Freiberuflich - how different is it from permanent

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Hi

 

I have always been working as software developer on permanent employment but from dienstleistung firmen

am married and have a son , so we are having a family health insurance

 

I am exploring the option of working as a "freiberufler" . it looks like it is possible to make more money compared to permanent employement.

 

I am writing this post , to find out how it will affect the current life

 

- i know , there will be no family insurance possible , so how can i get medical insurance for my family? and how much will it cost?

- i will get euro on per hour basis, so what should i pay from this money? i mean , should i pay Arbeitslosversicherung,Rentenversicherung,etc

- what else will change compared to having a permanent employement?

 

please advise

 

Regards

kmm

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I suggest you read this thread: http://www.toytowngermany.com/lofi/index.php/t152714.html and then the one on Scheinselbständigkeit: http://www.toytowngermany.com/lofi/index.php/t71297.html

 

So, as long you are not scheinselbständig, you won't as a freelance software programmer ever again pay any unemployment or public pension insurance.

 

If you have been in the public health insurance for over a year, you can remain a voluntary member there and have your family covered with your contribution just like when you were an employee. It will cost 14.9% of all your income, see here for details: http://www.toytowngermany.com/lofi/index.php/t238650.html

 

You will have to tell the Finanzamt that you want to start freelancing and fill in the "Fragebogen zur steuerlichen Erfassung", depending on your visa status, you might also need a visa for freelancing, for details see this TT wiki article: http://www.toytowngermany.com/wiki/Freelancing_in_Germany

 

You will also have to charge VAT and forward said VAT to the Finanzamt every month, please read the TT Elster attentively: http://www.toytowngermany.com/wiki/ELSTER

 

You will also have to pre-pay your Einkommensteuer four times a year, based on your previous year's income (the first year they estimate it).

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ok thanks for those links , i went thro

but i was not able to figure out if i am / or not scheinbeständig

 

i ve been working as employee since 2003 , does that say anything? if i am or not scheinbeständig?

 

regards

kmm

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Short answer: No, you are not scheinselbständig. That is something you have to worry about in the future, once you become self-employed.

 

scheinselbständig:

schein=appearing to be, but not in reality;

selbständig=self-employed.

 

An employee is not scheinselbständig, he is neither a true self-employed nor masquerading as self-employed, he is simply an employee who always has to pay social security contributions.

 

Someone scheinselbständig is someone who is self-employed but who has only one main client, so in the eyes of the German state he should just be an employee and follow orders and pay social security contributions.

 

You want to be freiberuflich=freelancer, this is what somebody self-employed who does "brain" work is called, it's a sub-class of self-employed.

 

The true self-employed do not have to pay social security contributions since they are considered responsible enough to take care of their own old age pension income and to have enough money saved to bridge times when they can't find a client = when they are unemployed.

 

So, once you become self-employed you will have to act responsibly and find many clients and not have only one main client from whom you make nearly all your money (or apply for an exemption from this rule for your first 3 years as a self-employed, it's explained in the Scheinselbständig-thread how to do this using form V050). You are also not allowed to quit your job and then continue doing exactly the same job as a self-employed.

 

If you don't follow these rules, the German state will say that you are scheinselbständig, i.e. not a responsible true self-employed and will make you back-pay social security contributions, since they say you can't be trusted to take proper care of yourself and would be better off having to contribute into the public pension and unemployment insurances.

 

Please read that Scheinselbständigkeit thread again attentively, and come back here with questions if you still don't understand it. I will then try to explain it in different words.

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@ kmm1977:

 

I am a freelancer (but not a software developer). Here are a few things to remember.

 

If you are married with children, stay publicly medically insured. If you go private, you will have to take out separate policies for your wife and children. That will be far more expensive. Under the public system, your wife and children are currently insured free.

 

You will not be required to stay in the public pension system but it might not be a bad idea to do so. You can pay a reduced rate just for a pension but nothing else. Enquire. But whatever you do, take out additional (private) retirement insurance if you haven't already done so. The way the world is going you'll need it.

 

If you become self-employed, you will not be entitled to any unemployment insurance - not even on a voluntary basis. If your business craps out, you will have to apply for Hartz IV unless you can find another job as an employee again.

