Tips for part-time work and self-employment - information for students

Part-time job or self-employment – how do I finance my studies??

Studying at a state or private university or college is often not affordable for students unless they have good financial resources. There is the possibility to use the so-called student loan if there is either no or only a minor claim to BAföG – but this also means having a bank as a creditor, even if supposedly good conditions are offered for students. Because many students avoid this >

Students in the sense of the law

Students are primarily enrolled visitors from universities and technical colleges. According to the prevailing labor law, vocational students also enjoy student status.

working hours

Students have certain limits on the amount of time they can effectively work while studying. These can be divided as follows:

1.) General limitation of working hours for students

If a job is to be considered a part-time job for students, i.e. it is carried out in parallel to the course, it must not exceed 19 hours per week. Otherwise, the "student" status at the employer expires, which also means the loss of associated tax benefits.

2.) Short-term full-time employment for students

Instead of a regular part-time job, students have the option of limited full-time employment. The following applies: The activity must be subject to a time limit and must not exceed 50 working days or two months (with five working days a week). In this case, the employer does not have to pay social security contributions for the employee. In this case, students are still subject to full income tax as employees.

income

Certain student income limits apply depending on the type of activity. Workers with limited working hours may also only have a certain income, provided that the payment of income tax or other taxes is to be avoided. The individual regulations are broken down in more detail below.

450 euro jobs for students

Since January 1st, 2013 the following applies: The earnings limit for part-time jobs increases to € 450. Anyone who earns more than € 400 and less than € 450 from this point on must make a contribution to the pension insurance.

Since January 2013, students have been able to earn € 450 a month from part-time jobs

One-off payments (Christmas bonus, vacation bonus and so on) must be offset monthly. In addition, the employee remains exempt from health insurance, unemployment insurance and long-term care insurance. The amounts for the pension insurance are as follows: While the employer has to pay a flat rate of 15 percent, students pay 3.9 percent of the € 450 earned into the pension insurance. An exemption from this payment is possible through a written application that must be submitted to the employer. It is important to note that the exemption then applies for the entire duration of the employment as well as for all other part-time jobs that the student may otherwise be doing. That’s why everyone Employers are informed about the exemption.

From 01/01/2015: What can change with the minimum wage

The introduction of the minimum wage, ie the implementation of the Minimum Wage Act (MiLoG) in Germany, has been in effect since January 1, 2015. It writes a nationwide minimum wage of € 8.50 gross per hour for workers and almost all types of interns. This regulation also applies to secondary activities that are carried out by students, for example. Since the tax-free earnings limits, which are described here in the article, are still valid, the following scenarios are conceivable for part-time jobs.

1.) Shortening the number of hours

In order not to endanger the 450 euro mini job in its existing form is one Reduction in the number of hours possible.

2.) Conversion into a midi job

However, a reduction in working hours is often not expedient for the employer either. It is therefore possible to convert the mini job into a midi job.
The so-called midi job starts at a earnings limit of 451 euros and ends at 850 euros. For employers, social security contributions are around 20% (compared to 30% for mini-jobs). The reduction of social security contributions was a stated goal when introducing the midi job, as it was intended to make jobs with a slightly higher income more attractive.
As a student who does the midi job, the statutory contributions to the pension insurance and, if applicable, income tax must be paid (depending on the annual total earnings). It is no problem to have a mini job in addition to the midi job. Midijob employees have health, pension and unemployment insurance. This means that in the event of a long illness, you are also entitled to sick pay.

Wikipedia provides employers with detailed explanations and examples of how social security contributions are calculated for midi jobs

Limit of earnings for multiple jobs

Students are also allowed to work several part-time jobs in parallel. It should be noted that the total earnings limit of 450 euros will not be exceeded if the payment of wage tax is to be avoided.

Multiple jobs at the same employer

Employees, regardless of whether they are students or not, are generally not allowed to work for more than one regular job and a so-called mini job. For students, however, this “double employment relationship” would already lead to the loss of student status. It is therefore advisable to take a student job with one employer and an additional mini-job with another employer if in doubt. In such an employment relationship, there is no compulsory pension insurance for the student job.

Tax-free earnings per year

For students and non-students alike: Income up to € 8472 a year (since January 2015) are tax free. This limit applies to single people. Married people can earn 16,944 euros tax-free annually. These amounts will increase again in 2016: single persons can then earn 8,652 euros and married people in Germany 17,124 euros tax-free per year. If this amount is not exceeded within a year, students will get back any wage tax payments they have listed with their income tax return. A current salary calculator can be used to calculate the annual income.

