Freelancer taxes in Germany (2026).

Important context

How the numbers are built. Everything is the 2026 statute for a single person, no children, no church membership, resident the whole year, below pension age. (1) Income tax: the §32a EStG tariff is written as five brackets on taxable income (profit minus the deductions below). The two curved zones use the `rateTo` extension: zone 2 (12,348 to 17,799) has a marginal rate rising from 14% to 23.97% and zone 3 (17,799 to 69,878) from 23.97% to 42%, exactly the statutory (A·y + B)·y formulas; the bracket integral at the end of zone 2 is 1,034.872 against the statutory constant 1,034.87, and at 69,878 it is 18,213.065 against 18,213.13 from the 42% formula (difference 0.065 EUR). The statute rounds taxable income and the tax down to whole euros, which the continuous brackets do not: the schedule is within -0.06 and +1.0 EUR of the statute on whole-euro incomes. (2) Solidaritätszuschlag: for a single person the Freigrenze of EUR 20,350 is reached inside the 42% zone, where the income tax is 0.42 × x − 11,135.63, so the Soli is piecewise linear in taxable income x: 0 up to x = 74,965.79, then 11.9% × 0.42 = 4.998% of x up to x = 116,604.55 (where 11.9% × (T − 20,350) equals 5.5% × T), then 5.5% × 0.42 = 2.31% up to 277,825, then 5.5% × 0.45 = 2.475%. It is within 0.13 EUR of min(5.5% × T, 11.9% × (T − 20,350)). (3) Health and long-term care insurance: a freelancer who is not insured through an employer or the KSK is a voluntary member of the statutory scheme (or privately insured). The scheme uses the reduced rate 14.0% (no Krankengeld; §243 SGB V) + the announced average Zusatzbeitrag 2.9% + care 3.6% + the childless surcharge 0.6% = 21.1% of profit, with a floor of 15,820 (1/90 of the monthly Bezugsgröße × 360 days) and a ceiling of 69,750, i.e. between EUR 3,338.02 and EUR 14,717.25 a year. It is a deductible Sonderausgabe in full (health basic cover and care are deducted in full, §10 Abs. 4 EStG), entered as a `deductibleFrom: profit` component placed before the income tax. Your own Kasse's Zusatzbeitrag differs from the 2.9% average; each 0.1 point is EUR 54 a year at a profit of EUR 54,000, before the tax saving. (4) Pension insurance is NOT compulsory for most freelancers; it is for 'arbeitnehmerähnliche Selbständige' (§2 Satz 1 Nr. 9 SGB VI: no employee who is insured, and essentially one client). The option `oneMainClient` adds 18.6% of profit between EUR 7,236 and EUR 101,400 (EUR 1,345.90 to EUR 18,860.40), fully deductible as Altersvorsorgeaufwendungen (cap 30,826 for 2026, not reached). The pension contribution is placed FIRST because both insurances are assessed on the profit before any deduction; when it is active the health component's rate is grossed up to 21.1% / (1 − 18.6%) = 25.9214% because the engine's profit base has already been reduced by the pension contribution; minimum and maximum are unchanged, so the result is exact for every profit. The first three years after starting are exempt on request (§6 Abs. 1a) and, without a proven income, the contribution runs on the Bezugsgröße (47,460) — neither is modelled. (5) A Sonderausgaben-Pauschbetrag of EUR 36 (§10c) is deducted as a notional amount. Level of precision: against my own statutory chain (taxable income and tax rounded down to whole euros) the schedule differs by at most 1.4 EUR of net income on a grid of 900,000 revenue with expenses of 0%, 10%, 35% and random levels. Is IT work freiberuflich? Not settled in general: software developers are not a listed profession, they qualify only as an 'ähnlicher Beruf' of the engineer or the Diplom-Informatiker when training and activity are comparable in breadth and depth (BFH III B 244/11; VIII B 88/24). If the Finanzamt treats the activity as gewerblich, use de-sole-trader. Not modelled: Kirchensteuer (8% of the income tax in Bayern and Baden-Württemberg, 9% elsewhere, deductible; BZSt), splitting for married couples, children (Kinderfreibetrag, lower care rate), Krankengeld cover (general rate 14.6% + 2.9%, 96% of the health part deductible: EUR 156 / 342 / 452 less net income at profits of 25,000 / 54,000 / 90,000), private health insurance (risk-rated), the Zusatzbeitrag of a specific Kasse, Betriebsausgaben beyond the expense slider, Investitionsabzugsbetrag, loss carry-over, VAT (the Kleinunternehmerregelung, UStG §19, exempts a business up to EUR 25,000 turnover in the previous year and EUR 100,000 in the current year from VAT only), the Künstlersozialkasse (artists and publicists only), Rürup/Basisrente (deductible up to the same 30,826 cap). Germany has no special expatriate tax regime for employees (not found in the EStG; a 2027 relief package announced by the BMF on 2 July 2026 is not law and not used). From 2027 the tariff is due to change (BMF announcement of 2 July 2026: top rate from 70,600, 45% from 250,000, 47% above 280,000), so the figures are 2026 only. Access to the statutory health insurance modelled here is not open to everyone: a person may join it voluntarily only with a prior statutory insurance record (at least 24 months in the five years before leaving compulsory insurance, or 12 months without a break immediately before; § 9(1) Nr. 1 SGB V); a full-time self-employed person is not compulsorily insured as such (§ 5(5) SGB V); and a non-EU national whose residence permit requires a secured livelihood, as the self-employment permits do, is not caught by the catch-all compulsory insurance either (§ 5(11) SGB V). A newly arrived non-EU freelancer is therefore usually privately insured (PKV), whose premium the insurer sets from entry age and health rather than income; it is not modelled here (see the healthcare-private-cost indicator) and would replace the health and care line.