 

Remember that you will have to find lots more clients to keep the money coming in. Even if you're not working, the bills will still have to be paid.

 

Take out some form of accident/illness/disability insurance that will cover you if you can't work for a while due to accident/illness/disability.

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Hey all! This forum is one of the most reliable sources of information I've seen so far and the content that some people produce is incredible. I need some help making a decision on an opportunity that is at the corner, so any type of help is appreciated.
 

Long story short, I'm employed, but I have a chance to work remotey for a US company as a freelancer.

  • EU national, employed in Germany, no visa problems
  • public health insurance; married with children, wife at home with children, so the public health insurance is pretty good due to the partner&children coverage
  • tax category III
  • working in IT (software development, but could be assimilated to web development)
  • diploma in IT from my home country

I have an opportunity to work remotely for a US company without an office in Germany. A payroll provider doesn't look like an option for them, so they are offering a freelance contract, which means I need to become some kind of 'Selbständig': Freiberufer or Gewerbetreibender. 

 

My questions are in the area of: what could go wrong, what could I lose? I did search Toytown, but somehow I'm not convinced yet, since some posts are from 2008 when IT professionals may or may have not been accepted as Freiberufer.

 

So, if I become Selbständig:

  • are my children still entitled to Kindergeld? Seems yes, according to the information on Toytown.
  • will the fact that I'm self employed affect the public health insurance in any way? Is there a checkbox that I need to make sure NOT to check, in order to remain in the public health system? Both my current income and the freelance income are above the threshold of private insurance, but public health is better for me.
  • will my wife & children still be covered by health insurance, if I continue to pay my contributions as Selbständig?
  • my new income would be my current gross salary + Arbeitsgeberanteil (whatever the employers pay for me according to http://www.brutto-netto-rechner.info/gehalt/gehaltsrechner-arbeitgeber.php + a few thousand euros more). So this means I could cover all taxes: the ones I owe as an employee and the ones that an employer would owe for me if I'd be employed. Is there anything else that I should consider? For orientation, how much money should I count for a Steuerberater, to be all safe & sound?
  • I won't be allowed to have other employers or contract partners due to the COI policy. This means, that, in the eye of the German system, I'll be having income from one single source, therefore I'd be either "Scheinselbständigkeit" or "Arbeitnehmerähnlich selbstständig". I don't really understand the difference between them, but I'm still studying. Any summary is very appreciated :). Now the question is: how can I be affected, can I be accused of anything due to some mistake in the process? Is it only something about taxation, can I avoid problems if I decide to pay absolutely all taxes or contributions that an employee and his company would pay? Is it only a taxation mistake that I could make, or can it have legal implications?
  • My research shows that I can be a Freiberufler, which makes accounting simple, but am I missing something? Should I be a Gewerbetreibender?
  • Any chance that I'll be forced to pay VAT or anything that I don't expect to pay, which would in the end bring my new income to a lower level than the salary income?
  • Any tips on how to optimize and make most of a probable Selbständig adventure? Or the best is not to optimize anything and just pay 100% of what an employee would pay?

Thank you extremely much!

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42 minutes ago, radual said:

are my children still entitled to Kindergeld? Seems yes, according to the information on Toytown.

 

Yes.

 

42 minutes ago, radual said:

will the fact that I'm self employed affect the public health insurance in any way? Is there a checkbox that I need to make sure NOT to check, in order to remain in the public health system? Both my current income and the freelance income are above the threshold of private insurance, but public health is better for me.

 

No, you will still pay the top contribution: https://www.tk.de/tk/versicherung-und-beitraege/beitragsrechner/selbststaendige/208528

You will have to tell your public health insurer that you will be freelancing, and send them your income tax returns every year as proof of your income (though in your case the point is moot since you already pay the most they could ever charge you).

 

Please also read: 

 

42 minutes ago, radual said:

will my wife & children still be covered by health insurance, if I continue to pay my contributions as Selbständig?

 

Yes, nothing changes.

