Self-employment: criteria for self-employed

Self-employment: criteria for self-employed

bogus self-employment

Beware of self-employment

Since more and more young entrepreneurs push for the market, in Germany the problem of bogus self-employment has intensified. Pseudo-self-employed people face high back payments to the social security fund if they are employed on a dependent basis.

Initial information – Initial information for insurance brokers in accordance with § 11 VersVermV read and download.

The character of bogus self-employment

Entrepreneurship lures forever: New opportunities on the Internet and on a global level inspire many men and women to work independently. Entrepreneurs make their own decisions and of course enjoy other income opportunities than many employees and workers.

Last but not least, the outsourcing of many business processes has meant that the workspaces of companies today are often covered by independent entrepreneurs. A bogus self-employment occurs when the self-employed person acts as an entrepreneur, but actually has to be counted among the dependent employees of another company. If an independent activity as bogus self-employment The financial consequences for employers and employees are grave: statutory contributions to health, pension, long-term care and unemployment insurance must be paid up to 30 years retroactively repaid become. When companies provide orders to entrepreneurs other than bogus self-employed, they are mainly pressured by the high social security contributions that must be paid to each employee. The self-employed pay the costs of their health, pension, long-term care and possibly unemployment insurance completely independently.

Of course, notice periods are not valid for self-employed entrepreneurs. Anyone who would like to take the plunge into self-employment and is bound by a client should be given sufficient advice. Not in every case is there a bogus self-employment: the employee-like self-employed are often confused with pseudo-self-employed entrepreneurs. However, here is a deposit in the statutory pension fund requirement.

Bogus self-employment: the criteria

The criteria of the social code for the classification of pseudo-independent entrepreneurial activities are no longer valid today. With the § 7 paragraph 4 SGB IV clear guidelines for bogus self-employment were established. Thus, entrepreneurs were considered fictitious self-employed, if they provide 80 percent of their sales through a client.

Pseudo-self-employed persons also act as sole proprietors without employees subject to social insurance contributions. The bogus self-employment must fill a job subject to social insurance contributions in the company. According to the old SGB regulations, mainly self-employed persons were deemed to be illusory entrepreneurs, who worked in advance as employees of their client in a comparable position. Fictitious employees are also characterized by a non-entrepreneurial action by relying only on a client and do not seek new customers.

Today, the legal classification criteria for a possible bogus self-employment are no longer valid, which is particularly in the aspect of companies that as Self-employede have led to confusion. Employee-like self-employed are true entrepreneurs, but pay the full contribution to the statutory pension insurance. Essentially, self-employed persons without employees who are dependent on a client in the long run are included here. The employee-like independence is completely legal. However, in case of suspicion of an employee-like enterprise, an exact examination of the case should be carried out in order to avoid a high additional payment of the pension insurance contributions. With almost 20 percent of the pension, high back payments can be incurred.

Pseudo self-employment: threatening audits

If there is a suspicion of bogus self-employment, an annual audit may be carried out by the pension fund. In view of the increasing number of suspected bogus self-employment, pension insurance has intensified its involvement in recent years and deliberately conducts company tax audits to detect fictitious relationships. The risk of high back payments of social security contributions is mainly borne by the companies that have employed a fictitious self-employed person: Full contributions to health and long-term care insurance, pension insurance and unemployment insurance must be paid. The pseudo self-employed only contributes half of the social security contributions here in theory, since in most cases a demand is not successful. Since social spending is up to 40 percent of the labor income, entrepreneurs have to pay more than 1.5 times the actual annual salary to the health insurance.

Even though the issue of bogus self-employment has become more important in recent years, real entrepreneurs do not have to fear the consequences of a tax audit at the main client. Anyone who works for other companies at times, negotiates their fees freely and is not in principle bound to a client, does not pursue any self-employment. The entrepreneurial risk in this case is always borne by the self-employed. The entrepreneur is only active on behalf of others and receives no internal benefits.

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Christina Cherry
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