What do I need to do a freelance job

Working as a freelancer: this must be taken into account!

Freelancers are often greeted with envious looks by salaried employees. Greater freedom and no boss sitting behind you - especially when things are not always rosy in your own job, the work of a freelancer seems to be superior to your own. But who work freelance would like to, also has to consider a few things and is faced with problems that permanent employees do not come into contact with at all. In addition, freelancers and freelancers or freelancers are often lumped together, which further influences external perception. We explain what you do and don't have to do when working as a freelancer ...

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Working as a freelancer: what does that even mean?

First of all: Working as a freelancer does not mean receiving orders from companies as a freelancer and, for example, working together for the duration of a project. These are so-called freelancers who must not be equated or confused with freelancers.

Who really works as a freelancer is precisely regulated in the Income Tax Act - because here the so-called catalog professions are listed that freelancers do.

Section 18 of the Income Tax Act defines the income from freelance work and includes the following professions:

In this job you can work as a freelancer with a company. Here is the first important point to keep in mind: If you are a freelancer, you are not employed by the employer, but self-employed. You actually enjoy more freedom and work independently.

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What do you need to do to be a freelancer?

Before you can start working as a freelancer, you need to register your activity. In contrast to many other self-employed, freelancers do not contact the competent trade office. If you work as a freelancer, you apply - as a rule - not as a trader. For this reason, you are not subject to the trade regulations. This has the additional advantage for you that you do not have to pay any trade tax.

Instead, register with the tax office to register your freelance work. Although this is not completely unbureaucratic, it is still much less complicated than having to register your own business before you can start your activity. Often already submits informal letter to the responsible tax office. You will then receive a tax numberthat you can use to write your bills in the future.

With the status of the freelancer you get another advantage that makes your professional life easier. You are in your job not obliged to double-entry bookkeeping, it is sufficient if you submit a simple income-excess calculation. In order to be able to differentiate between the various cost items, it is advisable to have a separate account to regulate professional finances.

Lastly, you need to find out if you can Member of the relevant chamber Of your profession. This doesn't always apply if you are a freelancer, but some professions still require it. For example, lawyers have to be in the bar association.

Important insurance if you are a freelancer

Some insurance companies are employed in an employment relationship deducted directly from the salary and payed. This includes, for example, part of the health insurance and also the social insurance. In freelance work, this is a little different and you have to take care of important insurance yourself.

First and foremost here is the Health insurance, with which you have the choice between the statutory and private variant. Obtain offers accordingly and compare the various benefits in order to find the right coverage for you.

Freelancers and other self-employed are not required to be in the Pension insurance to deposit. Nevertheless, it can be worthwhile to make provisions for old age. If you belong to one of the chamber professions, i.e. the lawyers or doctors mentioned above, you usually pay contributions into the pension fund through the relevant pension fund. However, you can also apply for exemption from this.

To be even better protected when you work as a freelancer, you can also have a Professional Liability Insurance think.

Working as a freelancer: You have to pay these taxes

Unfortunately, the fact that you don't have to pay trade tax when you work as a freelancer doesn't mean that you don't have to worry about other taxes. As a freelancer, you are first of all obliged to both income tax and sales tax to pay.

There are some differences when calculating sales tax, depending on your activity. The general sales tax rate is currently 19 percent, but the reduced tax rate of seven percent can apply to writers or journalists, for example. Medical services such as those provided by doctors or alternative practitioners are also completely exempt from sales tax.

As is so often the case, there is no rule without exception: if it is not medical, but rather cosmetic interventions deals, such as cosmetic surgery, the full sales tax rate will be credited.

You can also get exempt from sales tax through the so-called small business regulation, if your Sales in the current year under 50,000 euros and you have turned over less than 17,500 euros in the last year.

Tips for freelance work

Finally we still have a few tips for freelance work put together so that you can get the most out of your role as a freelancer:

  • Take advantage of your options

    When you work as a freelancer, you have an independence that many employees can only dream of. Do not let this go to waste, but benefit from the opportunities that your professional position brings with it. This goes hand in hand with the organization of working hours and locations, but also the selection of customers and orders.

  • Think about later

    Since you do not necessarily automatically pay into the pension scheme, you should definitely think about the future. Do you have any other forms of reserve? Doesn't it make sense to pay for a pension? Can you invest the money elsewhere so that you can fall back on it in old age?

  • Call it a day

    Freelancers mostly organize themselves - this has many advantages, but also the disadvantage that it is all the more difficult to really switch off. The working days are getting longer, there are no breaks and there is no time for family and friends. Discipline is not only evident when you focus on your work, but also when you really leave work.

  • Spread the risk

    In a permanent employment contract, an employee cannot usually just be terminated. However, if you are a freelancer, the risk is significantly greater. Therefore, try not to be dependent on just one job or company. If there are problems then, you will not run into financial bottlenecks straight away.

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