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Germany Side Hustle Tax Guide (Nebentätigkeit & Nebeneinkünfte)

A comprehensive guide to the tax treatment of secondary income (Nebeneinkünfte) in Germany. The €12,348 Grundfreibetrag applies to total income from all jobs combined. Mini-job employees can earn up to €538/month tax- and social-security-free, while short-term employment (kurzfristige Beschäftigung) is tax-free up to 3 months or 70 days per year. Freelancers register with the Finanzamt, while trades (Gewerbe) require registration with the Gewerbeamt.

Germany taxes your worldwide income from all sources combined. If you earn money from a side hustle alongside your main job, both incomes are added together and taxed at your marginal rate (your personal Einkommensteuersatz). The Grundfreibetrag of €12,348 applies only once to your total income — not per job. Certain small-income activities are exempt from tax and social security. For related reading, see our Personal Income Tax Guide → and Social Security Guide →.

Tax-Free Side Hustle Options (Steuerfreie Nebeneinkünfte)

  • Mini-Job (€538/month): From 2026, the Mini-Job monthly earnings limit is €538 (increased from €520 in 2024). Income up to this amount is tax-free for the employee (pauschal taxed by employer at 2% + social security flat rate). The employee pays no income tax and no social contributions on a Mini-Job. Multiple Mini-Jobs are allowed but the combined monthly total may trigger taxation.
  • Short-term employment (Kurzfristige Beschäftigung): Limited to 3 consecutive months or 70 working days per calendar year. The work must be temporary by nature (e.g., seasonal work, event staff). The employee pays no tax or social security on this income. The employer pays a flat-rate tax of 25% (plus Soli and church tax).
  • Übungsleiterpauschale (€3,000/year): Tax-free allowance for trainers, instructors, educators, and carers up to €3,000 per year (increased from €2,400 in 2022). Covers income from teaching, coaching, or artistic supervision.
  • Ehrenamtspauschale (€840/year): Tax-free allowance for volunteers in non-profit organisations. Available to anyone holding an honorary role (Ehrenamt) such as board members, treasurers, or club volunteers.

When a Side Hustle Requires Registration (Gewerbeanmeldung & Finanzamt)

  • Freelancing (Freiberufler): If your side hustle falls under the catalogue of liberal professions in §18 EStG (e.g., consulting, IT, writing, translation, design, teaching), you register only with the Finanzamt by submitting the Fragebogen zur steuerlichen Erfassung. No trade registration (Gewerbeanmeldung) is needed. You file an annual Einnahmen-Überschuss-Rechnung (EÜR) with your tax return.
  • Trading (Gewerbe): If your side hustle is commercial (e.g., selling products, handyman services, food trucks), you must register with the Gewerbeamt (trade office) via a Gewerbeanmeldung. The Gewerbeamt notifies the Finanzamt, which assigns a Steuernummer. You are subject to Gewerbesteuer (trade tax) if annual profit exceeds €24,500 (Freibetrag).
  • EÜR records: Regardless of whether you freelance or trade, you must track income and expenses using Einnahmen-Überschuss-Rechnung (cash-basis accounting). Use the official EÜR form (Anlage EÜR) in ELSTER. Separate business bank accounts are strongly recommended.
  • VAT consideration: If your side hustle turnover exceeds €22,000 in the previous year or is expected to exceed €50,000 in the current year, you must charge 19% Umsatzsteuer (VAT) on invoices. The Kleinunternehmerregelung (§19 UStG) allows small businesses to opt out of VAT.