Freelancing, but full-time for one client only

Hi, I’m Troy McClure. You might remember me from such self-help videos as "Smoke Yourself Thin" and "Get Some Confidence, Stupid!"

Now I’m looking for a job in Germany and freelancing is sort of being forced upon me.
Yes, I know, I know, I’ve run the search, I’ve read through a lot of those threads and yet I still think I should open one more.
You’ll have to bear with me on this one because details will be trickling in in the next few days, and I never considered being a freelancer before this day.

Here’s the situation: A recruitment agency is offering me, among other options, a job as Tech Support in, quote, “a big international organization�. They’re talking about 40 hours a week (8am to 6pm), 6 months training, a long term position and at 26 euros per hour for a fairly low level job that doesn’t require German, I’m interested.
BUT, they’re telling me this is a freelance job. I’m guessing maybe they can’t offer me a normal permanent/temporary contract because the structure of the organization doesn’t allow it. They told me I would have to get a VAT number from the Finanzamt and made it sound very casual.

Well, I’ve read some of the other threads and nothing about it looks casual. As I said I don’t have all the details but after my little research I’ve even come to doubt the legality of this thing.
Here are a few questions for which I haven't really found an answer in the other threads, particularly concerning costs for social security/pension/tax adviser:

- Freelancing with just one client, how’s that supposed to work? I’ve read a single client can’t account for more than 80% of a freelancer’s earnings.
- How much do you pay for social security and through which organization?
- How much do you pay for your pension and through which organization?
- A tax adviser/consultant is not for free, how much can I expect to pay for such services?
- Say I earn 49999 euros a year, how much of that is left after taxes, social security, pension, tax adviser expenses?
- You have to understand that I am by no means trying to make a career out of this. At the moment I need a job that doesn’t require German so that I can learn German on the side and find something more interesting in a couple of years when I do indeed speak this language better (I’ve got a master in competitive intelligence). So if at some point I want to stop doing this job and stop being a freelancer, is it going to be easy to get out of it?

Oh I almost forgot, I’m French, so there shouldn’t be any visa/work permit issues here.

This thing is still in the early stages, I haven't had an interview yet but I want to be prepared before going there.
What do you think? Can you answer some of my questions?

There is no strict definition, but you definitely can't work as a freelancer for a single client. It's illegal both for you and your "customer" as the government perceives you both to be avoiding employment liabilities.

Self employed are not obligated to pay this (and thereby not entitled to unemployment benefits)

Self employed are not obligated to pay this (and thereby not entitled to full state pension benefits) - most self employed take out a private pension, but this is up to you.

Depends on what they have to do for you and how much you can do yourself in keeping your papers in order. Reckon on €500-€5000 a year.

Not an easy calculation, especially when self employed as you have so many expenses that are offset against your income. Reckon on deductions around 30%-40%, but that's only a guide as it depends on your individual circumstances. Don't forget to add health insurance to the pile

Easily forgotten, I guess...

If they are suggesting they can only "employ" you as a freelancer, you are on tricky ground. If they will be your only source of income, you are potentially mutually conniving an illegal situation. It's been discussed before

Thanks a lot for your reply YorkshireLad6, this is helpful.
That confirms what I thought, this freelance thing is definitely not hassle free. And I should be careful with this specific offer, it's a bit fishy.
Thanks again!

Your tax advisor will refer to this as Scheinselbstständigkeit.

"You might remember me" is an overstatement to say the least, first I would need to know you. However your "Get Some Confidence, Stupid!" is proven to work, at least with yourself

If you take a freelancer position do not forget to multiply by a factor of 2 (your hourly rate without VAT) what you would normally expect to earn with a normal job. What might look as a lot of money might end up being not that much.

Good luck.

I'd not noticed the hourly rate on offer. €26/hour is pretty poor for any freelance job beyond floor cleaning, especially in the IT industry. I wouldn't get out of bed for double that.

Which agency was this, if you don't mind me asking?

I was in the same/similar position 7 months ago and took the job. Since then, it hasn't been completely smooth sailing and there's a lot of complexity to it but I enjoy the relative freedom.

huhuhu, Troy McClure.
It's true it doesn't make sense for those out there who don't watch the Simpsons.

Thanks for your reply though, it looks more and more like this is not a deal for me. I'm looking at other options. I'm meeting the guy from the agency on Friday so I will have more details by then.

Apart from the legality of working for one client, and the VERY low rate for a freelancer, the above seems strange to me:

40 hours a week as a freelancer? One stipulation for freelancers is that you do the necessary work to get the job done and can choose your hours yourself (within reason of course if you have meetings etc which you have to be at). You normaly get a packet, like 1000 hours in 6 months, and distribute those yourself. If they specifically dictate the hours to you, this will be another factor making the job illegal as a freelancer.

6 months training? Make sre you find out if you are allowed to bill for that time, or if you only start billing after the training, once you become productive.

Long term position as a freelancer?Also dubious. Most companies will give you a contract for 6 months max (could well be 3), with an option (but no guarantee) to extend.

Not true. Freelancers work in call centres, on support desks and alongside other office workers, and are often contractually obliged to work to a certain schedule or hours.

