Estimated Net Income
31.091,50 €
Total Deductions
33.908,50 €
Effective Rate
52.2%
How are self-employed individuals taxed in Germany?
Self-employed individuals pay income tax on their profit (revenue minus expenses). Depending on their activity, they may also owe Gewerbesteuer (trade tax). They must arrange their own health insurance and can voluntarily contribute to pension insurance. Quarterly advance tax payments (Vorauszahlungen) are required.
What is the difference between Freiberufler and Gewerbetreibender?
Freiberufler (liberal professionals such as doctors, lawyers, architects, and consultants) are exempt from Gewerbesteuer and do not need a Gewerbeanmeldung. Gewerbetreibende (trade businesses) must register their trade and pay Gewerbesteuer on profits above the EUR 24,500 Freibetrag.
Can self-employed individuals deduct health insurance premiums?
Yes, health and long-term care insurance premiums are deductible as Sonderausgaben (special expenses). The base health insurance contribution is fully deductible. Additional supplementary insurance may also be partially deductible.
Disclaimer: These calculations are estimates based on 2025 German tax rules and should not be considered professional tax advice. Consult a Steuerberater for your specific situation.
Income tax, social insurance, and VAT obligations for the self-employed
What taxes do self-employed people pay?
Self-employed people pay: Einkommensteuer (14-45% on profits), Solidaritätszuschlag (5.5% of tax if applicable), Gewerbesteuer (for Gewerbetreibende, not Freiberufler), and Umsatzsteuer (19% VAT unless Kleinunternehmer). On a €60,000 profit as a Gewerbetreibender, expect about €14,000 income tax, €7,000-€10,000 Gewerbesteuer, and €10,000 health insurance.
How do self-employed people handle health insurance?
You must choose between gesetzliche Krankenversicherung (GKV, public) and private Krankenversicherung (PKV). Public insurance costs about 14.6% plus supplement of your income up to €5,512.50/month. The minimum monthly premium is about €225. Private insurance can be cheaper when young (€300-€500) but increases with age. Both include Pflegeversicherung.
Is pension insurance mandatory for the self-employed?
For most self-employed, pension insurance is voluntary. However, it is mandatory for certain groups: teachers, midwives, craft trade owners, artists (through the Künstlersozialkasse), and people with only one client. If voluntary, you can pay €83-€1,404 per month into the state pension. Many self-employed prefer private pension solutions like Rürup-Rente or ETF savings.
How does the Gewerbesteuer-Anrechnung work?
If you are a Gewerbetreibender, you pay Gewerbesteuer (trade tax) but can credit up to 4× the Gewerbesteuermessbetrag against your income tax. For a Hebesatz of 400% or less, this means Gewerbesteuer is fully offset. In cities with higher Hebesätze (e.g. Munich at 490%), only part is offset. A Gewerbesteuer-Freibetrag of €24,500 means the first €24,500 profit is Gewerbesteuer-free.
What records must self-employed people keep?
You must keep all business receipts, invoices, contracts, and bank statements for 10 years. If using EÜR (income below €600,000 and profit below €60,000), maintain a simple income and expense record. Otherwise, you need full doppelte Buchführung. Use accounting software like lexoffice, SevDesk, or DATEV for compliance.
When are Vorauszahlungen due?
Income tax advance payments are due quarterly: 10 March, 10 June, 10 September, and 10 December. VAT returns are monthly or quarterly depending on your turnover. Gewerbesteuer advance payments are also quarterly: 15 February, 15 May, 15 August, and 15 November. Missing deadlines triggers Säumniszuschläge of 1% per month.
Bundesfinanzministerium-Aligned: Based on 2025 Bundesfinanzministerium rates and thresholds. For personal advice, speak to a qualified Steuerberater (tax adviser).
Disclaimer: This calculator provides estimates based on current German tax rates and thresholds for the 2025 tax year. It does not constitute professional tax, financial, or legal advice. Your actual liability may differ depending on your individual circumstances. Always consult a qualified tax adviser before making financial decisions. Read our terms
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