[Part 2] 10 things about freelance in Germany: the ultimate guide

Work, language skills, health & retirement, insurances, termination

Handmade Software
13 min readJun 8, 2021


Employment in Germany is a safe bay for those who want to spare the hustle and an excellent starting point for those who have just recently moved. Going on your own and switching to an all-by-myself model can be a big challenge; here are the 10 things you absolutely must know before you switch to freelance.

Make sure you check out my guide on employment in Germany before you read this.

Things 1 to 5: difference to employment, registration, money, downsides, and taxes.

6. Working with German companies

Germans love predictability. Who doesn’t? When I have just started freelancing, I thought it would be similar to what people describe on Upwork — hourly contracts, multiple clients. And it would have happened if I wasn’t in Germany.

Almost employment

Most of the contract proposals I get are full-time and on-the-spot contracts and it’s hard to negotiate around that terms. People would treat me like an employee in the office and invite me to motivational meetings and vegan Tuesday breakfasts. I mean vegan food and getting paid for it 100 Euro per hour, I won’t say no that. But they didn’t care; I was absolutely puzzled.

In my early employment career, I was working for small companies and startups, where every employee is visible to the others, everyone is motivated to achieve the common goal, and sees success as a personal accomplishment, unlike the corporate structures, especially German corporate.

And the truth is, only a few of the smaller companies will be able to pay an hourly rate you can get from the corporate, so at least at the beginning, you will stick with them, which means “almost” employment. And corporates don’t care about an extra hundred grand; it’s just a rounding error in their budget. Way more important is that you fit in.

Size matters

Your main instrument in searching your contracts will be your CV and project portfolio. Like any lazy programmer, I’ve created freeturn — a Django Wagtail-based automating for your daily routine when you search for a contract, create invoices, and some more.

My first CVs were only a couple of pages long, and they didn’t pass the HR manager in the intermediate company — “Is it everything you got, mister Schiffer? But it’s only three projects…”.

After a long trial and error, I figured that two rules work

  • exact word matching — your CV must have exactly the technologies in the job description. This would score you up in the automatic matches too.
  • the longer, the better.

So my CVs are now 40 pages long, consisting of 1–2 pages of the relevant experience and a full listing of all projects I’ve done in the past. Does anyone read that? No. But every German recruiter now knows that you are an expensive girl; look like how XXL-extra fat juicy your CV is.

Besides that, freeturn rearranges the projects and highlights ones having the exact match with the job description, so the recruiter thinks, “omg, they are the chosen one, the one from the prophecy.”

Highlight and rule

Physical presence means a lot.

Before the pandemic, 99% of the project inquiries demanded physical presence and a smaller pay rate for the remote with a totally intense serious face. Like as if I’m in your sweaty office, my code will get any better.

Germans don’t like change. In fact, they live in 1995 in so many dimensions of their lives: they read news on paper, watch Tagesschau on the television, use cash, and don’t trust the Internet. As if not for the panorama, this wouldn’t have changed for decades, and they are deeply convinced that this can last forever.

This is the reason why Germans are so allergic to remote working. The thing that irritates Germans the most, especially in the South (Grüß Gott!), is when you are different. A German complies, so do you, ausländer. If Hans and Karl wake up at six-thirty, get their brötchen mit mettwurst, ride their Volkswagen to Büro, you dazugezogener must do even more so. And don’t vacuum on Sundays!

Hat doch immer so funktioniert

The hard weight German mentality, total inner resistance to innovation, and absence of the request for the change have led to the funny situation in German Industrie 4.0: the companies have money, but they don’t have the know-how required to leave 1995. Their own staff was trained to maintain the status quo for decades, so they are afraid of any system change, but disruption isn’t possible without risk. Mut zur Lücke, wasn’t it?

And Germans hate risk.

So the majority of the projects you will be summoned in are in a state of total devastation: no unit testing, no processes, no CI, no code quality. Monster functions 900 lines long nobody knows working or not, no QA, no Docker, and endless discussions that were important 20 years ago. Or some weird debates whether the half-dead python project needs type annotations (experienced that multiple times, what’s with those type annotations folks??).

And here you are in a very perplexing position. On one side, you are here to fix the problems. On the other side, the project has gotten to a state where the problems couldn’t be solved without an experienced developer. And you would think that the team should have been informed about that fact, but the situation is often the complete opposite: the team is the reason for this disaster, and they aren’t ready to admit it. So additionally to the technical skill you need to bring with you, your task is suddenly people management. Human beings of fleisch und blut. I didn’t figure it immediately, and some ugly situations have happened, which I’m not proud of.

So what can you do? I don’t know. I never was successful in solving this kind of problem. I’m a developer, and it’s hard to deliver the message: my presence here proves it more than a thousand words, and you need to sit and listen.