Important context

Same chain as de-freelancer (see its notes for the tariff, the health and pension contributions and what is not modelled) for an activity the Finanzamt classes as Gewerbebetrieb (§15 EStG), plus Gewerbesteuer. Gewerbesteuer: Gewerbeertrag = profit (rounded down to 100) minus the EUR 24,500 allowance for natural persons (§11 GewStG); Steuermessbetrag = 3.5%; tax = Messbetrag × Hebesatz of the municipality (Berlin 410% is used). The trade tax is not deductible (§4 Abs. 5b EStG) so it reduces neither the health base nor the income-tax base. EStG §35 credits 4.0 × Messbetrag against the income tax, capped at the trade tax actually paid and at the income tax attributable to the trade income. So the net burden is (Hebesatz − 400%) × 3.5% × (profit − 24,500) = 0.35% of profit above 24,500 in Berlin. The cap never binds here: it would need the income tax to fall below 0.14 × (profit − 24,500) or a Hebesatz under 400%; I checked every profit from 24,500 to 3,000,000 in steps of 100 on the statutory chain (smallest margin: income tax exceeds the credit by EUR 1,397 without the pension option and by EUR 322 with it). The same net rates for other cities (all above 400%, so the same proof applies): Frankfurt 460% → 2.100%, Hamburg 470% → 2.450%, Cologne 475% → 2.625%, Munich 490% → 3.150% of profit above 24,500 (EUR 619 / 723 / 774 / 929 a year at a profit of EUR 54,000 against EUR 103 in Berlin). Why this is a separate scheme: the §35 credit reduces the income tax that the Solidaritätszuschlag is charged on (SolZG §3 Abs. 2, EStG §2 Abs. 6), so the Soli starts later: it is 0 until the income tax after the credit passes 20,350, which is at taxable income about 107,575 without and 117,006 with the pension contribution (credit = 0.14 × (profit − 24,500), and profit = taxable income + 14,753.25 without, + 33,613.65 with the pension contribution at profits above 101,400). The folded Soli therefore has its own brackets for each answer to the pension question, exact for taxable income above 69,879 where the Soli is not zero; the Soli of a trader with the credit would otherwise be overstated by EUR 514 at a profit of 100,000 and EUR 1,590 at 150,000. Residuals: the statute rounds the Gewerbeertrag down to 100 (up to 0.35 EUR of net trade tax, up to 1.7 EUR of Soli) and the income tax to whole euros; the schedule is within -1.7 and +1.0 EUR of the statute on a grid of 900,000 revenue. Not modelled: Hinzurechnungen and Kürzungen of GewStG §§8-9 (interest, rents, licences above EUR 200,000), municipal variation beyond Berlin (see the rates above), IHK fees, and everything listed in de-freelancer. Access to the statutory health insurance modelled here is not open to everyone: a person may join it voluntarily only with a prior statutory insurance record (at least 24 months in the five years before leaving compulsory insurance, or 12 months without a break immediately before; § 9(1) Nr. 1 SGB V); a full-time self-employed person is not compulsorily insured as such (§ 5(5) SGB V); and a non-EU national whose residence permit requires a secured livelihood, as the self-employment permits do, is not caught by the catch-all compulsory insurance either (§ 5(11) SGB V). A newly arrived non-EU freelancer is therefore usually privately insured (PKV), whose premium the insurer sets from entry age and health rather than income; it is not modelled here (see the healthcare-private-cost indicator) and would replace the health and care line.

