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Sideline: How to start your own business successfully and legally!
Find out how self-employment as a part-time business is increasing in Germany, what requirements apply and what tax obligations exist.
Sideline: How to start your own business successfully and legally!
Self-employment as a part-time job is becoming increasingly popular in Germany. In 2024, KfW recorded a 5% increase in part-time business start-ups compared to the previous year. A total of 382,000 people took the step into self-employment, which not only offers independence and self-realization, but also the possibility of additional income.
The freedom to take up a profession is anchored in the German constitution. Article 12 allows freedom of occupation, but certain professions are tied to qualifications. Professions such as tax advisors, lawyers, doctors and midwives require special qualifications. Crafts also often require a master craftsman's certificate in order to be able to practice self-employment.
Legal framework
Employers do not have the right to generally prohibit secondary employment. Such a ban is only possible in cases of legitimate interest, such as competitive situations. However, aspiring self-employed people must comply with some reporting requirements. This includes registration with the trade office, which applies to all self-employed people - with the exception of freelance professions. They also have to register with the tax office and often join a chamber such as the Chamber of Crafts or IHK.
Self-employed people are required to register with a professional association (BG). Traders are automatically insured, but freelancers have to do this themselves. BG contributions are due from the first employee, while entrepreneurs are required to have insurance in a few professions. Social security is covered by the main job as long as the secondary job does not predominate.
Tax obligations and fine requirements
Income earned from self-employment is taxable. The current income tax liability is from 12,096 euros. If there is a small business regulation, tax advantages may apply for sales of less than 25,000 euros in the previous year and 100,000 euros in the current year. Trade tax liability occurs from an annual profit of 24,500 euros.
For bookkeeping, simple bookkeeping with an income surplus calculation applies to part-time work, while double-entry bookkeeping is only required for profits of 80,000 euros or sales of 800,000 euros. In addition, self-employed people must comply with legal obligations such as data protection guidelines and the obligation to provide legal notice.
An important aspect for anyone interested in starting a business as a part-time business is to take advantage of free start-up advice. The Chamber of Commerce and Industry or Chamber of Crafts offer valuable support and information that can make it easier to get started. Further information is also available on platforms such as Facebook Marketplace available.