While it may be possible to get by living and working in Germany without having fluency in the language, it’s certainly an advantage to have a bit of German in your arsenal – particularly when it comes to managing administrative tasks like bookkeeping, or advocating for yourself as you navigate the procedures of becoming a freelancer and managing your taxes.
Yet, often considered one of the hardest languages to learn, it takes a lot of time and effort to get a grasp on the German language beyond the basics of “ja”, “genau”, and “danke”. As a freelancer, a great place to start is getting familiar with the key words, terms, and concepts you’re bound to run into through the course of your work.
Print this page and stick it above your desk, write them down, or read them over your coffee each morning, if that’s what it takes to get familiar with the list of key terminology.
Key terms for freelancers in Germany
(Steuer)bescheid
A Bescheid or Steuerbescheid refers to a document that provides information on a tax assessment, as determined by the tax office. Bescheid translates directly to “notice” or “decision”.
Einkommen
Income
ELSTER Portal
ELSTER stands for “ELektronische STeuerERklärung”, meaning electronic tax declaration. The ELSTER portal is an online tax system designed by the German central tax office to enable anyone to submit their tax returns online. You’ll need to register with ELSTER in order to submit your taxes online.
(Steuer)erklärung
A Steuererklärung is a tax declaration or tax return. The second part of the word, Erklärung, translates directly to “declaration” or “statement”, and you’ll see it used in “Einkommensteuererklärung” (income tax statement), “Umsatzsteuererklärung” (value added tax statement), which are two types of tax return statements you’ll be required to submit as a freelancer.
Finanzamt
Tax office.
Fragebogen zur steuerlichen Erfassung
The application form for registering as a freelancer.
💡 Tip from Accountable: We have created a guide to help you correctly fill out the registration form. You can find it here.
Gesetz
Law. This is another word that you’ll see tacked onto the end of other words, such as “Umsatzsteuergesetz” (laws that govern value added tax) or “Einkommensteuergesetz” (laws that govern income tax).
Krankenversicherung
Health insurance. As a freelancer, you’re obliged to pay for your own health insurance. Your health insurance provider is called your “Krankenkasse”. You can either choose a private or public provider, but as a freelancer, once you’ve gone with a private provider, it is very difficult to switch back to a public health insurance provider.
KSK or Künstlersozialkasse
The KSK is a governmental health insurance scheme that assists artists by paying half of the contributions for their health insurance and pension. This means the artist pays approximately half of the insurance fees they would normally pay as a freelancer.
Mahnung
A reminder of an unpaid invoice. This could be something you receive from the tax office for a missed or late payment. You also might send one out to clients if they’ve failed to pay your invoices within a reasonable time
Rechnung
Rentenversicherung
Pension insurance. Freelancers are typically expected to arrange their own pension insurance, however they may take part in the public pension insurance system (GRZ or gesetzliche Rentenversicherung), and some classifications of freelancers (such as teachers) are obliged to participate in the public pension insurance system.
Säumniszuschlag
Not something you want to see on your letters from the tax office! This term refers to fees or fines for late payment or missed deadlines. You’ll see this if you’ve missed a payment or reporting period
Scheinselbstständigkeit
This is a term that people warned me about a lot when I first started freelancing in Germany. Translating to “false self-employment”, it’s something you need to be aware of and able to spot— particularly when signing on with a client on a retainer basis. Your freelance work could be classified as false self-employment if you take on a workload or level of expectations comparable to those of an employee. There can be repercussions for both you and for your client if your relationship is determined to be false self-employment
Selbstständig or freiberuflich
Self-employed or freelancing.
Solidaritätszuschlag
Solidarity surcharge. First introduced in 1991 after the fall of the Berlin wall, the “Soli” is a 5.5% supplementary rate on income tax that contributes towards the costs of German reunification. It’s due to be abolished after 2021—at least for most of us!
Steuer ID or Identifikationsnummer
A unique and permanent tax identification number, assigned to you when you first register as living in Germany. Your tax ID number is separate to any tax numbers assigned to you.
Steuer
Tax. Get used to this word, it forms the start, middle, and end of many a long, German compound word!
Steuerberater/in
Tax accountant.
Steuernummer
Tax number. You’ll receive a tax number from your local tax office once you register as a freelancer. Each time you register any additional freelancing activities (ie. if you’re a freelance writer and you wish to start working as a musician as well), you’ll receive another tax number for each new activity. Unlike your tax ID number, your tax number can change, for example if you move to a new city or region.
Überweisung
Bank transfer.
Umsatzsteuer or Mehrwertsteuer
Value Added Tax (VAT). As a rule of thumb, if you earn over 22,000€ annually, you must charge VAT on top of your regular rates and pay this amount on to the tax office, after any applicable deductions. The amount of VAT you charge is dependent on the nature of the work you do, and there has been a reduction in response to COVID-19, so make sure to check your individual obligations. There are slight differences between these two terms, but in practice you can treat them as one and the same.
Versicherung
Insurance
Voranmeldung
Pre-registration. You’re likely to see this word in the context of your tax reporting deadlines. It means that you report an estimation of your earnings prior to your official tax declaration.
Vorauszahlung
Prepayment. In some cases, freelancers are required to make tax pre-payments throughout the year, based on income estimations. Don’t worry though, it’s always reconciled in the end!
We’re here for you, in English and German!
While this list is by no means exhaustive, it’s a great place to start. Learning key terminology and concepts is useful—even crucial—to living and working successfully as a freelancer in Germany. We hope it empowers you to take an active role in understanding and managing your taxes and bookkeeping.
Even if you do have a grasp of these terms, it’s easy to get behind your bookkeeping or misunderstand a tax letter. Accountable is available in both German and English, helping you navigate your invoices, expenses, and tax reports. It’s as easy as eins, zwei, drei 😉
