17. June 2016–
Freelancing is an exploding trend. For many, especially those who want to move around and set their own hours, freelancing is the ideal work solution. But for anyone who has freelanced in Berlin it’s no secret that it’s not a walk in the park. You are employing yourself, after all. Taxes, insurance, billing clients – it can all be overwhelming, but this key information will make cracking the freelancing scene a lot easier. Here's our guide to freelancing in Berlin.
Freelancing in Berlin: Getting started
We wrote about the Anmeldung or registration process here. If you’ve just arrived in Berlin, that’s step one. You can’t get your tax number until you do that. And you can’t write invoices until you have that number.
So, how to get the Steuernummer or tax number? Make a trip to the Finanzamt and fill out the form "Fragebogen zur steuerlichen Erfassung". It’s not available in English, so get the help of a German-speaker. It’s important that you indicate whether you are freelancing or doing a Gewerbe or a trade. Generally, if you’re practicing a “unique skill” or making a unique product, you’ll fall under freelance.
Try to estimate your income as closely as possible. If you over-estimate it, the Finanzamt might start sending you monthly or quarterly bills, which are far too high. But if you underestimate it too much, you might end up with a huge bill after filing taxes.
Taxes: No one likes them, everyone has to do them
Almost everyone will tell you to hire a Steurberater or tax accountant. Trying to do it yourself, especially if you don’t speak German, can be a nightmare. That said reasonably-priced tax accountants who speak English and actually want to take you on as a client seem to be few and far between.
Here’s the gist: Income tax depends on your salary but up to around €8,354 is tax free. There are of course many exceptions, loopholes and rules – and that’s where the tax advisor comes in. As far as VAT, unless you’re making over 17,500 Euro per year, you shouldn’t have to charge VAT. If you make over that, you should charge 19%.
Save your receipts! From restaurant bills, a new computer, phone or transportation, Germany is generous with freelancer deductibles.
What you need to know about insurance
That Germans love insurance is not an exaggeration. There’s health, renters, personal liability, legal, incapacity for work, pension insurance and more. The main one you’ll need to worry about is health insurance. As of 2009, it’s mandatory that all people living in Germany have insurance. You can either go with private or public health insurance and there are advantages and disadvantages to each. In any case, this is a major monthly expense to factor into your budget.
If you’re an “artist” (this is a broader category than you might think!) it’s worth trying to get into the KSK funding scheme. It’s set up to pay half of social contributions for artists. It’s not easy to get in but some insurance brokers will help you apply.
Now you’re ready to find clients! Not sure what to charge? Ask around for the going rates and be aware they probably won’t be the same as in other cities. You’ll also need a good invoice and there are many templates online. Always have a contract. Make sure you take advantage of networking opportunities and remember: you are your own brand.
Check out the HEUREKA job board for job listings, including freelance positions.