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0 pointsEscapado3y ago0 comments

You are not wrong that they are not the same but the difference is smaller than you think. Let's run the numbers:

Last year I worked for 210 days and I made 143.480€ (=85€/h) after deducting the 19% VAT. I paid 10.740€ for health insurance (which is capped) and 15.720€ for the pension fund (which I don't have to do but choose to do and this is the same rate an employer/employee would pay given that income) leaving me with 117.020€ taxable income. The income tax then is 117.020€ * 0.42 - 9.136€ = 40.012€ and 2.200€ Soli, leaving me with 74.808€ net income.

When you are employed then your employer has to pay half of your health insurance and pension fund so to have a net income of 74.808€ you "only" need to make 131.940€ per year or about 78€/h all things equal. So we are talking about a 10% difference. Now you could argue that an FTE would not work for 210 days but 200 or 190 days which would add another 5-10% difference but it would still be off from your original 33%.

To put this into perspective: I have been offered full time employment at almost every company I have worked for as a freelancer so far and the by far highest offer I got was 93.000€/year which is around 54.600€ net income - or about 20.000€ less net than I make right now. That is 2/3 of the average FTE income in germany.

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2 comments · 2 top-level

number63y ago

Thanks for the Financials. People in germany don't talk money very often.

sebasv_3y ago

I'm missing one very important cost on the contractor side: unemployment insurance. I don't know about German law but in the Netherlands all the numbers are comparable, except that your employer is required to insure you against loss of income. This insurance runs up to 1/3 of your insured income, which would put your taxable income at about 87.000. Of course you don't _have_ to take this insurance but if you want an honest comparison it should be included on both sides.