side job
May 17, 2011 | 30,00 EUR | answered by StB Manuela Ponikwar
I am an early retiree and intend to work for a trading company within a time frame of 2-3 days per week. The planned scope of activities includes consultation, building and maintaining new business relationships, and potentially conducting business on behalf of the company. I am socially insured and therefore only partially interested in a regular employment relationship, but I definitely do not want a solution that conflicts with the issue of "false self-employment". What form of cooperation (e.g. freelance work, etc.) would be recommended within the mentioned framework?
Dear client,
thank you for your inquiry, which I would like to answer as part of an initial consultation, taking into consideration your offered fee as follows:
To perform activities for someone else, there are two options: 1) to do so independently or 2) as an employee.
Regarding 1)
If you work independently, but are bound to only one client as a freelancer without any other employees, and you make more than 5/6 of your revenue with this client, your activity is generally considered to be "fictitious self-employment" if you are closely integrated into the company and your activities, location, and time are determined by the client.
However, this does not apply if you are acting as a "commercial agent." This is defined in §84 of the Commercial Code. Based on how you describe your activities, you would fit the definition as a "self-employed trader entrusted with brokering deals for your client (brokerage agent) or concluding deals in their name (concluding agent)." If you are able to freely determine and manage your activities and working hours, you are considered a merchant within the meaning of the Commercial Code and not fictitiously self-employed.
The assessment of these criteria must be made on a case-by-case basis based on the actual nature of the relationship. When it comes to the freedoms regarding the design of activities and time, it is important that there is no minimum working hours requirement, no obligation to work through address lists provided by the company, or visit customers who have requested an appointment. There should also be no restrictions on taking vacation.
However, be careful! If you are self-employed with only one client and do not employ any workers (earning over 400 EUR per month in total), you are obligated to pay statutory pension insurance if your own profit regularly exceeds 400 EUR per month.
If you become subject to mandatory insurance for the first time as a self-employed individual with one client, you can be exempted for a maximum of three years after starting your self-employment during the start-up phase. You must submit the application within 3 months of starting your business.
Regarding 2)
An alternative (aside from a regular employment relationship) is a social security-free mini-job (400 EUR), although this is likely not financially relevant to you given your working time of 2-3 days per week and the nature of the activities.
The wages from a mini-job, i.e., a marginal employment relationship, have been subject to income tax since April 1, 2003. Therefore, the employer must generally deduct income tax based on the details of the presented income tax card. Alternatively, they can forego the submission of an income tax card and collect income tax, including solidarity surcharge and church tax, at a uniform flat rate of 2%.
For this to apply, the regular remuneration in terms of social security must not exceed 400 EUR per month, and the employer must pay lump-sum contributions to the pension insurance in each pay period. The basis for the lump-sum taxation of income tax is the remuneration. The lump-sum pension insurance contributions amount to 15%.
If the employer does not have to pay lump-sum pension insurance contributions for a marginal employment relationship, they can collect income tax at a flat rate of 20% of the remuneration without requiring the submission of an income tax card. The requirement is also that the regular remuneration does not exceed 400 EUR per month; the hourly wage limit of 12 EUR does not apply.
The solidarity surcharge and church tax, if applicable, are collected in addition to income tax; the basis for this is the lump-sum income tax.
I hope this information helps you.
Kind regards,
Manuela Ponikwar
Tax consultant
www.ponikwar.de
