{"id":2554,"date":"2021-11-23T12:56:21","date_gmt":"2021-11-23T11:56:21","guid":{"rendered":"https:\/\/www.accountable.de\/?p=2554"},"modified":"2025-07-31T10:12:31","modified_gmt":"2025-07-31T08:12:31","slug":"false-self-employment","status":"publish","type":"post","link":"https:\/\/www.accountable.de\/en\/blog\/false-self-employment\/","title":{"rendered":"Everything you need to know about false self-employment"},"content":{"rendered":"\n<p class=\"font-inter text-base leading-relaxed mb-4 first-of-type:mt-0 text-black wp-block-paragraph\"><span style=\"font-weight: 400;\">One of the biggest dangers for freelancers in Germany is possibly being guilty of false self-employment. This classification can not only end your freelance career, it can also have serious financial and legal consequences.&nbsp;<\/span><\/p>\n\n\n\n<p class=\"font-inter text-base leading-relaxed mb-4 first-of-type:mt-0 text-black wp-block-paragraph\"><span style=\"font-weight: 400;\">But no reason to panic. Once you know the criteria of false self-employment, it is quite easy to assess your own situation and eliminate that risk. On this page, you\u2019ll find all the information you need to understand false self-employment, as well as a free test to check whether or not you need to take action. <\/span><\/p>\n\n\n\n<p class=\"font-inter text-base leading-relaxed mb-4 first-of-type:mt-0 text-black wp-block-paragraph\"><a class=\"font-inter text-purple underline underline-offset-1\" href=\"https:\/\/getaccountable.typeform.com\/to\/KBIYFoON\"><b>Take the test right now.<\/b><\/a><\/p>\n\n\n\n<p class=\"font-inter text-base leading-relaxed mb-4 first-of-type:mt-0 text-black wp-block-paragraph\"><b>Table of content<\/b><\/p>\n\n\n\n<ul class=\"wp-block-list list-disc list-outside ml-0 mb-4 space-y-2\">\n<li class=\"font-inter text-base text-black\"><a class=\"font-inter text-purple underline underline-offset-1\" href=\"#1\"><span style=\"font-weight: 400;\">What is false self-employment?<\/span><\/a><\/li>\n\n\n\n<li class=\"font-inter text-base text-black\"><a class=\"font-inter text-purple underline underline-offset-1\" href=\"#2\"><span style=\"font-weight: 400;\">Who is affected by false self-employment?<\/span><\/a><\/li>\n\n\n\n<li class=\"font-inter text-base text-black\"><a class=\"font-inter text-purple underline underline-offset-1\" href=\"#3\"><span style=\"font-weight: 400;\">Who is checking for false self-employment?<br><\/span><\/a><\/li>\n\n\n\n<li class=\"font-inter text-base text-black\"><a class=\"font-inter text-purple underline underline-offset-1\" href=\"#4\"><span style=\"font-weight: 400;\">What are the criteria for false self-employment?<br><\/span><\/a><\/li>\n\n\n\n<li class=\"font-inter text-base text-black\"><a class=\"font-inter text-purple underline underline-offset-1\" href=\"#5\"><span style=\"font-weight: 400;\">What are the consequences of false self-employment?<br><\/span><\/a><\/li>\n\n\n\n<li class=\"font-inter text-base text-black\"><a class=\"font-inter text-purple underline underline-offset-1\" href=\"#6\"><span style=\"font-weight: 400;\">How can I reduce the risk of false self-employment?<br><\/span><\/a><\/li>\n\n\n\n<li class=\"font-inter text-base text-black\"><a class=\"font-inter text-purple underline underline-offset-1\" href=\"#7\"><span style=\"font-weight: 400;\">Test your status: Are you really self-employed<br><\/span><\/a><\/li>\n<\/ul>\n\n\n\n<h2 class=\"wp-block-heading font-degular scroll-mt-32\" id=\"1\"><b>What is false self-employment?<br><\/b><\/h2>\n\n\n\n<p class=\"font-inter text-base leading-relaxed mb-4 first-of-type:mt-0 text-black wp-block-paragraph\">The term false self-employment, or Scheinselbstst\u00e4ndigkeit in German, relates to the unique case of a person who is officially registered as a freelancer, but, based on their duties and working conditions, is legally considered an employee.