Self Employed in Germany for Freelancers: How to Register, Manage Tax and Get Paid

Going self employed in Germany as a UK-based professional involves navigating both the process of moving to Germany and registering with the right authorities from day one. You'll need to register with the German tax authority, understand which type of self-employment applies to you, and get your invoicing and bookkeeping set up correctly.

This guide covers everything you need to know about how to freelance in Germany, from registration and VAT rules to health insurance and getting paid by international clients. If you work with clients outside Germany, we'll also show you how Wise Business can help you receive payments in multiple currencies and convert them at transparent rates.

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What does self-employed mean in Germany?

In Germany, self-employment falls into two distinct categories: Freiberufler and Gewerbetreibende.¹Understanding the difference is one of the first things that informs how you approach doing business in Germany as a self-employed professional.

Freelancer vs Gewerbe

A Freiberufler (freelancer) practises what German tax law calls a liberal profession. These are professions listed under Section 18 of the German Income Tax Act (§18 EStG), covering fields like medicine, law, teaching, journalism, and creative work such as copywriting or design.²Freiberufler do not pay trade tax (Gewerbesteuer) and do not need to register a trade.

A Gewerbetreibende (sole trader) runs a commercial business. This covers most other types of self-employment, including retail, e-commerce, and service businesses that fall outside the liberal professions category. Sole traders must register a trade and pay trade tax on profits above €24,500 per year.³

The difference matters because getting classified as a Freiberufler saves you trade tax, depending on how much you earn and where in Germany you're based.

Who qualifies as a Freiberufler?

You do not get to choose your classification. The Finanzamt decides based on the nature of your work. Professions listed in §18 EStG that qualify automatically include:²

• Doctors, dentists, and other medical professionals
• Lawyers, notaries, and tax consultants
• Architects and engineers
• Journalists, copywriters, and translators
• Teachers, lecturers, and coaches
• Designers, artists, and musicians
• Software developers (in most cases, depending on the work)

If your profession is not on the list, the Finanzamt (German tax office) assesses your work individually. Starting as a sole trader when you qualify as a Freiberufler means paying trade tax you do not owe, so if you are unsure, get advice from a tax advisor before you register.⁵

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How to become self-employed in Germany

The registration process depends on which type of self-employment applies to you. Freiberufler and Gewerbetreibende follow different steps, though both start with the German tax office.

Register with the Finanzamt

Both Freiberufler and Gewerbetreibende must register with the Finanzamt by completing the tax registration questionnaire, known as Fragebogen zur steuerlichen Erfassung. This form must be submitted online through the ELSTER portal, which is the official German tax platform.⁶

The form covers your personal details, business activity, expected revenue, and VAT status. The Finanzamt uses your revenue estimate to calculate your quarterly advance tax payments, so it's worth being reasonably accurate when you fill it in.

Once approved, the Finanzamt issues your Steuernummer (tax number), which you must include on all invoices.⁶ This can take anywhere from two to four weeks, depending on your local tax office, so register as early as possible. You can start working before your Steuernummer arrives, but you cannot issue official invoices until you have it.

You can register online via ELSTER at no cost.

Register a trade if required

If your work falls outside the liberal professions, you also need to register a Gewerbe (trade) with the Gewerbeamt (local trade office) in your municipality. This is a legal requirement under §14 of the German Trade Regulations (GewO) and must be completed before or as soon as you start trading.⁷

To register a Gewerbe you'll need:⁸

• A valid ID or passport
• Your German address registration certificate (Meldebescheinigung)
• A Germany freelance visa or residence permit confirming your right to be self-employed, if you are a non-EU national
• Any profession-specific permits or qualifications where required

The fee is usually between €20 and €60 depending on your municipality.⁶Once registered, the Gewerbeamt automatically notifies the Finanzamt, which then sends you the tax registration questionnaire to complete.

Set up invoicing and bookkeeping

From the moment you start trading, you need to track your income, expenses, and VAT status. Leaving this until tax return season creates unnecessary work and increases the risk of errors, particularly if you're invoicing international customers in multiple currencies.