 

42 minutes ago, radual said:

my new income would be my current gross salary + Arbeitsgeberanteil (whatever the employers pay for me according to http://www.brutto-netto-rechner.info/gehalt/gehaltsrechner-arbeitgeber.php + a few thousand euros more). So this means I could cover all taxes: the ones I owe as an employee and the ones that an employer would owe for me if I'd be employed. Is there anything else that I should consider? For orientation, how much money should I count for a Steuerberater, to be all safe & sound?

 

The Arbeitgeberanteil is for social security.

Self-employed don't have to pay any social security contributions (except health&nursing insurance), but you would be an "arbeitnehmerähnlicher Selbständiger" so stick 20% of your profit into a savings account and don't touch it should Deutsche Rentenversicherung (DRV) ever find you (highly unlikely, since they only identify likely targets in their biannual audits of German companies, and your client being a non-German company, they would never be audited by DRV) and force you to pay this ca. 20% public pension contribution.

Under no circumstance contact them yourself and pay voluntarily, that would be money down the drain, details in here:

Budget about 2,500€ for the Steuerberater. The law obliges them to charge by the client's profit, and yours will be fairly high.

 

You might also profit from reading this:

 

42 minutes ago, radual said:

I won't be allowed to have other employers or contract partners due to the COI policy. This means, that, in the eye of the German system, I'll be having income from one single source, therefore I'd be either "Scheinselbständigkeit" or "Arbeitnehmerähnlich selbstständig". I don't really understand the difference between them, but I'm still studying. Any summary is very appreciated :). Now the question is: how can I be affected, can I be accused of anything due to some mistake in the process? Is it only something about taxation, can I avoid problems if I decide to pay absolutely all taxes or contributions that an employee and his company would pay? Is it only a taxation mistake that I could make, or can it have legal implications?

 

See above, and also read this for the "summary" you want:

Being an "arbeitnehmerähnlicher Selbständiger" is about the public pension contribution, not about taxes.

The Finanzamt couldn't care less whether you have one client or many clients, they only care that you tax your profit.

 

42 minutes ago, radual said:

My research shows that I can be a Freiberufler, which makes accounting simple, but am I missing something? Should I be a Gewerbetreibender?

 

You are a Freiberufler because you have a university degree in IT and are working in the same field that your university degree is in.

 

42 minutes ago, radual said:

Any chance that I'll be forced to pay VAT or anything that I don't expect to pay, which would in the end bring my new income to a lower level than the salary income?

 

If you provide services to a US company, these services are exempted from VAT (= nicht umsatzsteuerbar):

In fact, you will have the best of both worlds, since you won't be paying German VAT but still get back the German VAT contained in stuff/services that you buy, e.g. when you buy a laptop, or pay your monthly internet bill.

 

42 minutes ago, radual said:

Any tips on how to optimize and make most of a probable Selbständig adventure? Or the best is not to optimize anything and just pay 100% of what an employee would pay?

 

Try to save as much as possible for a rainy day, and don't touch that money.

I have seen many former employees who changed to freelancing fail because they didn't understand that not all the money coming in was "theirs", i.e. they started spending all that money and then when the income tax had to be paid, there wasn't enough left. 

 

Your spending pattern has to change (ask yourself whenever you feel the need to splurge for a new car/iPhone/laptop: do I really need it, or is it just a "I want it"?).

As an employee you could be certain to have your income come in every month, as a freelancer, you are at the mercy of your client: they may not pay in time, and at the same time your fixed costs like rent, food, health insurance still have to be met.

Being self-employed also means that you can lose a contract from one day to the next (and your constellation, with just one client is very risky that way), and you will need those savings to tide you over until you find another contract.

 

Ideally, this buffer in savings should amount at least to one year of your previous net income.

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A couple of additional ideas:

 

1.   Find a good Steuerberater.   Ask people on this board who are in IT and located in Munich for recommendations.     Make an appointment with that person before you make a decision.   

 

2.   Work with the Steuerberater to use the correct language to avoid Gewerbesteuer.    If you are not selling software, you should be exempt, but using the correct terms will help you avoid doubts (and the costs of clearing those doubts).    Ask the Steuerberater about ways to maximize your writeoffs, e.g. home office, car, transit pass, internet connection, BahnCard, i.e. whatever is applicable. 

