Those who work freelance can organize their working hours themselves and just stay in bed or go on vacation if they want. They are often envied for this. The downside of the coin, however, is that no money is earned on days off like this. There is still no constant wage at the end of the month. Only that which you laboriously pull ashore yourself on a daily basis comes into play. Therefore, your working hours are not regulated and certainly not limited to 8 hours.
You have to pay for your insurance yourself and you usually cannot afford long vacations. Leisure is a luxury word for you. The biggest shortcoming of the freelancer is the uncertainty as to whether an order and thus money will come in. On the other hand, the company of a permanent employee can go bankrupt at any time.
Overview of the differences:
| freelancer | employee | |
| Working hours: | Self-determined, free time management, meaningful breaks | Predefined, sometimes flexible (flextime), fixed breaks |
| Insurance: | Voluntary and private provision, possibly compulsory insurance in the artists’ social insurance fund | Statutory insurance, employer pays part of it |
| Assignments: | Must be acquired | Are given |
| Workplace: | Home office, with customers or as a digital nomad | Is provided or specified (sales representative) |
| Leisure time / vacation: | Seldom plannable, hardly any free time, meanwhile no income | Fixed vacation entitlement, paid vacation |
| Decision-making authority: | All decisions are made by yourself, neither boss nor colleagues speak in. However, customers can also be stressful. In return, these may be rejected. | Often none, except for managerial positions. Boss makes decisions. Customers and colleagues cannot be selected. |
| Paperwork / accounting: | Must be done extensively yourself or prepared and delegated to tax advisors. | Only private taxes have to be dealt with, less extensive. |
| Earnings: | Can be controlled and increased by the hourly rate and performance | Specified wage according to the employment contract |
| Further education: | Has to be paid for yourself and is necessary to remain competitive | Is paid and funded by the employer |
| Risk: | High financial risk in the event of a poor order situation or in the event of illness | Low risk unless the business goes bankrupt. Then, however, unemployment insurance, transition allowance and a new job are possible. |
Freelance Status FAQ
According to howsmb, some of the most important questions have already been addressed in the article. Here we have put them together again briefly and concisely for you:
Do you have to pay trade tax as a freelancer?
No, only traders pay trade tax. All you have to do is pay sales tax and only if you are not a small business owner.
Do you have to register as a freelancer in the commercial register?
You are not obliged to have yourself entered in the commercial register . However, if you want that, you can arrange for the registration on a voluntary basis.
Do you have to register with a professional association?
Employer’s liability insurance associations have an important function in the prevention of accidents or operational hazards and illnesses as well as in occupational safety. Depending on the industry and the job you do as a freelancer, you may therefore have to be a member of the responsible trade association. In order not to violate this obligation, you should inform yourself in detail beforehand.
What insurance do you need as a freelancer?
The insurance obligations are clear in some areas (health insurance). However, there are some mandatory and some voluntary insurance that you should check and take out individually. Very important: professional liability insurance for freelancers.
Some examples:
- (Business) liability insurance
- (Professional) liability insurance
- Pension insurance
- Occupational disability insurance
Voluntary unemployment insurance
There are also compulsory insurances such as:
- Artists’ social fund
- Pension funds
The artists’ social fund is intended for artistic activities, while the pension funds regulate the insurance of independent professions that are eligible for a chamber, such as doctors, pharmacists, notaries and lawyers. The umbrella organization is the Arbeitsgemeinschaft Berufsständischer pensioneinrichtungen eV (ABV).
What rights and obligations do you have as a freelancer?
legal form
Usually you can choose your legal form yourself. As a freelancer, you’re a bit limited. However, the GbR or GmbH come into question for you – although you will then be subject to trade tax. The special legal form of the partnership company is popular. This can be agreed upon by two doctors, for example.
Register freelance work
Becoming a freelancer is easy. To do this, you only have to report the freelance secondary employment or the generally freelance work to the tax office in the ” Questionnaire on tax registration “. Because you can also be a part-time freelancer and work as an employee at the same time.
Artists’ social fund
The artists’ social security fund is compulsory insurance for artists and publicists. To be accepted, however, you have to meet certain conditions and provide evidence. You can find more about this, as well as the application forms, on the artist social insurance fund’s website.