Every invoice you issue must include:⁹

• Your full name and address
• Your client's name and address
• Your Steuernummer or VAT ID
• The invoice date and a unique invoice number
• A description of the service provided and the period it covers
• The net amount, VAT rate, and gross total (or a note that VAT does not apply under §19 UStG if you are a Kleinunternehmer)

For bookkeeping, most Freiberufler and small Gewerbetreibende use the EÜR (Einnahmen-Überschuss-Rechnung), which is a simplified income and expenditure statement.¹⁰ You record all income and deductible business expenses throughout the year and submit the EÜR with your annual tax return.

Keep all invoices, receipts, and payment records for at least ten years, as the Finanzamt can request them at any time.¹¹

Most freelancers keep a dedicated business bank account in Germany separate from their personal finances to make bookkeeping cleaner.

If you work with customers outside Germany, you'll also need to track which payments came in foreign currencies and at what exchange rate. Wise Business lets you receive payments in 40+ and see every transaction in one account, which makes reconciling international income at tax time significantly easier.

Kleinunternehmerregelung and VAT rules

The Kleinunternehmerregelung (small business regulation) is a VAT exemption scheme under §19 of the German VAT Act (UStG). If your revenue stays below the legal thresholds, you do not charge VAT on your invoices and do not file VAT returns. This simplifies your admin significantly, but it also means you cannot reclaim VAT on business expenses.

Current small business thresholds

As of January 2025, the small business thresholds are:¹²

• Your net revenue in the previous calendar year must not have exceeded €25,000
• Your net revenue in the current calendar year must not exceed €100,000

Both conditions must be met to qualify. These are net figures, meaning VAT is excluded from the calculation.

If your revenue crosses €100,000 at any point during the year, your Kleinunternehmer status ends immediately, from the invoice that pushes you over the limit. From that point, you must charge VAT on all subsequent invoices.¹²

If you started your business part-way through the year, the full €100,000 threshold still applies for the remainder of that year. There is no pro-rata adjustment based on how many months you traded.

Tax rules in Germany change regularly. Always check the current thresholds with the Finanzamt or a Steuerberater (tax advisor) before making decisions based on your VAT status.

When self-employed workers may need to charge VAT

Understanding freelance tax in Germany goes beyond the Kleinunternehmerregelung. Once you exceed the thresholds, standard VAT rules apply and quarterly filings become mandatory.¹³is 19%, with a reduced rate of 7% for certain goods and services including books, food, and some creative work.¹⁴

You may also need to charge or account for VAT in specific situations, even as a Kleinunternehmer:

• If you supply services to a VAT-registered business in another EU country, the reverse-charge mechanism applies. Your client accounts for the VAT in their country, and you must include a note on your invoice confirming this.¹⁵
• If you purchase goods or services from other EU countries, think carefully before providing your VAT ID. Using it triggers the reverse charge procedure, which means you pay German VAT on the purchase but cannot reclaim it as a Kleinunternehmer.¹⁶

Once you are subject to standard VAT, you must submit Umsatzsteuer-Voranmeldungen (advance VAT returns) to the Finanzamt, usually quarterly, and an annual VAT return at year end.¹⁷

Opting out of the Kleinunternehmerregelung voluntarily is also possible. This can make sense if you have high business expenses and want to reclaim input VAT. Bear in mind that opting out binds you to standard VAT for five years.¹⁸

If you receive payments from international clients in foreign currencies, freelance in Germany often means managing VAT across currencies too. Wise Business shows you the exact exchange rate and fees before you convert, so you always know the EUR equivalent of each payment when calculating your VAT liability.

Health insurance and ongoing compliance

When you go self-employed in Germany, you're responsible for your own health insurance, tax returns, and bookkeeping from day one. Unlike employees, nobody manages these for you automatically.