But what you can do is:

  • start small, don’t try to overthrow everything at once
  • limit the criticism, try not to be negative all the time
  • pick the tasks with the immediate and undoubtful result to increase your authority
  • pick the skeptic and try to make friends with them (by far the hardest for me)
  • try to technically assess the project before starting: no money will compensate the constant fight against complete ignorance; set the minimum you require.

Germans work very very very relaxed and hate rush: they will value accountability of your work way over your performance. In fact, the less you care, the better, and try not to use the word shate.

7. Language

My German is quite decent. I had the luck to be integrated into the community through my ex-partner, who was German, and we spoke German at home the whole time. Unlike many other ex-pats, I know.

Finding a way to communicate with locals is not easy. I can give the only piece of advice (captain obvious): communicate more through friends, work, content, and relationship. And don’t get discouraged, it’s been 10 years, and my German is still not perfect, so you are not alone in your struggle. Don’t be afraid of an error, learning is errors.

Particularly for freelancing, speaking German can become your killer feature. German companies suffer from severe staff shortages: universities don’t educate enough technical specialists, and the new generations don’t choose hard technical studies. Germany has even introduced a separate type of visa for tech applicants from other countries.

Even for those German companies, which practice English as the business language, the specialist search can be a real challenge. Almost every company I was working for had to pick the least weak application from all weak applications.

No joke, none of them could explain what HTTP stands for. You say anecdotal? I say symptomatic.

Even bigger is the struggle for the classic German companies, especially affiliated with the state in any way, because they cannot afford to switch to English. That would rub against the nationalstolz too much. And every nation trusts their countrymen more then ausländer.

So once you master German on a business level, your price as a specialist will skyrocket. For example, Django is not as popular as PHP and Javascript web frameworks are, but still, with it, I could pick projects. After the pandemic, the demand for good programming will significantly increase. Deficiencies in the country’s IT industry have already become obvious, but the mindset will remain the same and the catastrophic lag in technology adaption will need tramandeous womanpower to liquidate.

8. Health and retirement

Getting sick is a real risk for a freelancer. Not only are you not entitled to various payments, unlike employees, but a couple of other things also play a significant role.

Voluntary statutory insurance

As a freelancer, you can “voluntarily” participate in the statutory insurance. Be ready to the highest amount — around 900 Euro per month, varying from company to company. You will probably switch from employment to freelance, so all you need to do is notify your insurance company about “freiwillige”, voluntary insurance you want. Why is it voluntary? Unlike employees, you are not obliged to be in statutory insurance anymore. You can actually switch to private regardless of your income.

Why is it so expensive compared to around 450 Euro/month maximum you would pay as an employee? The employer pays half for the employees; you are your own employer now, so you pay the whole amount. No extra service or privilege is included in this amount.

The insurance company will calculate the monthly payment based on your income estimation. If you think your income will be higher than 4.837,50 Euro/month (2021), and it probably will, you will pay the highest monthly rate. At the end of the year, the health insurance will get the tax declaration decision from the finanzamt and calculate the final amount you owe. Many things work like this in Germany.

Sick pay

When you get sick while being an employee, you will receive the full salary for up to 78 weeks of your sickness (ca. 1.5 years). The first 41 days of the sickness are paid by the employer and the rest — by the health insurance. As a freelancer, you don’t have this option by default, so you have to take care of it separately.

BARMER, for example, offers different options for sick pay (others won’t be much different, this market is totreguliert). You can pick the 22nd, 42nd, or 92nd day of sickness as the beginning of the payment; the sooner, the more expensive it will be. The insurance won’t pay for ongoing sickness, so it’s better to take care of it when you are healthy. BARMER offers it regularly for 1% of the income, but don’t get fooled: unlike the health insurance, which has the upper boundary, this 1% is calculated from all the income you’ve had in the period.

This also means, although you don’t need the sick note for the employer, you would still need it for the insurance, so it’s better to go to the doctor as soon as you get sick immediately and get all the papers needed.

Private health insurance

Private insurance pays a much wider spectrum of treatments, makes it easier for you to get a doctor’s appointment, and improves your experience with the German healthcare system. The biggest difference compared to public insurance is that your monthly fee is fixed and not connected to your income. So you can get the best service for 500 Euro per month. You have to be completely healthy when you start with it, though. The two main downsides of it are that the monthly fee can get much higher when you get older and returning to the statutory insurance only possible if you meet the special criteria.

Disability and retirement

One more thing you need to think about is what will happen if you can’t work anymore. Unlike the employees, you are not obligated to pay to the governmental retirement funds, so your governmental pension will be insufficiently small when you retire if you don’t care about it yourself.

Similar to health insurance, there is an option to participate in the German retirement system. Like everything in Germany, it’s incredibly complex and full of bureaucracy, so here is a short version of it:

You can pay a monthly fee to the governmental retirement fund, and those costs are deductible (see below). There are two types of participation: Riester and Rürup. Riester is a subsidized retirement fund, the state subsidies in the form of tax deductions and bonus payments to your fund. Rürup (or Basisrente) was meant for freelancers, as they are not obliged to pay into the governmental retirement funds. You can also open a non-Rürup private retirement fund, but it won’t be easily deductible anymore.

