Contracting in Germany

**BlasterBates** · 7 July 2005, 07:42

If your there for just six months then you can tax yourself in the UK, if longer then you need to act a freelancer, the most tax efficient way in Germany. Basically sort this out with a German accountant, who'll sort it out for you. Due to high social insurance being "employed" in Germany is a real no no.

**BlasterBates** · 7 July 2005, 07:45

huh ?

Where's my picture

**JohnOGroats** · 7 July 2005, 18:32

Thanks for your quick reply.

I may have the opportunity to stay on a further 6 months. Would it be better to be freelance from the start in case I do get a second contract or because of the tax & social security it would be best to put off going freelance as long as possible?

Thanks again,

J

**BlasterBates** · 8 July 2005, 08:16

If you're planning to stay longer than 6 months I would tend to set up as a freelancer from the start. Just makes things less complicated, otherwise you're fighting two tax authorities in one year, and also six months down the line you've got to go through further admin hassle.

You don't pay social insurance in Germany as a freelancer, and there is an IR35 style law, but is not applied by the tax authorities, the social insurance and whether you're liable to pay is dealt with by the social insurance office, and since you never paid in, in the first place, you're off the radar screen, plus the criteria for being self-employed are easier to satisfy than for IR35.

Tax is comparable with the UK, rising to 40% top-wack, no divies or the like you'll pay straight income tax.

On average I would estimate you'd be paying around 30%, maybe less as tax rates have come down since last year but you would need to calculate that.

**WageSlave** · 8 July 2005, 09:01

Hi BlasterBates,

How would you say the quality of life in Germany and Switzerland coupled with the ease/number of contract opportunities compares to the UK?

My experience of Germany and Switzerland is zero, but Mrs Wage (who has worked in Switzerland) is keen on the move.

Thanks.

**darmstadt** · 8 July 2005, 13:33

Well I've been here 16 years now and I still find the quality of life pretty darn good. I will admit the fact that I pretty much integrated into the German society straightaway helped rather than going down the local Paddy pub with all the other Brits. As for contracts, well I look at the German job websites and they're pretty good. For example this week I have 2 phone calls from a company that I consult to about 2 projects and 3 contract offers have come in my mail while I was shopping in Heidelberg this morning.

One of the reasons that a log of German contracts are in 6 month stints is because once you've worked at a company for more than 6 months you can, theoretically, call that company your employer. This can help if they decide to terminate your contract immediately (and you have Rechtsschutz to help pay the legal bills) and you want compensation. I have had to, on a number of times, sign an extra waiver to say that I would not do this.

Once you pay into the social system here you can opt out. I pay no social insurance, heatlh insurance or umemployment insurance as I do them all privately. For Brits coming here you can get something (form Enn) which covers your medical costs for up to 2 years and you pay in Blighty. What you do have to watch out for is tax returns. Pay your tax however you like, preferably PAYE, but once you go to an accountant and start putting in things like expenses, etc. There is no going back. You have to do it every year.

**JohnOGroats** · 8 July 2005, 15:36

Originally posted by BlasterBates

On average I would estimate you'd be paying around 30%, maybe less as tax rates have come down since last year but you would need to calculate that.

Thanks to BlasterBates and darmstadt for their advice and experiance.

Does anyone know of an online calculator to calculate German tax and the like?

Cheers
J

**BlasterBates** · 8 July 2005, 19:33

Originally posted by WageSlave

Hi BlasterBates,

How would you say the quality of life in Germany and Switzerland coupled with the ease/number of contract opportunities compares to the UK?

My experience of Germany and Switzerland is zero, but Mrs Wage (who has worked in Switzerland) is keen on the move.

Thanks.

For the outdoors you can´t beat it really, Southern Germany and Switzerland have fantastic countryside, warm summers, cold snowy winters, with outdoor swimming pools, alpine lakes in Switzerland, mountains, ski-iing, wine growing areas, picturesque villages, fabulous wine festivals. I think compared to any town outside London you´re better off in Zürich or Frankfurt, they have more opportunities than most places. However London is in a league of its own, you won´t find the opportunities of the City of London anywhere here. If you´re hooked on London I would stay there. If you have an ordinary existence in Nottingham or Leicester, then, get your ass off to Germany or Switzerland. I was in Sheffield and moved to Koblenz and although it is a small place I led a much better life in Koblenz than I ever had in Sheffield, I could have never move back there or somewhere like it. London, that´s different. I´ve never lived there, but I would consider it.

I couldn´t imagine living in the North of Germany, too cold for my liking, but some people swear by Hamburg. Personally wouldn´t consider anywhere North of Bonn, the cut-off for Southern Germany.

Contracting in Germany