourself a maximum of 18 hours per week.
If this happens, additional private or public insurance is required. With private health insurance, there are different rates, depending on the provider and coverage you want, but the public will always charge 14,9% of your income. (check out all insurance options in Germany here.
Those who make over 52,200 EUR a year will be required to purchase a private insurance plan. However, you can apply for this already earlier, with a lower income.
Public health insurance is good for anything below this amount, they also will refer you to the private insurance with high earning.
Moreover, private insurance will be also smarter than the public, since it doesn’t charge a percentage of your profits but the agreed rate. The optimal private insurance provider in Germany can be found on the platform Tarifcheck, but most freelancers, self-employed, and ex-pats opt for Ottonova.
In the end, you can pay into statutory insurance, which costs a minimum of around 300 EUR a month. And if you’re a younger, healthier freelancer, private insurance will probably be cheaper for you at around 100-150 EUR per month.
As your earnings grow public health insurance contribution will grow as well, it can be hard to see how you losing money and aren’t really need the insurance since you already have one from your main job.
To avoid it taking out the private plan from the beginning is recommended.
Nevertheless, it’s better stay in a green zone and earn less than with your main job.
If your side income exceeds 400 EUR per month, you should also check whether your liability insurance is still sufficient for your activities or whether you need to extend the insurance cover. If not find your coverage here.
Pension and Unemployment insurances
Same as with the health insurance, as far as you don’t exceed the limit you won’t pay for any insurance, but if so pension and unemployment insurance contributions must be paid each month.
What will be a significant cut from your income: unemployment 3% and pension 18,7%!
So keep in mind, your earning with side hustle must be less than the main job and you shouldn’t spend more than 18 hours on it. So insurances can be minimized to zero.
Otherwise, expect to pay at least 36,6% of your profit in insurances and approx. 24% in income tax – over half of the income will go to the government, not sure if your hard work worth in the end.
Where to Look for Freelance Work in Germany?
Germany is growing on freelance, still country isn’t that advance as the USA for example but there are still some good resources for local freelancers.
German resources with mostly German customers:
Fiverr by far the biggest and most known platform as well as for freelancers and customers. Moreover, Fiverr is the market space for business, where you can find a job in most common freelance spaces such as design, writing, programming for customers from all over the world.
So far freelancers got paid 50 million + times on Fiverr. Overall there are 200 categories of freelance services that you can offer. The subscription on Fiverr is free.
Have a Second Job in Germany
All right, as you can see to work as a freelancer might be not that easy in Germany, however, you can work part-time for another employer while working full-time on your main job.
Usually you don’t need either permission from your employer or government to work in your free time as an employee.
There are also special regulations, such as your income should be under 450 EUR per month to avoid income tax and additional insurance obligations.
Besides, you can’t work for a business competitor of your employer, since it’s against the rules. Moreover, some working contracts might restrict you from working on weekends or vacation days.
In any case you should speak with your employer before undertake any additional employment.
Recommended products and services in Germany:
- Health insurance for students
- Health insurance for expats, employees, business owners, freelancers
- Best price & value sim card and best deal overall including high-speed internet
- Blocked banking account for students
- Order translation of the documents online
- Check how much you can earn in Germany (for all professions)
- Apply for a job or vocational training in Germany by using one of the thousands of different templates carefully crafted for a particular job profile
- Free online consultation/assessment with German lawyers and tax advisors
- Submit your tax declaration in Germany online and at an affordable price
- Liability insurance
- Car insurance
- Compare providers and rates for various insurances, sim cards, internet, electricity, banking accounts, credits & loans, and more.
This post contains affiliate links. The affiliate link means I may earn an advertising/referral fee if you make a purchase through my link, without extra cost to you. It helps to keep this blog afloat. Thanks for your support.