Taxes and Social Security Contributions

Wage tax

In general, you do not pay income tax if your gross annual salary does not exceed 10.908 euros (as of January 2023). This applies to all marginal mini-jobs and usually also to short-term employment.

Tax classes

The payment of wage tax depends on the tax class you work with. With tax class 1, wage tax is only due when you exceed the above-mentioned amount. In the case of regular jobs that are performed on a permanent basis, wage tax may be levied. If you have another job in addition to your regular job, you will usually be taxed in tax class 6 and income tax will be due. However, if you remain below the above-mentioned tax-free amount, you will be reimbursed by the tax office in the following year when you file a tax return.

It is also advisable to declare the better tax class for the higher-paid job, i.e. to consider this job as your main job. Depending on your personal situation, tax classes 2 - 5 may also apply to you, which result in different wage tax deductions or allowances. This could be the case, for example, if you have children or a joint tax assessment with your partner. Tax class 1 applies to all single and childless employees. Class 6 generally applies when you take up a second job.

Flat-rate wage tax deduction

In the case of a marginal mini-job, there is the possibility of a flat-rate wage tax deduction, which can be borne by the employer. In this case, it is therefore not necessary to report personal income tax details. For all other types of jobs, it is advisable to provide the wage tax characteristics, as the flat-rate wage tax deductions are disproportionately high in these cases.

Internship and thesis in companies

If you receive a monthly salary of more than 520 euros during an internship or thesis in a company, then these activities are also subject to income tax.

Health insurance is a must

Since you must prove that you have health insurance when you enrol at the university, there are no deductions for health, nursing care and unemployment insurance when you work. This is the advantage of student status, which means that you can sometimes have more money in your account than "normal" employees for the same amount of money.

Health insurance can:

• a family insurance in the statutory health insurance (usually up to the age of 25),
• your own student insurance in the statutory health insurance system,
• a private health insurance (own or family insurance),
• a health insurance from the home country with which there is an agreement between the statutory health insurance providers (all EU countries, some other European countries as well as Turkey and Tunisia).

Student health insurance includes nursing care insurance.

Income limit and family insurance

If you take up a job, there are different income limits to consider for each option:

• If you earn a maximum of 520 euros from a marginal job, you can remain in the family insurance without being affected.
• As soon as you earn more than 520 euros, you must take out your own student health insurance. This also applies to earnings from an internship or as a bachelor's student.

Private health insurance

If you have private health insurance, the employer does not have to pay a flat-rate contribution for health insurance in marginal employment.

Voluntary health insurance

Students who are not covered by student health insurance due to their age (30 years or older) and have to take out voluntary health insurance should consider and calculate whether it would be more favourable to be classified as a "normal" employee in a regular job, i.e. with all proportional deductions in all branches of social insurance (except unemployment insurance). This can be cheaper than voluntary health insurance.

Health insurance for students from EU countries or countries with health insurance agreements

If you come from an EU country or another country with a health insurance agreement and take up a job, you must take out your own student health insurance for the duration of the job. This also applies to compulsory internships with pay or when you are writing your thesis in a company with pay. Only in the case of unpaid internships or if the narrow requirements of the bachelorand are met do you not have to take out your own health insurance.

As a rule, you must pay pension insurance contributions.

Even if you don't have to make any deductions from your social insurance while working, you will still have to pay pension insurance contributions. The pension insurance contribution is currently 18.6 percent, which is shared equally by the employee and the employer.

Mini-job

In the case of a marginal mini-job, you as an employee must pay a share of currently 3.6 per cent of the gross salary. It is important that you receive at least 175 euros per month. If you cannot ensure this due to irregular working hours and correspondingly fluctuating pay, or if you generally do not want to pay pension insurance contributions, you have the option of being exempted from compulsory pension insurance. In this case, only the employer pays a lump sum to the Minijobzentrale. However, an exemption from pension insurance can only be withdrawn after the mini-job has ended and you have taken up another mini-job or a new contract. While you can be exempted from compulsory pension insurance at any time (this applies to all mini-jobs), it is not so easy to go back. And if you are exempted, you will miss out on valuable points for the "someday-probably-pension".

Mini-job in private households

In the case of a marginal mini-job in private households, the pension insurance contribution for you as an employee is 13.6 percent of gross pay. Here, too, the minimum assessment basis of at least 175 euros applies and there is the possibility of exemption from compulsory pension insurance. You can apply for an exemption for a marginal mini-job at any time, even while you are still employed. This exemption then applies to all mini-jobs you have. Unfortunately, it is not possible to withdraw from the exemption and pay into the pension insurance scheme during the period of employment - this is only possible after you have ended the marginal employment and taken up a new job.

Transitional area

For an income between 520.01 euros and 1,600 euros, the pension insurance increases as the salary increases. This is considered a transitional range. An exemption from pension insurance is not possible. From 1,600.01 euros, 9.3 percent of gross pay is then paid into pension insurance.

Compulsory internship, final thesis in companies, short-term mini-jobs

Only remuneration during compulsory internships or as a bachelor or bachelor's student as well as for short-term mini-jobs are exempt from payments into the pension insurance - regardless of income.

Can't get enough?

If the information we've compiled on this topic isn't enough for you, just take a look (again) at studis-online. Here you'll find extensive information about studying and taxes and student health insurance.

In the flyer "Tips for Students: Jobben und Studieren" (Tips for Students: Working and Studying) from the Deutsche Rentenversicherung (German Pension Insurance), you'll find lots of useful information on social security contributions.