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Freelance rules for language teachers

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Posted

Can anyone clarify the rules on this law. i am an freelance engish teacher and Im being told that 1/6 of my income is the most that I can earn from any 1 language school.

 

Can anyone clarify this law at all.

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Posted

Hello jahill78,

 

Scheinselbständigkeit is not so much a law than a state which is given when you work on honorary based contracts.

It affects your social insurance status which says that if you are writing fees just for one contractor (mainly 5/6 of your income) who could also employ you directly you just "seem" to work on your own behalf.

As a lot of employers in the past years tend to avoid the social contribution payments for their employees, the legislation wants to make sure, health insurances still get their money. Being on your own that way you can easily be told, you have to pay for your health insurance privately. So you better make sure, you have two or more positions to work for when on fee based level.

 

This rule is quite a little "grey zone" over here and not easy to understand. People are told to ask for the "Steuerberater" but often they don't have a clue what it's all about. I am no counsillor neither, i just give lessons as a sport teacher on fee based contracts but in the meanwhile am rather happy to work in organizations than in a gym or else, as you have to pay a third of your income in taxes as well...

 

Hope this helps a little, you can also watch into wikipedia for "Scheinselbständigkeit" which explains the main.

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Posted

For some reason, 60% sticks in my mind as the maximum percentage of income a freelancer can make from one company. The laws may have changed since I was teaching English 4 years ago, though.

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Posted

It is indeed 60% - this is current, recently received info.

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Posted

Since this issue came to light a few years ago most schools limit the hours they offer to their freelancers. It makes sense to work for more than school anyway, because then if a school fails to pay you on time you still have money coming in from another source.

 

That said, I can't see how any school knows what percentage of your income they are paying unless you choose to share with them the details of how much others are paying you.

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Posted

Yes, this is what a tax consultant I know said, too, and she also claimed that it is the hiring company, not the contractor that would have problems with the tax authorities...not sure if this is true, but what I heard...

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Posted

The schools concern is that if they employ you to do as much work as a full-timer would, they may become liable to pay social insurance and take the responsibilities of an employer. That's why they restrict the hours they offer, but as I said before it makes little sense to have all your work with one agency when you are freelancing.

 

Do a search and look at the threads about freelancing and pensions. This is the area where the percentage of overall income that comes from teaching is relevant.

 

And have a look at this teachers' forum too

 

http://elt.yuku.com/belt

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Posted

Okay, so I'm sorry if I'm being a little stupid but...

 

If I'm working for a language school freelance, and they are giving me enough hours a week, with this rule I have to find work at another school as well, therefore dropping hours at the school that is already offering me good work for a chance of another school that may not?

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Posted

yes, otherwise the taxman may assess you as a disguised employee.

 

But is it 60% weekly or just 60% of annual income. You could work 7 months, then move to another one.

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Posted

 

Okay, so I'm sorry if I'm being a little stupid but...

 

If I'm working for a language school freelance, and they are giving me enough hours a week, with this rule I have to find work at another school as well, therefore dropping hours at the school that is already offering me good work for a chance of another school that may not?

 

 

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Posted

Cheers SteveV - will keep this in mind over the next few months. Good luck with your German ;)

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Posted

The scheinselbstandig rule is rarely enforced round my way and when it is, they go after the exploitative employers (such as ones paying people low wages to work in fast food outlets full-time and with no choice over working hours).

 

Loads and loads of freelancers have long periods of getting most / all income from one source - everyone from language teachers on 5k to consultants in 6 figures. Any agency I work with who asks me to sign one of these 5/6 declarations, I always ask them what their experience is of the authorities' enforcing the rules. The answer is they get absolutely no interest whatsoever. The tax authorities also know I (and my partner and lots of other freelancers) have periods of only one income - not ever been a problem. However, in a federal republic, procedures are local so what I see might not be what others see.

 

It's a process with clients like language schools. They give you a form to show they know the rules (which they can provide to the authorities to show they did the right thing). You sign a form to say you know the rules (and you have various get-outs in the unlikely even you are ever asked). End.

 

Steve's point is also spot on - over what period? If I had just one client at a point in time, I'd point to periods I worked with others, and other work I was doing. And, particularly at the moment, it's not a given one can find more than one client. God knows there's enough people trying to find one source of income here without pressurising others to find at least two! The authorities (at least round here) are pragmatic on things like that I think.

 

However, if serious to meet it, then the answers are already here - go to more than one school or build up your private work (and limit your hours at one school if needed).

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Posted

anyone in a teaching profession - regardless with how many schools one is connected - should remember that he/she is liable to pay public pension contributions, too!

Only way around it is either to get an excemption from the Bundesrentanstalt when setting up for the first time in Germany as a self-employed person - Thomas Zitzelsberrger from Expattax knows how to do this... Or to have an employee with a least 401 EUR salary per month. Otherwise AFAIK teaches are always liable for these pension contributions and will get back-charged for up to five years if the school is being audited and they find that you have not been paying into the public pension. Payments into private pension schemes to not replace this liability in any way or form in contrast to popular opinions found in some threads...

 

Cheerio

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Posted

I've got a few questions to ask, and one of them was the question addressed in this thread, so hopefully people will consider this an appropriate place.

 

First of all, can anyone clarify the question raised in this thread: over what period is it determined whether enough work has come from different sources?

 

Second question: Is it allowed to use a trading name as a freelancer? For example, to use a catchy sounding company name instead of/in addition to my real name, or is this something that would confuse invoicing and force me into being another sort of business rather than a freelancer?

 

Third question: Are there any mandatory/recommended checks that need to be done to be able to work with children in Germany? I want to have the option of being able to teach children as well as adults, but I don't want to get into any trouble if there is something like a CRB check (like in Britain) that I should have had carried out.

 

Finally: Can I do any work as an employee (for example in a pub) without losing my ability to have private rather than public health insurance? If so, how much can I do? So far I'm not making much money teaching (read as none), and I am going to need to supplement my income somewhere if things don't pick up in the new year.

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Posted

 

First of all, can anyone clarify the question raised in this thread: over what period is it determined whether enough work has come from different sources?

 

A year.

 

But since you want to be a teacher this point is moot, as a teacher you always have to pay 18.9% public pension contribution of your turnover, you can't get out of it.

The only thing you can do is hope that they don't notice you.

 

 

Second question: Is it allowed to use a trading name as a freelancer? For example, to use a catchy sounding company name instead of/in addition to my real name, or is this something that would confuse invoicing and force me into being another sort of business rather than a freelancer?

 

You can use any fantasy name you like for your business, as long as it contains at least your family name and isn't misleading, i.e. no GmbH in the name, or, for example, Ministry.

For details see here.

 

 

Third question: Are there any mandatory/recommended checks that need to be done to be able to work with children in Germany? I want to have the option of being able to teach children as well as adults, but I don't want to get into any trouble if there is something like a CRB check (like in Britain) that I should have had carried out.

 

No.

 

 

Finally: Can I do any work as an employee (for example in a pub) without losing my ability to have private rather than public health insurance? If so, how much can I do?

 

Only if you earn less than 450€ a month (in 2012: 400€).

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Posted

Thanks PandaMunich, again.

 

I'm disappointed I need to include my family name - it limits the possibilities quite a bit, and makes me wonder if it is worth it, but obviously that isn't your fault ;).

 

The need to use my real name in so many places in Germany bothers me a lot. Especially the impressum thing on websites. I don't have any social networking accounts for that reason.

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