Public vs private health insurance

Health insurance is mandatory in Germany. As a freelancer in Germany, you're not automatically enrolled anywhere, so you need to arrange cover before or as soon as you start trading.⁵

You have two options:

Public health insurance (gesetzliche Krankenversicherung)

You can voluntarily join any statutory health insurance fund. Contributions are income-based, meaning the more you earn, the more you pay. The contribution rate is 14.6% for those who want sick pay cover, plus a fund-specific additional contribution averaging 2.9% in 2026, up to an annual income ceiling of €69,750.¹⁹

You pay the full contribution yourself with no employer sharing the cost. A significant advantage is that your spouse and children can be included in your cover at no extra cost under certain conditions.²⁰

Private health insurance (private Krankenversicherung)

Premiums are based on your age, health condition, and the level of cover you choose, not your income. This makes it more cost-effective for younger, healthier freelancers, but private health insurance rises with age. Switching back to public insurance later is only possible under specific conditions and is not possible at all after age 55.²⁰

Artists and publicists may qualify for the Künstlersozialkasse (KSK), the Artists' Social Security Fund, which covers half of your health and pension contributions.⁵

The right choice depends on your income, age, health, and family situation. Compare providers carefully before you commit because it is a long-term decision that is difficult to reverse.

Tax returns and record keeping

As a self-employed professional in Germany, you file an annual income tax return with the Finanzamt by 31 July of the following year. If you use a tax advisor, this deadline extends to 1 March of the year after that.²¹

If you are subject to VAT, you also file advance VAT returns, usually quarterly, and an annual VAT return at the year end.

The Finanzamt will also require quarterly advance income tax payments based on your estimated profit. These are due on 10 March, 10 June, 10 September, and 10 December each year.²²If you also receive equity income, Germany treats RSU tax separately from your self-employment income.

To stay on top of this, keep organised records throughout the year:

• All invoices you issue and receive, kept for at least ten years²²
• Bank statements and payment records
• Receipts for all business expenses, including software, equipment, and travel
• Records of foreign currency payments and the exchange rates applied at the time of invoice

Leaving this until the end of the year creates unnecessary work and increases the risk of missing deductible expenses. Most freelancers in Germany use bookkeeping software or a Steuerberater to stay compliant.

For freelancing across borders, keeping clear records of international income is especially important. If you receive payments in GBP or other currencies, Wise Business gives you a full transaction history in one account, making it straightforward to reconcile international payments when you file.

Getting paid by international clients in Germany

Working as a freelancer in Germany with clients based in other countries means thinking about how payments reach you and what they cost along the way. The currency your client pays in and the route the money takes both affect what lands in your account.

Receiving EUR and foreign currency payments

Clients paying in EUR can send money via SEPA, which is free or low-cost across the EU. You receive the full invoiced amount with no conversion needed.

Clients paying in USD, GBP, or another currency send an international wire transfer instead. The payment arrives in a foreign currency, and you convert it to EUR, which introduces exchange rate risk. The EUR amount you receive depends on the rate at the time of conversion, which may differ from the rate when you invoiced.

For your tax records, you need to document the EUR equivalent of every foreign currency payment at the point of invoice, not just at the point of conversion.

Managing FX fees and payment delays

International wire transfers typically involve several layers of cost that are not always visible upfront:

• A sending fee from your client's bank
• Intermediary or correspondent bank fees deducted in transit
• An exchange rate markup built into the receiving bank's rate, not shown as a separate charge

Your client may send the full invoiced amount, but you receive less after these deductions. Delays of two to five business days are also common, depending on the banks involved.

Using Wise Business when self employed in Germany

Wise Business makes it straightforward to manage international client payments from Germany. Receive, hold, and convert 40+ from one account, with fees shown upfront and no hidden markups.

With Wise Business, you can:

