Germany


Introduction

Uniglo Financial can provide a comprehensive range of payroll services in Germany. The individual is treated as a freiberufler by Uniglo Financial and income is paid in the form of professional fees, allowances and expenses, the proportions depending on individual circumstances.

Immigration

Nationals of the EU/EEA Member States and Switzerland are able to work without restriction in Germany.

For citizens of the following ten new EU Member States – Czech Republic, Estonia, Hungary, Latvia, Lithuania, Poland, Slovakia and Slovenia (who joined on 1 May 2004) – and Bulgaria and Romania (who joined on 1 January 2007), transitional rules still apply and they may only take up employment if they have an EU work permit issued by the Federal Employment Agency (Bundesagentur für Arbeit) (BA).

Tax residency

  • if their home or principal abode is in Germany,
  • if their habitual abode is in Germany, i.e. if they stay for an uninterrupted period of 6 months, which may fall across two years.

Income Tax Bands

Income tax is imposed at progressive rates using complex tables. The lowest rate in 2012 is 14%. It goes up to 42% for income over EUR 52’882. Since 2007 a special rate for the “rich” (“Reichensteuer”) of 45% for income over EUR 250’730 for single persons (double for jointly assessed spouses) is applied.

Social Security

Unlike normal employees, freelancers are in general not liable to the German social security system.
Therefore, freelancers do not need to contribute to the governmental healthcare, unemployment and pension insurances. However, they should consider making their own arrangements. In particular, this includes for:

  1. Private health insurance
  2. Health insurance which also covers the risk of illness and the loss of income should you become sick
  3. Disability insurance to cover the risk of monetary loss if you are unable to continue working due to illness
  4. Life insurance is also an option to supplement the retirement income.

How much will I take home?

Please contact our German specialist who will discuss your personal circumstances with you and help you to minimise your tax and social security liabilities, within the bounds of German legislation.