 

3.   Budget in the time and effort you will need to expend to deal with taxes and administrativia.   As a fixed employee, your company probably takes care of some things which will require your time and attention as a freelancer.   

 

4.   If you are paid hourly or by the workday, budget in sick time, and training / seminar / conference time.    Build in the cost of your office Christmas party and free coffee or snacks.   Allocate money for training as well where applicable.  Any books, professional memberships, free holiday meals, work telephone, etc which you will pay yourself, needs to go into your rate calculation.

 

5.   Arbeitslosgeld costs + risks of contract termination need to be factored into your rate.    Don't make the cost of zero too cheap.   If there is the possibility of a termination with thirty days notice versus 90 days, versus 7 days, go through the scenarios and how they might impact you and your family in comparison to being a fixed.  

 

6.   If you need to buy Microsoft Office, software development tools, USB sticks, pens, pencils, paper, envelopes, and a backup PC or notebook, factor it into your rate.     If you need a better chair, a bigger desk, a new desklamp, anything at all which is currently covered by your employer, build it into your rate.   

 

7.   I have been told by a "Rentenberater" that it is possible to hire someone, e.g. your spouse, to do your record keeping, (or in my case monthly VAT preparation) and pay 400 per month to avoid or reduce contributions to Rentenversicherung.   I have not done this, but it might be something a professional can explain to you if it is interesting.

 

8.   You might need some sort of professional liability insurance.   Build the cost into your rate.  

 

Hope some of those are relevant and helpful. 

 

Good luck. 

 

 

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Top post, SA...and a caveat for radual re  your point 8: it will/would be nigh impossible to get professional liability insurance in Germany if the client/s/contract offerer /are not in Germany.

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You (or your Steuerberater) will however still have to submit monthly VAT announcements, even though you're not charging your US business client any VAT, for details please read:

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Thank you for all the help! Exceptional and very helpful information. I'm kind of speechless about what kind of good words I could give back and I won't name the 3 of you individually - but I'm amazed.

Seems during the past few hours I learned more about what kind of things I pay in Germany than in the past few years :). I also did some trial & error calculations by looking at my current pay slip and **I think** I understood every number over there (you will see some numbers below).

While still trying to understand if this change will get me into a worse state, a few more questions popped up and I don't know if they should be on the same topic, or in one which is more about "arbeitnehmerähnlicher Selbständiger" or "working from home for a non-German company". My probable company is kind of "not really freelancing me", in the idea that they take care of hardware & software acquisitions, they have a "buy a home office" allowance when you join, they do pay trainings and conferences, they do pay a monthly co-working allowance that you can also use in coffee shops, they pay holidays, they pay a life insurance and they even pay in full the paternal leave (looks like heaven, I know, but I'll confirm it only later). In theory, it's "kind of" being employed by a company, but not really. It is easier to be fired than in a regular German environment, with a two weeks notice that grows with years that you spend with them. In any case, if firing would happen, they would take me into a "freelance ready" mode for which I'd need to prepare.

One personal reason for me to join them would be the commuting time - so that would count a lot in my decision. Less commuting time means more time for family, (maybe) for sports or for joining some Deutsche Verein (that becomes a social requirement if you work from home :P). Of course, I'd love if all these would take place without losing money or even by making more money than now.

 

21 hours ago, PandaMunich said:

so stick 20% of your profit into a savings account and don't touch it should Deutsche Rentenversicherung (DRV) ever find you


1) Does this thing that I've just learned about, the Beitragsmessungsgrenze SV (6350 euro/month) and Beitragsmessungsgrenze KV (4350 euro/month) apply for freelancers, or 20% truly means 20% with no grenze? Is 20% an approximation? Will it be 21.7% (=18.7% + 3.0%) including the AV?

 

2) Also, can it be that someone who doesn't pay into DRV and is later found as "arbeitnehmerähnlicher Selbständiger" will end up with something that we in IT call a "race condition" / "invalid order of events"? Explaining now: since the contribution to DRV was not made, then the "Zu versteuerndes Einkommen" (see, I'm learning) will be higher and therefore the freelancer will pay a higher value during that year. Then, when he pays back to DRV years later, he will not correct his tax in the previous years, so the difference will be gone. Some kind of gambling risk: if you don't pay DRV, you may pay a little bit more due to taxation differences... or you just win everything!