Retirement insurance is usually offered in a package with disability insurance (Berufunfähigkeitversicherung). Disability insurance is paid if you are no longer able to do your job because of an accident or a sickness. This one is handy, and I would totally recommend making it as soon as you can. Like with private health insurance, you have to be healthy to become a member.

Retirement is a complex matter. Summary: you only need to care for it if you plan to stay in Germany your entire life and want to be a freelancer for a significant amount of time. If not, probably it’s not for you: the interest rate is incredibly low and the amount of paperwork is huge.

And again taxes

Many of the payments you make to secure your future are deductible from the tax. In 2021 you can deduct up to 23.724 Euro per year for governmental or Rürup. Health insurance, care insurance, disability insurance, other private retirement insurances, liability insurance, and a couple of others are deductible as “pension expenses” (Vorsorgeaufwendungen). So if you are a freelancer, you will only pay half of it from your pocket.

9. Professional insurances

Employee liability is very limited in Germany. Like many other areas, the discriminator here is if the employee caused the damage on purpose or because of negligence. Usually, the employer would cover risky activities with their own insurance. As a freelancer, you are your own employer, and therefore you can be made responsible for your mistakes.

Professional liability insurance (Berufshaftpflichtversicherung)

You may have heard about private liability insurances, which is quite a common thing in Germany. Logically there is one for the professional activities too.

Liability insurance covers the costs in case of a mistake while performing your freelance activity. The insured amount can vary; as a developer, I would’ve started with a million Euro damage upwards.

Many other activities require this insurance, and the customers may ask you to prove that your professional activity is insured. Sicher ist sicher.

Legal protection insurance (Rechtschutzversicherung)

One more nasty difference to the carefree employee’s life is the contract partner’s paying morale. Delayed payments for the hired personnel can backfire quickly, so it practically doesn’t happen in Germany. Unlike the invoices of the freelancers.

Pick your partners wisely. If you work with a big customer or (omg) the state directly, you may wait for your money for months. This is also why many freelancers prefer working through an intermediate company to get their money quickly in case of a dispute. Then bigger companies play the sumo with each other.

Not only big companies can be assholes. Smaller partners can also try to use you too. In case that happens, you would have to sue them to get your money.

A civil process in Germany is a slow, expensive bureaucratic nightmare, which can take years to resolve. That is, among others, the reason why going to court is not an immediate decision in case of disagreement. You will also have an opportunity to settle your case in a pre-trial, so you absolutely have to try to make it this way.

Here is where legal protection insurance comes in handy. There are different options on the market, and it can include the initial contact to the lawyer or writing the text of the complaint to the court. Getting a letter from a lawyer is already a sign that you are ready to go to the war, so on one side, it’s a powerful message that can already be very effective, but on the other side, you have to use it carefully.

Not a simple question

As you might already get, Germany is an extremely bureaucratic country. Many of the activities are horribly overregulated, and even something innocent like dogsitting might need a license, special permission, or insurance for performing it. Google, ask around, and find groups that might help particularly you.

10. Know when it’s time to go

Now you all set up and start your first contract. And after a while you realize:

Freelancing is hard work.

You don’t have the same guarantees as the employees do. Some people see you as merely a mule for clearing up the work nobody wanted to do. You will have to think twice if you want to take sick leave, or take care of taxes, insurance, fight the stress. And that is why you might want to do it for only a limited time.

Initially, I’ve had an idea to earn some money in advance for doing things I like that don’t have financial potential, but that backfired dramatically. After years of working, I was finished mentally. I started questioning if I want to do programming ever again. See, if you constantly only see trouble around you, you start believing there is only trouble everywhere. But there isn’t!

Most of the contracts you will be getting are not from the software companies: neither Google nor Microsoft need help setting up a CI. In fact, there are no software companies in Germany, and most of the rest have had their best days already (don’t call SAP a software company). Those companies struggle to bring their business from the 20th century to the lane of IT or were founded recently but don’t sell technology as such. Most of the Internet businesses in Germany are retail or swapping papers (taxes, insurance, etc.). None of those can create disruptive informational technology or has technological authority whatsoever. German innovation started and finished with cars.

But on the bright side: the bar is low. Only a few other countries will allow you to earn hundreds of thousands of Euros for a single table view (no joke).


All of that I had to learn from my own experience, I can’t guarantee the complete correctness of it, and before you use any of that in a legal context, make sure the data is still current. And in case of doubt, seek the help of a lawyer. Good luck!


Also, check out my recent articles:

🇩🇪 Employment in Germany: the ultimate guide

🕒 Why your software quality degrades with time: short story

😃 6 Important Programming Languages and Their Original Purpose