Rent, college fees, and going out with friends all cost a lot of money. So that you don’t have to rely on your parents, many students in Germany look for a part-time job to support themselves. Are you working as well as studying and asking yourself how much you are allowed to earn without having to pay those pesky taxes? We've got you. We are providing some ideas on the issue of auxiliary income as a student below!
Mini job = tax-free
As a student in Germany, you may earn up to 520 Euros a month without having to pay taxes to the state. If you are paid a wage every month on a mini-job basis, then you can earn up to 6,240 Euros a year. For students, there is an annual tax exemption threshold. This year it is 10,908 Euros.
You can increase your hours or do overtime without worrying about it because there’s still some room. A paid internship is also included in this figure as long as you do not exceed the tax exemption threshold. If you earn more than 520 Euros a month, then your employer must in principle pay taxes and social security contributions. You can however recover them by submitting a tax return.
The tax exemption threshold is adjusted every year. The sum you can earn tax-free in 2023 is 10,908 Euros but it doesn’t mean that this figure will be the same in future years. In most cases, the threshold goes up. So you should check every year how much you may earn without having to pay taxes.
What do you need to be aware of as a student employee?
Do you work as a student helper in Germany? Then you must keep a few more regulations in mind compared to someone on a mini job.
As a student helper, you are categorized as a normal employee. In most cases, you earn more than 520 Euros a month. As such you are automatically liable for taxes. In addition to taxes, you have to pay social security contributions. These are dependent on your wage and how many hours you’ve worked and are calculated based on them. As a student helper, you may not work more than 20 hours per week during term times. Should you work more than those hours, then you may have problems with your student status.
If you work more than 20 hours a week in Germany, then that status may be stripped from you. However, outside your regular semester dates (e.g. during university holidays) you don’t need to worry about this. You can increase your hours to earn more money. However, as a student helper you should carefully note the annual exemption threshold. If you cross that amount then you have to pay taxes on it.
How can you get a tax rebate?
No one likes doing it, but it can be very useful. We’re talking about the tax return in Germany.
Have you earned beyond the threshold with your part-time earnings? No problem! Collect all your payslips and wage statements so that you can submit a proper income tax return. You can do this in the comfort of your home, using for example online tax portal ELSTER Portal.
There are always set deadlines for submitting your income tax return. Make sure to find out when the next deadline is.
The first tax return can be somewhat tricky. Seek advice from your family and friends who have experience with it so that you can receive your rebate from the tax office.
Do I need to inform BAföG and others?
Many students receive BAföG for their studies to pay for their maintenance and other costs. You must be asking yourself if your BAföG becomes taxable alongside your part-time job earnings. The answer is: No!
BAföG is not considered income and as such tax-free. However, if you earn too much then it’s possible that your BAföG will be reduced.
Do you work in catering and receive tips? Tips are tax-free as long as you receive them directly from the patron and go directly into your pocket. If the tips to all members of the staff are collected in a “tip pool” and then distributed by the employer then such must be officially declared. Also in case you are self-employed, you will have to declare the tips according to the law.
During your studies, you may have different part-time jobs. The important thing is that if you do not wish to pay unnecessary taxes, then you stay within the annual exemption threshold. If you earn more than 520 Euros a month, but are still under the annual exemption threshold, then submitting a tax return is worthwhile for you. With spending a bit of time you don’t give away your hard-earned money to the state and you can receive a rebate from the tax office.