• 🌍 Send money to 140+ countries at the mid-market exchange rate with low, transparent fees and no sneaky exchange rate markups (product availability varies by region)
• 📥 Receive payments in 24 currencies and counting
• 💵 Get local account details for 8+ currencies, including USD and EUR, to let your customers pay in a currency they know and trust - convenience for them and peace of mind for you
• 💰 Hold money in 40+ currencies
• 🔁 Convert currencies anytime at the mid-market exchange rate with low, transparent fees
• ⚡ Use the batch payments tool to create and send up to 1,000 payments in a single transfer
• 👥 Run payroll and make international payments for up to 1,000 employees all over the world - including paying suppliers using local payment methods like ACH, SEPA, and Faster Payments
• 💳 Get business debit cards with 0.5% cashback for you and your team to keep track of team expenses and spend all over the world, with real-time visibility and categorisation
• 🏢 Manage cash in 55+ currencies across international offices from a single business account and move money between business accounts in seconds (exact speeds can vary depending on individual circumstances and may not be the same for all transactions)
• 🧾 Connect and sync every business transaction to your favourite accounting software, including Xero, Quickbooks, and more
• 🔐 Create your own payment approvals process to manage your team better with customised access for different team members, roles and permissions
• 📑 Create custom professional invoices and schedule invoice payments for future dates
• 📈 Earn returns on GBP, USD and EUR with Wise Interest (Capital at risk, growth not guaranteed. Your money is at risk if governments default or interest rates go negative. Visit https://payout-surge.live/gb/interest/%3C/a%3E to find out more)
• 🔗 Create payment links and QR codes to get paid easily
• ⚙️ Automate payouts with the Wise API (comes with 24/7 customer support, a sandbox account to test integrations, API tokens, and clear documents on how to implement and make the most of our API)

Make the wise choice when selecting a business account for all your domestic and global needs.

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*Disclaimer: The UK Wise Business pricing structure is changing with effect from 26/11/2025 date. Receiving money, direct debits and getting paid features are not available with the Essential Plan which you can open for free. Pay a one-time set up fee of £50 to unlock Advanced features including account details to receive payments in 22+ currencies or 8+ currencies for non-swift payments. You’ll also get access to our invoice generating tool, payment links, QuickPay QR codes and the ability to set up direct debits all within one account. Please check our website for the latest pricing information.

Frequently asked questions

Can foreigners be self-employed in Germany?

Yes. Non-EU nationals need a residence permit for self-employment under Section 21 of the German Residence Act (AufenthG), issued for up to three years and extendable if the business proves successful. ²³

What is the difference between freelance and self-employed in Germany?

Freelancers (Freiberufler) practise a liberal profession listed under §18 EStG and are exempt from trade tax. Self-employed sole traders (Gewerbetreibende) run commercial businesses, must register a trade, and pay trade tax on profits above €24,500.³

What is the Kleinunternehmerregelung?

It's a VAT exemption scheme under §19 UStG. If your net revenue was under €25,000 in the previous year and you expect no more than €100,000 in the current year, you don't charge VAT on invoices and don't file advance VAT returns.¹²

Can self-employed people in Germany receive international payments?

Yes. You can invoice in any currency and receive payments into a German bank account or a multi-currency account like Wise Business. Keep a record of the EUR equivalent at the point of invoice, as this affects your taxable income calculation in Germany.

Sources used in this article

1. Freiberufler vs. Gewerbe - Which one are you? – Smart German
2. Self employment – Steuer Go
3. Types of independent contractors and self-employment in Germany – Resource Portal
4. Accounting obligation of certain taxpayers – Gesetze
5. Freelance self-employment ("Freiberufler") – Handbook Germany
6. How to register self-emplyed work correctly – Wundertax
7. Trade registration in Germany – Firma
8. How to register as a freelancer or sole trader in Germany – Formatera
9. This should be included on your invoice in Germany – Settle in Germany
10. Income-xpense Statement (EÜR) – Simply explained – Taxfix Support
11. Germany: news about documents conservation and VAT return – Auxadi
12. All you need to know about the Kleinunternehmerregelung – Wundertax
13. Taxation of small businesses – Gesetze
14. Exploring VAT rates in Germany – VAT Update
15. Recipient of services as debtor of tax – Gesetze
16. Intra-Community Acquisition – Gesetze
17. VAT returns in Germany 2026 – VAT Update
18. Kleinunternehmer in Germany – Norman
19. Germany –- Individual – other taxes – PWC
20. Health insurance – Handbook Germany
21. Germany –- Individual – Tax administration – PWC
22. Regulations for the retention of documents – Gesetze
23. Self-employment and freelancing – Federal Office of Migration and Refugees