A guide on how to become a freelancer in Germany

As a freelancer in Germany, you have the choice of how you want to carry out your daily work. Here’s how you work as a freelancer in Germany!

Marle

6 minute read

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Updated on 5 Aug 2024

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Working

As a freelancer in Germany, each day you have the choice of how you want to carry out your work routine. Hop into the hip Café Daluma in Berlin for breakfast and spend your working day from there? While it might sound like a dream, it's a reality for freelancers in Germany.

It's up to you to decide when, where and how you want to go about your daily work – as long as you meet the demands of your client. What's best of all: It's in fact much easier to work as a freelancer in Germany than you might expect.

Let us help you start your freelancer career in Germany! We'll show you how to register as a freelancer in Germany, how to land your first freelance job and how to set your worth. Finally, we'll discuss key aspects of health insurance and the tax system for freelancers.

Freelancers in Germany are independent professionals; in other words, you work independently on behalf of a company and with your unique qualifications you're often seen as an "expert".

The fact that there's a client, and no single employer, allows you the freedom to decide where and how you handle your project as long as you deliver quality results as promised. So it's entirely up to you whether you work comfortably in your home office or choose a co-working space.

Oh, excuse me, have I just heard something about personal independence? Yep, you're truly free as a bird. Instead of being bound to an employment contract, you’ll have a service/performance contract with a fixed term and be paid at an hourly rate, fee, or even flat rate.

Being a freelancer essentially means that you're an entire business in a single person. From accounting to customer acquisition and handling orders, everything falls under your responsibility.

This is how it works

1. Register with the trade or tax office

• Self-employed: Your first steps as a self-employed person will take you to the tax office in your area where you’ll have to fill out a questionnaire for tax registration.
• Trade/business: Anyone qualified as a tradesperson, that is working in Germany as a freelancer, must register with the tax office. On top of that, you need a trade license, which you can get at the trade office. Make sure you’ll bring the following documents:
  • Tax ID
  • Description of your freelance activity
  • Details of your German bank accounts
  • Estimated business revenue and expenses
  • Estimated profit
  • Upon registration as a freelancer in Germany at both offices, you'll receive your tax number; after that, you also need to register at the IHK.

2. Build savings for taxes Freelancers are asked to pay by both the trade office and the tax office. That's why you should build up savings every month to cover your taxes (trade tax, sales tax and income tax).

• Income tax: you have to pay income tax on your income that you make as a freelancer. There's a basic tax-exempt amount that changes each year (€10,908 in 2023). The income tax is between 14% and 42%.
• VAT: once you've earned more than €22,000 in the previous year and your turnover doesn't exceed €50,000, you are required to pay VAT of 19%. There's a reduced tax rate of 7% on certain goods and cervices.
• Trade tax: you have to pay trade tax if you earn more than €24.500 per year.

3. Manage your social security All citizens must have health insurance in Germany. Typically, half of the social contributions are paid by the employer and the other half by the employee. In your case, you are responsible to cover your social security contributions by yourself.

If you're an artist or publicist, then it's best to register with the Künstlersozialkasse (KSK). The KSK is the health insurance company where artists and publicists receive contributions from pension, health and nursing care insurance. On top, working as a freelancer in Germany you might want to check out occupational disability insurance (Berufsunfähigkeitsversicherung).

4. Don’t forget about emergency funds As a freelancer, you swap the security of being an employee, so you alone are responsible for ensuring that you're covered in case of an emergency. Try to put aside enough financial resources to last you for a few months at a stretch.

For international freelancers who want to start their career in Germany, it's essential to have a residence permit. Being an EU/EEA or Swiss citizen gives you distinct advantages in this area: you can jump right in working as a freelancer in Germany.

It's a different story for non-EU/EEA/Swiss citizens. First of all, you need a residence permit that allows you to be a freelancer. When applying for your visa and residence permit, you need to provide proof of a client base in Germany so that you can start off working as a freelancer in Germany.

To wrap up the month with a positive balance, your worth as a freelancer must be clearly stated. Usually, a freelancer in Germany acts as an expert in a certain area. Keep in mind though, that if you're just starting out as a web designer, you can't charge €3.000 for it.

So as a general rule: the more experienced you are, the more you can charge. In your first steps, it's essential to build up your business, acquire customers and collect references rather than making tons of money.

However, once you’ve gained experience and can support your client with your expertise, the following rule applies:

Take 1.5 times as much as the hourly wage of a comparable employee.

Keep in mind that as a freelancer in Germany it's up to you to cover your social security contributions, insurance and travel expenses. On top of that, you have to plan for your pension. With a bit of luck - at least 30% of your professional development can be subsidised, with the remainder being on your shoulders.

No idea how much employees might earn? Glassdoor shows an overview of the salaries and even LinkedIn and Xing publish regular reports about the salaries.

Tip: Make sure to calculate your rates, such as hourly, daily and weekly rates!

Although as a freelancer you float on cloud nine when it comes to your freedom, you also give up the comfortable advantages of an employment relationship: paid professional development, pension plans, and health insurance.

In Germany, everyone has to have health insurance. As an artist or publicist, you can become part of the artists' social security system (Künstersozialkasse)!

For many companies, outsourcing is a clear part of their strategy. After all, it gives the company clear advantages- not only is it more flexible, as they don't have to fill a full-time employee, nor set up a full-time contract or terminate a contract, but it also saves them a lot of money, as they have no obligations in terms of social security contributions. Ultimately, with a freelancer on board, they have a true expert on the hook!

Freelance work is particularly popular among journalists in Germany, but also notaries, doctors and lawyers often opt for this work environment. To give you a little food for thought on your freelancer career, this list shows you the most popular freelancer jobs in Germany:

• Marketing
  • Content marketing
  • Social media
  • SEO
  • Localisation
• UX Design
• Journalism
• Consultant
• Music/ Art
• Software Engineering
• IT

Don't be daunted by the list: Almost every area offers freelance opportunities if you search just a little bit. The above are merely the most popular freelance jobs in Germany.

Once you're a freelancer in Germany make sure you work for several clients. What may sound like a paradox at first, turns out to be true: only with more than one client will you actually achieve your freedom as a freelancer in Germany.

And what is even more important:

if you have several clients, you protect yourself from being labelled as a "pseudo freelancer"

and prevent clients from hiring you as an external person but registering you as any other employee, thereby significantly saving on social security contributions.

To find "pseudo freelancers", there are different authorities such as the Tax office, the German Pension Insurance Association, Social insurance companies or the Labour court that regularly audit freelancers. "Pseudo freelancers" usually work with only 1 company and have no employees. If you're found to be a "pseudo freelancer" you'll have to pay the arrears of social security contributions and will lose your freelancing license.

By diversifying your business, you won't only gain more freedom but also prove that you're truly a freelancer.

Here we go: You have to win your customers! When freelancing, proactivity is key. Be open to meet new people, don't be shy about expanding your network. Customer acquisition will probably become your daily routine.

Now how do you find your customers or your freelance job in Germany? If you're not invited to an event from your industry, there are many online solutions. Perfect for all those who don't feel comfortable with small talk. So feel free to use freelance platforms or social networks:

• Freelance.de
• Projektwerk
• Freelancer Map
• XING

And for international freelancers working mainly in English in Germany:

• oDesk
• LinkedIn
• Facebook
• Twitter

Want to know more about Moving to Germany? Download the free e-book by filling out the form below.