Important context

Models the full chain to the owner's pocket for a GmbH (or UG) that has one shareholder who is also the managing director, pays no salary and distributes the whole year's profit (after the corporate taxes) as a dividend the same year. Corporate level: Körperschaftsteuer 15% (§23 KStG, 15% for assessment years up to 2027) + Solidaritätszuschlag 5.5% of it (0.825%; no Freigrenze for a corporation) + Gewerbesteuer at Berlin's Hebesatz 410% × 3.5% = 14.35% (a GmbH is a trade by legal form; the EUR 24,500 allowance is for natural persons and partnerships only; GewSt is not deductible), 30.175% together, entered as one deductible line so that the dividend is the base of what follows. Other cities: Frankfurt 16.10% / Hamburg 16.45% / Cologne 16.625% / Munich 17.15% trade tax instead of 14.35%. Owner level without the application (option teileinkuenfte off): the GmbH withholds Abgeltungsteuer 25% + Soli 5.5% of it = 26.375% on the dividend above the EUR 1,000 Sparer-Pauschbetrag. The owner of at least 50% is self-employed, not an employee, so there are no employee social-insurance contributions; health and care insurance is voluntary GKV (or private) and, unlike for a salary, is levied on the dividend too: 21.1% (14.0% + 2.9% + 3.6% + 0.6%) of the dividend between 15,820 and 69,750 (GKV-Spitzenverband: all income counts, 51 EUR Werbungskosten on capital income, not modelled). Option `teileinkuenfte` (default true): on application (§32d Abs. 2 Nr. 3 EStG, shareholder with at least 25%) 40% of the dividend is exempt and 60% goes through the §32a tariff after the health and care contributions (deductible) and the EUR 36 Pauschbetrag, with the Soli Freigrenze; no Sparer-Pauschbetrag. It is cheaper than the Abgeltungsteuer at every revenue from EUR 20,000 to 400,000 (at 60,000 of revenue the levies are 41.0% of revenue instead of 56.6%, 15.6 points lower), so the default assumes the owner applies; the application is the owner's choice. Its health component carries a grossed-up rate of 35.1667% (21.1% / 0.6) because the engine's base is already 60% of the dividend; minimum and maximum amounts are unchanged. The salary assumption is the main judgement call. Germany has no statutory minimum salary for a Gesellschafter-Geschäftsführer and none was found. No salary means the owner takes everything as a dividend: that is an upper bound. Paying out the whole profit as salary reproduces the freelancer's burden (minus the Arbeitnehmer-Pauschbetrag of EUR 1,230) before the GmbH's costs; a salary in between lands in between (indicative statutory computation, not modelled, levies as % of profit before salary at 54,000: no salary 62.8% (Abgeltungsteuer) or 45.6% (Teileinkünfteverfahren), salary 24,000: 44.3% or 40.0%, salary 54,000: 35.2%, against 36.0% as a freelancer). A GmbH only saves tax when profit stays inside it (the second layer is deferred), which a one-year model cannot show; at EUR 60,000 of revenue the GmbH route costs more than the freelancer route in every variant. Residuals: against my statutory chain the schedule differs by at most 1.5 EUR (Abgeltungsteuer path: exact). Not modelled: the EUR 51 GKV Werbungskosten (health overstated by 10.76), the owner's pension insurance (a GmbH owner working for one client could fall under §2 Satz 1 Nr. 9 SGB VI; how the DRV applies it to a sole owner without a salary was not verified), Kirchensteuer, retained profit, the GmbH's own costs (accounting, annual accounts, Handelsregister, IHK, notary: not modelled; share capital EUR 25,000 for a GmbH, GmbHG §5, lower for a UG), the Günstigerprüfung (§32d Abs. 6), losses, VAT and everything listed in de-freelancer. For a salary above zero, health contributions would run on salary plus dividend. Access to the statutory health insurance modelled here is not open to everyone: a person may join it voluntarily only with a prior statutory insurance record (at least 24 months in the five years before leaving compulsory insurance, or 12 months without a break immediately before; § 9(1) Nr. 1 SGB V); a full-time self-employed person is not compulsorily insured as such (§ 5(5) SGB V); and a non-EU national whose residence permit requires a secured livelihood, as the self-employment permits do, is not caught by the catch-all compulsory insurance either (§ 5(11) SGB V). A newly arrived non-EU freelancer is therefore usually privately insured (PKV), whose premium the insurer sets from entry age and health rather than income; it is not modelled here (see the healthcare-private-cost indicator) and would replace the health and care line.