Your Side Job and Taxes
Taxes, insurances and other fees? No need to panic! We will give you a quick overview on the most important information especially compiled for students on these pages.
Please note: the numeric data refers to the tax year 2016. Whether you have to pay taxes and the amount to pay are highly dependent on your personal situation. Hence this page can only give you a general overview. We cannot take any responsibility for the correctness and completeness of the information on these pages. If you are in doubt or need further information regarding your situation, please contact a wage tax help association (“Lohnsteuerhilfeverein”) or a tax consultant (“Steuerberater”).
Taxes: If and how much taxes are to be paid by you depends on different criteria, e.g. your marital status, the number of your jobs and the types of contracts you have in each job. Basically two types of taxes can apply to your wages:
Wage tax (“Lohnsteuer”):
If and how much wage tax is to be paid depends on the tax class (“Steuerklasse”). The tax class again is mostly dependent on your marital status. As a single person you are automatically assigned to tax class I, single parents are assigned to tax class II, every side job besides your main job is taxed in tax class VI. Married couples can choose between tax classes III to V in different combinations (for their main job).
The following monthly wages are tax-free in the respective tax classes, you need to pay taxes on any amount earned above that:
tax class I (“Steuerklasse I”): € 945
tax class II (“Steuerklasse II”): € 1077
tax class VI (“Steuerklasse VI”): € 0
Let’s say you are not married and have two jobs besides your studies. In your first job you are able to earn up to € 945 a month without having to pay taxes. You have to pay taxes for any amount that you earn above € 945. You need to pay taxes for any amount of money that you earned in your secondary job (this applies to any number of jobs besides your main job).
The wage tax is deducted from your earnings on a monthly basis and transferred to the tax office (“Finanzamt”) automatically. It is possible that you have to pay wage tax in some months (e.g. if you worked a lot and are above the amount) and that you don’t have to pay taxes in other months.
Model calculation 1: you are not married and you have two side jobs. In your main job you earned 1020 Euros. In your secondary job you earned 350 Euros. You have to pay wage tax for your first job for an amount of 75 Euros. In your secondary job, you have to pay wage tax for the entire amount of 350 Euros.
Model calculation 2: you are a single parent and you have two side jobs. In your main job you earned 1020 Euros. In your secondary job you earned 350 Euros. You do not need to pay taxes on the wages from your first job because you are below the tax exemption limit (“Freibetrag”) of 1077 Euros. You have to pay taxes on your entire earnings of 350 Euros of your secondary job.
Income tax (“Einkommenssteuer”):
In 2016 the basic tax-free allowance for all of your incomes (“Grundfreibetrag”) in Germany is 8652 Euros. You need to pay taxes on all of your incomes that are above that amount. Income tax is not due until the entire year is over.
So, what counts as income? Basically EVERYTHING that you earn throughout a year, e.g. rental income, earnings from shares, fonds, and interests, but also other incomes you might have. The taxes for your wages are typically paid already with your monthly wage tax.
…and student grants (BAföG)? No worries! Student grants (both the grant share part = “Zuschussanteil” as well as the loan share part = “Darlehensanteil”) does NOT count as a taxable income (hence you do not need to state it in a tax declaration).
You do not have any other income besides your job (and possibly a student grant)? In those cases income tax can be important for you as well:
Case 1: if you have had to pay wage tax in certain months but your annual incomes from all sources combined is below € 8652, you are able to reclaim the wage tax that you paid too much.
Model calculation: You have earned 7550 Euros throughout the year through your job. You did not have any other income. In the months of August and September you worked exceptionally much and you earned 1050 Euros. In both months you had to pay wage tax on an amount of 105 Euros each. You can reclaim the taxes that you paid by making a tax declaration.
Case 2: If your monthly wages were below the taxation limit (you did not pay wage tax) but your annual earnings were above 8652 Euros, you need to pay income tax:
Model calculation: You have earned 750 Euros on a monthly basis is your first job (tax class I). You did not have to pay wage taxes as your monthly earnings were below the taxation limit. In all, your annual earnings were € 9000 (assuming you did not have any other income). At the end of the year you have to pay income tax on the balance of € 348.
Very simplified one could say: If your combined monthly earnings are under an average amount of 721 Euros, you do not need to pay wage or income tax (respecitely: you are able to reclaim any any wage tax that you may have had to pay, e.g. from a second job or from months in which you worked exceptionally much).
ATTENTION! In certain cases you are obligated by law to make a tax declaration – for example if you receive wags from several employers (unless it is taxed at a flat rate) or if your annual income is above € 8652. A wage tax help association (“Lohnsteuerhilfeverein”) or a tax consultant (“Steuerberater”) can give you further information for your specific situation. The income tax declaration is typically filed by the 31st of May of the following year. In some cases (e.g. if you are not obligated to submit one) this deadline can be suspended by up to four years (e.g. 13st of December 2020 for the tax year 2016).
Taxes and your work with Staff Eins:
In case you need to pay taxes on your wages, we will forward the necessary amount to the tax office. We provide an overview of your monthly wages including possible taxes in your monthly payment overwiev that you can find in our tool CAMAS. The overview is uploaded at the beginning of the subsequent month. This way you can easily keep track of your annual earnings and taxes – which is very handy if you need or want to make a tax declaration, e.g. to reclaim taxes that you may have paid to much.
In order to keep your taxation as low as possible it is important to make correct and complete statements in CAMAS. It is best to choose the employer as your main employer (“Hauptarbeitgeber”) where you make the most money (excempting “Minijobs” for 450 Euros that are taxed on a flat-rate). Please make sure that your information is corrrect and complete, otherwise we have to assign you to tax class VI.
Taxes and working contract:
Whether you have to pay taxes and how much also depends on the type of working contract that you have. For example most “Minijobs” (450-Euro-Jobs) are often taxed on a flat rate – but there are exceptins too, depending on what you agreed upon with your employer.
Taxes and your working contract with Staff Eins:
Staff Eins offers two types of working contracts. Wage tax needs to be paid on earnings from both contracts as soon as you meet the criteria mentioned above (wage tax and income tax if you are above the annual amount.)
To both working contracts applies: you need to pay taxes in tax class VI if you have several jobs and we are not your main employer. Should you have had to paiy too much taxes you can reclaim them by making a tax declaration.
How many taxes to I have to pay?
The tax rate in Germany is progressive, meaning: the more you earn, the more taxes you have to pay. This is especially good for students as their income is usually in the bottom margin of taxable incomes – being taxed with a low percentge.
You can find a multitude of calculators on the Internet that are able to calculate your taxes with regard your individual situation (also with regard to solidary tax = “Solidaritätszuschlag” and church tax = “Kirchensteuer”).