Job Discussion Forums

[Hod]

[The Overcoat]

You are a great fisherman, Hod. Very amusing.

[longtimeteach]

Well Hod,

As your info says you're in Asia I would assume that you could make the Guinness Book of World records for managing to be in two places at once.

If you are, as you say, on your second tour of teaching here in Germany and you aren't paying any tax or pension - well...if I could I would 'out' you. You qualify as a leech, pure and simple. A cheeky twit as well.

Actually, I think you're 'fishing' and having a grand time at it too.

[Hod]

Yes, I am in Asia and am winding you up. Now, let's get serious.

I did two one-year stints in Germany: Frankfurt and Hamburg. I paid health insurance, because it's quite literally a matter of life and death. As I said before, you also get huge discounts on routine optical and dental stuff. I advise any uninsured teacher to sort this out.

I worked totally freelance, and with a background in business and pretty good German, was quite successful. Saying that, after holidays, cancellations, etc, I averaged a gross of perhaps 2000 Euros a month. This thread's initial post highlights the deductions freelancers must pay, which would've left me a nett figure of about 500 Euros. What's that? 16 Euros a day?

You Holier than Thou types make me laugh, telling us that freelancers in Germany are paying all this tax. You're either naive or taught in Germany for about five minutes once upon a time.

Many freelance teachers in Germany are not paying tax. They're not going to up and leave and work in Saudi Arabia or wherever. Get used to it. Although it's none of your business, if you're so concerned, don't whinge about it on here. Tell the authorities. I would if I didn't like it. But you won't.

[longtimeteach]

Hod,

I wouldn't really 'out' anyone here - it was a bit of tongue in cheek admonition. I know a fella who's been here 25 years teaching and hasn't ever paid a cent of tax or pension. He has remained healthy so he hasn't had to fly back to get care from the NHS either. I don't know what he plans to do about all that in future and, as you said, it isn't my business and I wouldn't make it so. He moves around regularly and doesn't work long for any one place so I assume that since he officially "doesn't exist" as long as he keeps moving he'll be able to avoid getting caught.

I've been here for 6 years now, teaching the entire time. Early on I was advised that I needn't pay tax for the first 2 years because I'm EU. That was bad advice, as I soon found out. The school I was working for was audited by the government and all the teachers working there who weren't 'in the system' were outed at the time.

They checked our documents to see how long we'd been in Germany and promptly assessed the tax, due and payable right then, BTW, and turned our names over to the German pension authorities as well.

The German government does fairly regular audits of language schools to find the people who're working under the table.

I was assessed a huge back payment on my pension contributions and on my tax liability and had the choice to flee the country secretly or make my peace with it all and pay up right then - because I didn't want to go and I didn't know if they'd turn my name over to Interpol or something.

As I didn't have two pfennigs to rub together - having spent all I'd made just to live - I needed to arrange for making the payments. I had to take out a bank loan to pay it or else my bank account would've been frozen until it was paid. That would have meant me never seeing a pfennig for living expenses at all until the entire bill was paid. I'm still paying on the loan, plus making the regular contributions on what I earn now. If everything goes well and I get enough work, it will all be paid off next year. But I tell you, it's been really hard. Some weeks I feel ready to drop dead for all the hours I have to work and beg for just to get it all done.

When the bill is finally paid, I plan to leave Germany and teach elsewhere. Maybe I was too frightened and perhaps I should've run away and not paid anything - I don't know. But the fact is, I was caught - though I didn't even know I should've been caught! - and I stuck around to pay up.

It's happened to a LOT of people here, hod.

If it were me now planning on coming to Germany and teaching here, I wouldn't take the chance of working outside the system. If you would, that's your lookout - not mine. The information posted here is for any and all prospective Germany bound teachers and not to argue with or dispute your own - very lucky - previous experience in this country.

[Hod]

A sad tale.

Is there hope? Ironically, I used to discuss Germany�s huge taxes with my students. Despite being pampered with their permanent cushy contracts*, they were all claiming back loads of tax for things like travel. They really don�t know they�re born. Surely freelance teachers could claim for materials, travel and working clothes at the very least?

What about a Steuerberater? Anyone got one?

* You absolutely would not believe these contracts. I had a couple of interviews for technical positions in Germany. They were offering about 4500 Euros a month, 13.5 months pay a year plus huge bonuses at Christmas, six weeks holiday�basically all the benefits you could imagine. Needless to say, I didn�t get the job.