This is a call centre job to some extent. This is not freelancing in a traditional sort of way. And this is not paid much because, well, this doesn't require any real specific expertise, that's why.
Basically, this is a normal tech support job in a call centre type of environment, with normal office hours, not working from home, etc...
BUT, the company is paying a recruiting agency, and the agency, instead of paying the employee on a temporary contract, gets him to be a freelancer and asks to be billed by the freelancer.
This is a very weird arrangement if you ask me, I've got an appointment with them this afternoon but for something else, maybe I'll have enough time to ask more info.

It's not entirely weird, as it makes life MUCH easier for the employment agency and absolves them from all the usual employment issues. If this was a job for a short period (say up to 3 months) or was filling in for an absent employee it would be fine, but from your description this looks more like a long term "permanent" post and therefore bordering on the illegal...

It may well be possible to work fixed hours as a freelancer, but it is also one of the contributing factors in determining "Scheinselbständigkeit" (not in every case):


quoted from Berliner Kanzleien

I may be bing a bit dense here, I have been a freelancer for about 30 years nearly the last 10 working from Munich, i dont get out of bed for the hourly rate you are talking about, is the company you are working for realy going to pay you less than 300 a day?

I think I'm the dense one here. Really? You guys wouldn't get out of bed for 50k a year? Working in a call center? I'm doing specialized work for quite a bit less. But I guess I've got the disadvantage of living in a small town with no competitive employment options.

I've had enough problems with this gig to begin with, now I REALLY feel like an ass.

Okay, I'll say this one more time: this is not freelancing in a traditional sort of way.
This is basically a normal call centre job, and the recruitment agency is using the freelancing solution as a convenience over a temporary contract.
On top of that, I'm not a dotNet-, C#-, IT-wizzard and I have 0 years of experience. Considering this, in the real world, you don't get paid 300 euros for answering the phone. And that's fine.
As I said before, I never even considered being a freelancer before that, quite simply because I don't have any sort of expertise. This is an option that is being forced upon me, so to speak, and I'm trying to figure out how the whole thing works, and not whether they're paying me enough or not.
Is the situation a bit clearer now?

bohemka - are you freelance or employed? There's a big difference as far as pay is concerned (typically, freelancers would expect double the gross pay of an employee doing the same task)

He would get 50K year in hand if he works 8 hours a day, five days a week every single week of the year.
But you normally work only 200 days/year = 41.6k

But 19% is vat. 33.6K remain.

Add taxes, retirement, insurances, tax adviser, etc, etc, etc, and 50K in hand will only represent a 24k salary with very good will.
Still good for some people, very low for IT, and definitely not 50K.

Honestly, my situation is so f'd I don't which way is up. As you know, YL6, I'm technically neither freelancing nor employed. I'm illegal! I show up to an office five days a week, work, and get paid enough to pay my bills with enough left over for flowers for valentine's day. As an American I was overjoyed to get it in this small town.

They only will higher me as a freelancer (despite the fact they should just legitimately higher me as a full-time employee). Good news, though: I'll have to get a second job to pay my back taxes, so maybe I'll qualify for freelance status after all!

And the story continues: Now they want me to stay and work for them. And now the guy at the Ausländerbehörde needs another two months to check if I can get a freelance-permissible visa. (He said there was a new law and he needed to look into it. Right.) Makes no sense. I can stay here if my girlfriend swears she's paying for everything, but I can't stay here with her swearing she'll pay for everything if I pick up the odd job here and there. Is this some sort of twisted reverse affirmative action thing? It's full employment for me or nothing.

Didn't mean to hijack your post, Troy. Excellent intro, by the way.

Hey..I'm almost in the same situation like Troy..just want to check that I'm a non-EU citizen ..here on dependent visa..how will the Visa rules apply to me..if I'm offered a freelancing job..just like the above

you might get away with only having one customer for 6 months. after that the Finanzamt will start asking questions and eventually theyll just send you a letter saying you no longer have the right to write bills as a freelancer.

That €26 euro is probably without Mehrwertsteuer (tax) so you can add that on to your bills and then write all business expenses off against the tax. travel/equipment like computer/printer etc/training courses. which will mean youll technically have a little more cash to play with.

The reason all the other (loaded motherfuckers) posters are saying "double a normal employees wage if youre freelance" is that youre never guaranteed of work. obviously in your situation this isnt the case. well, it is and it isnt. youll have regular hours meaning if all goes well youll have a steady income. but remember, they can kick you out of there without even giving a reason. and then youre stuck with nothing.

freelancing isnt for everyone. i dont think its the right move for you - see if you can find something else that gives a bit more security. you can always go freelance when youre up and running.

That's not how it works. On a day to day basis the Finanzamt never see your bills. You could work for the same customer for years without them knowing. However, if you are reported, attract their attention, or simply undergo an accounting review (which happens, on average about every 10 years), they'll pick up on the fact. They could then prosecute both you and your "employer" if they suspect either of both of you are colluding to avoid employment laws.

I have been with my tax adviser this week and she told me the law has changed, there is no problem anymore. You can actually have only one client as Einzelfirma. But of course, the recommendation is always "ask your tax adviser"