 

21 hours ago, PandaMunich said:

If you provide services to a US company, these services are exempted from VAT (= nicht umsatzsteuerbar):

 

 

3)  Is this rule valid for any non-German company or only for US? Asking because my probable employer has a few satellites across the world (including EU ones), but is headquartered in US. Practically, they could use any of them to deliver my money, and I don't know yet which one.

 

I *think* I clarified things regarding social security contributions, but I have no real clue on how taxation is calculated and how the Einkommensteuer is different than Lohnsteuer. Also, seems I have no good idea on how to have a valid "Zu versteuerndes Einkommen" if I'd be a freelancer. I used this one http://www.n-heydorn.de/steuer.html and played with the numbers until I managed to get "almost correct" values for my current salary. More exactly, I put everything as 0 in Einbehaltene* fields (as I wouldn't have paid any of them), I put the Arbeitnehmersanteil in the KV, PV, RV fields, I left 1000 for Werbung and I ended up on the right with a number that kind of makes sense for my salary slips (still couldn't make it perfect - exactly 300 euros yearly missing).

 

4) Now my question: what are Eigenbeitrag KV,  Eigenbeitrag PV and Eigenbeitrag RV for freelancers? Do they represent the sum between AN and AG in my table below (meaning anything that a company and an employee would pay for those?). Or only what the employee pays? Or a totally different sum, but "kind of" the sum of AN + AG?

 

My purpose: I want to calculate the worst case scenario, in which I would pay
1) Krankenversicherung + Pflegeversicherung +
2) Rentenversicherung + Arbeitlosversicherung, in case of arbeitnehmerähnlicher Selbständiger +
3) Taxation like an employee who wouldn't deduct any costs +
4) The Steuerberater ~2500

... and see if I end up with less money than what I have currently. I do understand that I could deduct some things and that would help, but... calculating the risk.

 

I only have a few thousand *yearly* on top of my gross salary + Arbeitnehmersanteil, so in case I would pay everything as an employee, I would remain only with the 'soft benefits' of this future job: no commuting time, more time for other things, but facing a greater risk.


Thank you, once again, for all this information! I wanted to quote and say "great idea" for some of the text, but it would make this message even longer. Maybe I'll do that in another post.


Below some calculations I made with the maximum values for SV and KV, maybe they help someone other people reading this post.

SOZIALVERSICHERUNGEN, RentenVersicherung & ArbeitlosVersicherung
=================================================================
*** Calculations out of 6350 EUR (known as Beitragsmessungsgrenze SV) / 76.200 per year, which is applied to anything larger.

: RV (18.7% = 9.35% AN + 9.35% AG; x 6350 EUR)
	50% AN: monthly: 593.73		yearly: 7124.76 + (a.k.a. Eigenbeitrag RV)
	50% AG: monthly: 593.73		yearly: 7124.76
	-------------------------------------------
				1187.46	 		      = ~14250

: AV (3.0% = 1.5% AG +  1.5% AN; x 6350 EUR)
	50% AN: monthly: 95.25		yearly: 1143 +
	50% AG: monthly: 95.25 		yearly: 1143
	----------------------------------------
				 	190.5  			  = 2286

: TOTAL RV + AV (18.7% + 3.0% = 21.7%)
    50% AN: monthly:  688.98	yearly: 8267.76
    50% AG: monthly:  688.98	yearly: 8267.76
    -------------------------------------------
      				 1377.96 	yearly: ~16535


KRANKEN & PFLEGEVERSICHERUNG
=================================================================
**** calculations out of 4350 (Beitragsbemessungsgrenze KV) / 52.200 per year, which is applied to anything larger.