A wage tax card is generally required to carry out a non-self-employed activity. If it is a self-employed activity, the student also needs a business license. A second part-time job for students also requires a second income tax card. A distinction is usually made between tax class I (first income tax card) and tax class IV (second income tax card). Since January 1, 2013, the income tax card has not existed in its previous form; rather it was through electronicLohnStyourAbzugsMfeatures (ELStAM) replaced. This means information that was previously noted on the front of the income tax card and, for example, provided information about the tax class, allowance and child allowances. Further information on ElStAM can be found here.

Self-employed activity / trade license

Business licenses can be applied for quickly and easily. When students have these business licenses, they make it easier for both themselves and their contractors to process their employment in many ways. Work done can be easily invoiced. Employment contracts, the associated notice periods and other regulations are largely eliminated.

Students with registered business do not expect any changes in their studies and social security. If certain income limits are exceeded, however, state benefits also cease; instead, there are new taxes on commercial students.

This applies from a certain annual income generated by the registered trade. This amount of this income is regulated by § 11 Trade Tax Act (GwStg) and is included 24,500 euros.

If sales plus taxes in current calendar year has exceeded the value of € 17,500 and will exceed € 50,000 in the following calendar year, students have to pay sales tax (§ 19 UStG: taxation of small businesses).

If married jobs exceed an annual earnings limit of € 8472 or € 16,944 for married people, wage tax must be paid as normal (see also tax-free earnings per year)

If a certain income is exceeded, wage tax must be paid.

If income is obtained from a registered trade, self-employed students must pay a membership fee to the Chamber of Commerce and Industry (IHK) after a certain earnings limit. Are free of charge Yields up to a total of 5200 euros. Since the contributions to be paid are not regulated uniformly, they should be requested from the relevant IHK.

Loss of family health insurance

Family health insurance expires (if it exists at all) if income from a trade exceeds a certain annual income.

Loss of child benefit

Up to and including 2011 was valid: From an annual income of € 8004, the right to child benefit also expires (see also Tax-free earnings per year and § 32 EStg). This legal regulation was overturned by the so-called Tax Simplification Act; since then the income test for children of legal age has ceased to exist. This means that even if the annual income exceeds € 8004, the right to child benefit is not affected. However, since then 01/01/2012, that entitlement to child benefit is only available after completing initial vocational training or a first degree if the child does not work afterwards. This does not include jobs with a weekly working time of no more than 20 hours, an apprenticeship or a marginal job (see above: 450 € jobs for students).

Loss of BAföG

The BAföG law stipulates that 255 euros from a student’s income are not counted (see §23 BAföG). From August 2016, the allowance will be € 290 per month. The complete provisions for the BAföG can be viewed here.

A false self-employment can exist under different conditions. The most common is probably the predominant activity for only one client. We recommend the following article on this topic: Bogus self-employment: consequences from an employment law perspective.

Deductible costs and tax relief

There is no special tax status for students. This is not necessarily a disadvantage, since it means that students have the same opportunities to deduct a certain amount of costs and expenses from tax as “regular” workers. What up to wherein The degree that can be deducted and claimed depends on the type of costs, purchases and expenses.

This can be especially helpful if the tax-free maximum amount for annual earnings has been exceeded. The costs of business are summarized under advertising costs, i.e. are directly related to the activity performed. That means, that these costs must serve to secure or maintain your studies and your job. Examples of advertising costs:

application costs
Training costs
ride costs
Cost of study and equipment
Acquisition costs for uniforms

Since 2011, a lump sum of € 1000 can be claimed as advertising costs.

The term "special expenses" summarizes expenses that can neither be tax deducted as operating expenses or advertising costs, but are nevertheless tax deductible due to special regulations (see: §§10 ff. Income tax law).

Special expenses for students

The distinction between advertising costs and special expenses is of the utmost importance for students. While the advertising costs are always directly related to the (part-time) professional activities, special expenses are defined differently:

Costs related to your studies:

textbooks
Semesterticket
copying costs
PC depreciation
software

Beyond that also count pension costs to the special editions. However, these can only be deducted up to the maximum amounts for special expenses. Pension expenses are

Health insurance
accident insurance
Bausparkasse posts
statutory social security contributions

The legal basis for pension expenses can be found in the Income Tax Act, Section 5, Paragraph 10 (Special Expenditures)). Special expenses can be claimed up to a total of € 6000 per calendar year.However, this only applies to initial studies or initial vocational training.

Students who are still looking for a part-time job can get useful tips for creating their application here.

Note: This article does not constitute binding legal advice. Errors and changes to laws, allowances and other provisions of third parties are reserved.