Whilst I�m moaning, I also taught some Arbeitsamt students. Whilst it�s not nice to be unemployed through no fault of your own, these guys were getting handouts of 60% of their previous salary!

Germany is a caring welfare state. It sickens me that they�re treating freelance teachers this way.

[dermott]

I'd like to come back on the question of tax in Germany. Longtimeteach - I'm sorry but your confusing the marginal rate of tax with the average tax rate. Sure the marginal rate could be 45% - but this is paid on the last � NOT total earnings. The website you refer to has a calculator for Lohnsteuer - which is paid by employees- the figures are pretty close to Einkommensteuer - paid by freelancers. On � 45,000 per year the income tax deductions amount to � 11,000 ie. average tax rate c. 25%. As German tax is steeply progressive and it's unlikely you'll earn this amount as a teacher in Germany the percentage deducted for tax will be significantly less.
Here is the link:

www.bundesfinanzministerium,de/facg/steuerber/1998-2005/start.htm

As for deductions from gross income there are many! Perhaps you need to get a good Steuerberater (tax advisor)!

As for 40 hours - this was your example - not mine! I agree it would be unrealistic to average anything like this.

On your dialogue with Hod -- just to say that I'm on your side - a pity the TEFL world has more than it's fair share of chancers and people who are running away from something - normally reality!

[longtimeteach]

Um...I have had a Steuerberater since the beginning of this mess.

A few years ago, the government was searching for ways to get revenue for their failing (and oh so caring - for some!) welfare state. Someone unearthed an old law that was passed in the 1930's but hadn't yet been enforced, regarding teachers and some others (but not all) working outside the pension system.

That was the year which begin the 'teacher hunt' and many teachers got a Bescheid for thousands and thousands of DMs in back payments, from the BfA. Neither they nor their Steuerberater knew anything about this old law!

Around that time, too, the government started looking around for 'lost' tax revenues in a serious sort of way. They began looking at those nasty high-earning, tax-shirking freelance teachers and started auditing schools', VHS's and companies' English language programs.

I've detailed what happened to me and have said it happened to many others as well. There was a mass exodus of teachers who could go and the ones who were brave enough to do it. Looking back I'd say I was stupid to have stayed and paid up but, at the time, I didn't want to keep looking over my shoulder because I didn't know how far the reach could be.

[longtimeteach]

Addressing Dermott's optimisim:

I was assessed the back tax, after being here for less than the two years I was told (by my school director) I'd be tax-exempt. Going back over my pay receipts, I and my Steuerberater found I'd earned the staggering sum of 16,000 DMs that first year. My Steuerberater said that 13,000 was the tax exempt limit but since I'd got all those receipts for travel, photo copies, books, etc. - totaling around 4,000DMs, I wouldn't have to pay any tax.

Wrong. As I mentioned before, the Finanzamt makes the final decision as to whether or not something is deductible and if there are clear rules, they seem to be quite elastic. I ended up paying 300DM in back tax that first year because they disallowed nearly all of my deductions for God knows why. They don't tell you, even if you ask.

One example: I don't have a car so I save all my train and bus tickets. If they aren't 100% readable (and many aren't - even new) they're disallowed. My photo copy receipts have to be signed by someone in the photo copy place and so forth. It also seems that if I've too many of those pesky little receipts, it's simply too much work for the Finanzamt to go through them. I don't know.

I could post my 2003 tax return here and prove you wrong Dermott but I won't. If you're determined to look on the bright side (though I wasn't aware there was one!) then do so. As I mentioned before, this information is for Germany-bound teachers who think the 'livin' is easy.'

Less than a year later I was assessed 20% (19.2 or .4 - I don't remember right now - but it's near 20%) on that 16,000DM yearly pay as well. That year I managed to do without having the health insurance but the Ausl�nderbeh�rde does get round to letting one know that, in order to maintain one's residence permit, one must show proof of having health insurance. That happens after the first year when one renews the Aufenthaltserlaubnis.

One more example of the language thing: When I first received all the demands for money, the papers were all in German legalese. Hell, I don't even understand English legalese.

I phoned up the Finanzamt regarding my upcoming 'appointment' and asked if anyone there spoke English and the reply was a terse, "Nein!" When I asked if they provided translators for government things, again the reply was, "Nein!" Ende.

In most English speaking countries when a foreigner has a problem that entails dealing with government officials, they're obligated to provide a translator for the proceedings and the forms. Not in Germany. I had to hire my own translator and those costs weren't deductible either.

