Entering the professional music market – Q&A

Employees:

• have an employment contract or service contract with the employer.
• must follow their employer’s instructions regarding the time, duration, place and nature of work and are integrated into the employer’s operational processes.
• get a income tax card, are insured and the employer pays just under half of the costs for health insurance, pension insurance, unemployment insurance etc.
• if they are on sick leave, they generally continue to receive wages, and if they are unemployed, they receive unemployment benefits.

Self-employed:

• do not have an employment contract/service contract with an employer, but e.g. a contract for work with a client.
• independently organise their activity and working hours and can determine when, where and how they work.
• bear the entrepreneurial risk.
• have to pay health insurance separately.
• Caution: if a self-employed musician works primarily for one client only, this can lead to so-called „pseudo self-employment“ (“Scheinselbständigkeit”) – this can result in high additional payments for the client (and sometimes also for the self-employed musician).

In Germany, self-employment is divided into two types: “Freie Berufe” (freelance professions) and “Gewerbe” (trade). Different rules apply for these categories.

Freelancers are self-employed professionals with special qualifications. They have „income from self-employment“ and don’t have to pay trade tax (“Gewerbesteuer”). In addition, they have to observe fewer formalities (e.g. bookkeeping). They only have to register their self-employment with the tax office and apply for a tax number. However, not everyone can work as a freelancer – you have to belong to the „liberal professions“ [“freie Berufe”], e.g. law and tax professionals, writers and artists, medical professionals, teachers, engineers and architects. This is often the case with musicians or self-employed music teachers. In case of doubt, the tax office (“Finanzamt”) or a tax advisor can help with clarification.

If you are self-employed, but not a freelancer (Freiberufler), you are a tradesperson (“Gewerbetreibender”). If your business is a trade, you must pay trade tax (Gewerbesteuer). In addition, you have to register with the Trade Licensing Office (“Gewerbeamt”), pay membership fees to the Chamber of Industry and Commerce (“IHK”) and observe other formalities such as double-entry bookkeeping.

https://www.existenzgruender.de/EN/Die-ersten-Schritte/Gruendungsarten/inhalt.html

https://www.handbookgermany.de/de/self-employment

In order to set up a company together, you have to agree on a legal form.  The most simple form is to set up a civil law partnership [Gesellschaft bürgerlichen Rechts (GbR)] – a simple association between several people. If you want to limit liability, you can also set up a „UG“ or a „GmbH“ – but this leads to considerably more formalities.

https://www.existenzgruender.de/EN/Die-ersten-Schritte/Rechtsformen/inhalt.html

• Yes, you can be self-employed and at the same time work as an employee. However, you have to make sure that you do not violate any conditions in your employment contract, e.g. that you do not compete with your employer and that you do not work too many hours a week. It is best to get permission for self-employment from your employer beforehand. If you earn more in self-employment than in employment, this can trigger changes in social insurance and you have to inform the tax office.
  
  

You can teach either privately or at a public or private music school. At music schools, you can work either as an employee or as a freelancer. However, jobs with an employment contract are rare.

Job search websites:

https://www.musikschulen.de/service/stellenangebote/index.html (Germany-wide)
https://www.vdmk-brandenburg.de/page/jobs (Brandenburg)