: KV (16.3% = 14.6% + 1.7% zusatzbeitrag = 7.3 AG% + 7.3% AN + 1.7% AN; x 4350 EUR):
 	AN base  : monthly:  317.55	yearly: 3810.6
 	AN zusatz: monthly:   73.95 yearly:  887.4 (Eigenbeitrag KV: 391.5, 4698 yearly) 
	AG 		   monthly:  317.55	yearly: 3810.6
	------------------------------------------
			   monthly:  709.05 yearly: 8508.6	

	* Note: watch out for that 1.7%, could be lower.

: PV (2.55% = 1.275% AN + 1.275% AG; x 4350 eur)
	50% AN: monthly:  55.47	yearly: 665.64
    50% AG: monthly:  55.47	yearly: 665.64
    --------------------------------------
    		monthly: 110.94 yearly: 1331.28

	* Note: seems that 2.55 is 2.80 if you don't have children

: TOTAL KV + PV (18.85% = 14.6% + 1.7% + 2.55%; x 4350 EUR)
	AN: monthly: 446.97 	yearly: 5363.64
	AG: monthly: 373.02		yearly: 4476.24
	----------------------------------------
		monthly: 819.99		yearly: 9839.88



 

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3 hours ago, radual said:

1) Does this thing that I've just learned about, the Beitragsmessungsgrenze SV (6350 euro/month) and Beitragsmessungsgrenze KV (4350 euro/month) apply for freelancers, or 20% truly means 20% with no grenze? Is 20% an approximation? Will it be 21.7% (=18.7% + 3.0%) including the AV?

 

Those Beitragbemessungsrenzen apply to everybody, so your contributions are capped both for public pension and public health&nursing insurance:

I put in 20% because:

  1. the contribution rate will rise for sure from the present 18.7%
  2. you need a bit of buffer for the late interest that you will be charged.

AV is Arbeitslosenversicherung (= unemployment insurance), which you would only pay if you chose to stay on in it (you would have to decide to stay on within 3 months after stopping being an employee, the default for self-employed is not being in it): 

and: https://www.impulse.de/finanzen-vorsorge/arbeitslosenversicherung-was-selbststaendige-wissen-sollten/2072952.html

 

3 hours ago, radual said:

2) Also, can it be that someone who doesn't pay into DRV and is later found as "arbeitnehmerähnlicher Selbständiger" will end up with something that we in IT call a "race condition" / "invalid order of events"? Explaining now: since the contribution to DRV was not made, then the "Zu versteuerndes Einkommen" (see, I'm learning) will be higher and therefore the freelancer will pay a higher value during that year. Then, when he pays back to DRV years later, he will not correct his tax in the previous years, so the difference will be gone. Some kind of gambling risk: if you don't pay DRV, you may pay a little bit more due to taxation differences... or you just win everything!

 

Yes, that's the risk.

But your taxable income in the year you do have to pay it would be pretty low ;)

 

If you don't want to run the risk:

As was mentioned further up, one way to get around this duty to pay into DRV is to have an employee of your own for whom you pay social security deductions, since §2 Nr. 9 SGB VI defines "arbeitnehmerähnliche Selbständige" as people who live mainly off one client (= earn more than 5/6 of their turnover from that client) and who do not have an employee of their own for whom they pay social security deductions.

 

So you could employ your wife as a bookkeeper/secretary and pay her 451€ gross a month, this would cost you 543.04€ (= Personalaufwand) and would mean that she would get paid out around 400€ net. Just enter 451 into the Biallo calculator (put her in tax class III since that's the tax class §38 (1) Nr. 3 a) aa) EStG lays down for her see also here, and 0.5 children): https://www.biallo.de/vergleiche/recht-steuern/minijob/nc/

Those 543.04€ would be business expense for you, i.e. they lower your profit.

 

That way you still throw money down the drain, around 65€ (employee's + employer's contribution) for the public pension contribution, plus you lose a bit of money on unnecessary public health&nursing and unemployment insurance, in total around 142€ (= 543.04€ - 401.39€):

 

Detailrechnung Arbeitnehmer:
 
Bruttolohn:
451,00 €
Krankenversicherung:
21,00 €
Pflegeversicherung:
3,01 €
Rentenversicherung:
22,07 €
Arbeitslosenversicherung:
3,53 €
Nettolohn:
401,39 €

Detailrechnung Arbeitgeber:
 
Bruttolohn:
451,00 €
Krankenversicherung:
32,92 €
Pflegeversicherung:
5,75 €
Rentenversicherung:
42,17 €
Arbeitslosenversicherung:
6,77 €
Umlagen:
4,43 €
Personalaufwand :
543,04 €

 

3 hours ago, radual said:

3)  Is this rule valid for any non-German company or only for US? Asking because my probable employer has a few satellites across the world (including EU ones), but is headquartered in US. Practically, they could use any of them to deliver my money, and I don't know yet which one.