I'm finished writing out this material. It is what it is and anyone can believe what they like. I'm not writing anymore about it - it's too depressing and I've said it all anyway.

"Everyone is entitled to their own opinion but not their own facts."

[dermott]

[quote]"Everyone is entitled to their own opinion but not their own facts."[/quote]

Couldn't agree more longtimeteach, which is why I'd encourage all would be teachers to Germany to research the facts and not rely on anecdotal evidence - particularily in the field of tax. This is why I've given the link. Let would be teachers in Germany work it out for themselves!

This has nothing to do with being optimistic or pessimistic and I have no reason to doubt your sincerity. In fact I think your posts are more than helpful to those considering freelancing. They stress the importance of getting professional advice before you start, knowing what paperwork to keep etc. I don't wish to sound smug on this and believe me I've made quite a few mistakes - but as you've learnt to your cost the Germans love the paperwork.

Just an observation on your comment on the language issue at the tax office though. I wonder what the reaction would be in the US or UK if somebody walked into the tax office and wanted their advice given to them in German?

[longtimeteach]

[Chris]

Hi guys...

Whoever put the link for the finance ministry... could you please check the link because I couldn't get it to work. I would be very interested in looking at it.

Thanks!

[Chris]

Nevermind. I found it.

Here's the actual link.

http://www.bundesfinanzministerium.de/fach/steuerber/1998-2005/start.htm

Enjoy

[harumaki]

Just read the original post and what has been said may well be true for some freelancers but it definitely doesn't have to be the case. I have worked here for several years as a freelancer too and have paid the top rate of tax but....200 euro for a monthly transport ticket? I have never paid more than 95 euro and that was for the whole of the VRR transport network in NRW (I live in Dortmund and had some work in D�sseldorf, a one-way journey of about 1 hour 30 mins). Health insurance? Being female of child-bearing age, I have always had to pay top whack for health insurance and I am with AOK which is considered to be one of the more expensive insurance orgs. I have never had to pay more than 200 euro and many of my colleagues were aghast when they heard I was paying so much.
Just two examples of how the calculations above can be tweaked to paint a cheerier picture of typical earnings in Germany. Call me a liar if you want but this is my own experience, for what it's worth.

[longtimeteach]

I wouldn't ever call anyone a liar if they said their experience was different from mine. It's as you say, sort of... that everyone has a different experience. I wouldn't have said you 'tweaked' anything, as I also have not done.

When I first joined the health insurance company I'm currently with, I was paying 758,00DMs per month for health coverage. I now pay nearly 400Euro per month. You're lucky to be in such a good rate bracket with AOK. I have my own insurance with DEVK and that's what it costs. One female acquaintance, who's German, pays around 400Euro per month for the Krankenkasse as well. The Krankenkasse charge is based on earnings and she'll soon have to leave them and get private insurance because, as she's one of the lucky ones, she's gots lots of work and makes good money - but her health insurance cost will remain around 400Euro per month.

I'm curious to know how you qualified to go on AOK. Normally, that company does not insure Freiberufliche Ausl�nder; which is what I was told when I visited the offices to enquire about AOK health insurance myself.

The transport ticket I use is a Preisstufe C in some months, which costs 92Euro. In other months, when I need to travel a bit further afield (and that's not too far afield - only 50kms away!) it costs 160,30Euro per month and this allows me to take the U-Bahn and buses in those other cities as well. VRR transport is grand if you're not going very far but it's as slow as molasses running uphill in January for longer trips and very costly if you need a faster train in a hurry.

If one depended only on the VRR then when classes are cancelled, get out early or whatever change happens, one would be paying a considerable amount above that 92,00Euro per month with extra EinzelTicket or Zuschlag tickets (and if you need to hop on the ICE - you'll be paying through the nose) to ride outside the VRR system - unless you were willing to wait until you could get the right VRR connections. You also can't use the VRR ticket for local bus transport or U-Bahn transport in other towns; you'd have to buy tickets for the local transport if you're out of area for your Preisstufe. That can add up.

All-in-all, I'd say you are darned lucky to have so few expenses and such low costs but if you visit a few more posting boards comprised mostly of teachers teaching here, you'll find that your own experience is rather unique. Glad to know someone is doing well with so few costs and, if it were me intending on traveling to Germany to teach, I'd be messaging you for all the secrets to your success, for sure.

Cheers!