Self-Employment in Germany

Project management

Located in the center of Western Europe, Germany is a major crossroads both economically and commercially. Germany has the biggest economy in Europe and the fourth largest economy in the world in terms of GDP. It is also home to the 2nd largest port in the Europe (after Rotterdam) as well as being home to the European Central Bank which set the monetary policy for the Eurozone. With so much going on in Germany, it’s no wonder why it’s estimated there are up to 400,000 independent contracts working in Germany today.

Self-employment within Germany is very popular

Self-employment (freelancing) is the most popular way for contracting within Germany. Unlike being employed under the AÜG laws, a self-employed individual doesn’t report to a management company. One of the reasons why self-employment is so popular is that social security contributions (health, unemployment, pension) are voluntary. In order to be seen as a freelancer in Germany, the following conditions will be considered:

  • Turnover of clients: If five sixths of your business comes from one client, you will not be considered a freelancer
  • If you are a part of the organization of a client and depend on their instruction, you will not be considered a freelancer.

Conditions public unemployment fund

A self-employed person can voluntarily contribute to the public unemployment fund if they desire; however, the following conditions must be met:

  • Self-employed workers must work at least 15 hours per week for their company
  • They must have contributed to the unemployment insurance fund for at least twelve months out of the past two years, or
  • They must have already received unemployment benefits (i.e. sickness or maternity benefits)

Health insurance in Germany

While a self-employed worker is not required to contribute to the health insurance fund, since 2009 it has been illegal to be in Germany without “adequate medical coverage” which is generally over the levels provided by most travel and international insurance companies. There are three ways to meet this requirement:

  • Contribute to the ‘health-only’ portion of the German Social Security Scheme, this amounts to about 15% of taxable income.
  • Obtaining an A1 from home authorities. The cost of this is the cost of health-care contributions in the home country
  • Enrollment in a private health care policy from an approved German provider that meets the “adequate” level of coverage

Information about freelancing in Germany

For more information about freelancing in Germany, or with help with employment services, payroll services, or have any questions, feel free contact us at info@got.international and we will get back to you as soon as possible.