 

For other non-EU country companies, it stays the same.

 

For invoices you issue to EU companies for services, you have to write a "Reverse Charge" invoice, in which you have to mention both your and your client's VAT-ID (so in this case you also have to apply for one, it's free, just an extra box to mark in line 153 your Fragebogen zur steuerlichen Erfassung), which still means that you issue an invoice without German VAT, but the recipient company has to pay their local VAT on it in their country (but like all business expenses, they at the same time get to deduct that VAT in their VAT announcement, so it doesn't end up costing them anything).

This also means that additionally to the monthly VAT announcements, you will have to do quarterly Zusammenfassende Meldungen" (which is a snitching mechanism in which the German tax department contacts the tax department of the country your client is in to make sure your client mentions your invoices in their VAT announcements).

 

This reverse charge case was also explained in here:

and:

 

3 hours ago, radual said:

I *think* I clarified things regarding social security contributions, but I have no real clue on how taxation is calculated and how the Einkommensteuer is different than Lohnsteuer. Also, seems I have no good idea on how to have a valid "Zu versteuerndes Einkommen" if I'd be a freelancer. I used this one http://www.n-heydorn.de/steuer.html and played with the numbers until I managed to get "almost correct" values for my current salary. More exactly, I put everything as 0 in Einbehaltene* fields (as I wouldn't have paid any of them), I put the Arbeitnehmersanteil in the KV, PV, RV fields, I left 1000 for Werbung and I ended up on the right with a number that kind of makes sense for my salary slips (still couldn't make it perfect - exactly 300 euros yearly missing).

 

Lohnsteuer is just another word for Einkommensteuer, they are exactly the same, only Lohnsteuer is used for employees.

 

Your taxable income (= zu versteuerndes Einkommen) is basically:

business profit 

- public health&nursing insurance

- 86% (in 2018, rises by 2% each year) * your_public_pension_contribution <-- again, this is only if you choose not to employ your wife

 

You will also profit a bit from the fact that you're high-income, and the child tax deduction (= Kinderfreibetrag) will end up saving you more tax than the Kindergeld:

Use the Parmentier income tax calculator to enter your "zu versteuerndes Einkommen" (= taxable income): http://www.parmentier.de/steuer/index.php?site=tax-income

 

By the way, they also have a niftly wage tax calculator: http://www.parmentier.de/steuer/index.php?site=tax-wage

 

3 hours ago, radual said:

4) Now my question: what are Eigenbeitrag KV,  Eigenbeitrag PV and Eigenbeitrag RV for freelancers? Do they represent the sum between AN and AG in my table below (meaning anything that a company and an employee would pay for those?). Or only what the employee pays? Or a totally different sum, but "kind of" the sum of AN + AG?

 

My purpose: I want to calculate the worst case scenario, in which I would pay
1) Krankenversicherung + Pflegeversicherung +
2) Rentenversicherung + Arbeitlosversicherung, in case of arbeitnehmerähnlicher Selbständiger +
3) Taxation like an employee who wouldn't deduct any costs +
4) The Steuerberater ~2500

... and see if I end up with less money than what I have currently. I do understand that I could deduct some things and that would help, but... calculating the risk.

 

Being an "arbeitnehmerähnlicher Selbständiger" only means paying public pension contributions on your profit (= turnover - business_expenses), no other social security deductions.

You want to stay in public health insurance (this also makes sense financially), but you can forget about Arbeitslosenversicherung (you would only pay it of you really wanted to, and I don't see the sense in it since you seem employable enough).

 

The Steuerberater is a business expense, i.e. those 2,500€ lower your profit.

7

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