<\/p>\n\n\n\n<p class=\"font-inter text-base leading-relaxed mb-4 first-of-type:mt-0 text-black wp-block-paragraph\">The labor laws in Germany require businesses to officially register their employees, and they are also obligated to pay insurance for each of their staff members. If companies fail to do so, e.g. to save money for the insurance, they are guilty of fraud, and might face serious consequences for their actions.<\/p>\n\n\n\n<h2 class=\"wp-block-heading font-degular scroll-mt-32\" id=\"2\"><b>Who is affected by false self-employment?<br><\/b><\/h2>\n\n\n\n<p class=\"font-inter text-base leading-relaxed mb-4 first-of-type:mt-0 text-black wp-block-paragraph\">It\u2019s not only the businesses who can come under fire for false self-employment. Freelancers themselves are considered to be just as equally guilty of fraud as their unofficial employers, and therefore also face potential fines and legal consequences.<\/p>\n\n\n\n<p class=\"font-inter text-base leading-relaxed mb-4 first-of-type:mt-0 text-black wp-block-paragraph\">It is a serious issue for freelancers in Germany, so you should understand the risks and criteria when<span style=\"font-weight: 400;\">&nbsp;<\/span><a class=\"font-inter text-purple underline underline-offset-1\" href=\"https:\/\/www.accountable.de\/en\/blog\/fragebogen-zur-steuerlichen-erfassung-germany\/\"><span style=\"font-weight: 400;\">registering your self-employed business<\/span><\/a><span style=\"font-weight: 400;\">.&nbsp;<\/span><\/p>\n\n\n\n<p class=\"font-inter text-base leading-relaxed mb-4 first-of-type:mt-0 text-black wp-block-paragraph\"><b>\ud83d\udca1Nice to know:<\/b><span style=\"font-weight: 400;\"> Even if you are operating as a small business owner, or <\/span><i><span style=\"font-weight: 400;\">Kleinunternehmer <\/span><\/i><span style=\"font-weight: 400;\">in German, you can still be guilty of false self-employment. <\/span><a class=\"font-inter text-purple underline underline-offset-1\" href=\"https:\/\/www.accountable.de\/en\/blog\/when-is-a-freelancer-a-kleinunternehmer\/\"><span style=\"font-weight: 400;\">Learn more about <\/span><i><span style=\"font-weight: 400;\">Kleinunternehmer <\/span><\/i><span style=\"font-weight: 400;\">in this article. <\/span><\/a><\/p>\n\n\n\n<h2 class=\"wp-block-heading font-degular scroll-mt-32\" id=\"3\"><b>Who is checking for false self-employment?<br><\/b><\/h2>\n\n\n\n<p class=\"font-inter text-base leading-relaxed mb-4 first-of-type:mt-0 text-black wp-block-paragraph\"><span style=\"font-weight: 400;\">There are a few different entities who can open an investigation into a potential case of false self-employment. These include:<\/span><\/p>\n\n\n\n<ul class=\"wp-block-list list-disc list-outside ml-0 mb-4 space-y-2\">\n<li class=\"font-inter text-base text-black\"><span style=\"font-weight: 400;\">The German pension fund\u00a0<\/span><\/li>\n\n\n\n<li class=\"font-inter text-base text-black\"><span style=\"font-weight: 400;\">The tax office<\/span><\/li>\n\n\n\n<li class=\"font-inter text-base text-black\"><span style=\"font-weight: 400;\">A health insurance\u00a0<\/span><\/li>\n\n\n\n<li class=\"font-inter text-base text-black\"><span style=\"font-weight: 400;\">The German labor court<\/span><\/li>\n<\/ul>\n\n\n\n<p class=\"font-inter text-base leading-relaxed mb-4 first-of-type:mt-0 text-black wp-block-paragraph\"><span style=\"font-weight: 400;\">It is also possible to ask for a status check yourself, and even your clients can inquire for an investigation into your collaboration. This might be the case whenever a client wants to prematurely terminate a contract, while freelancers might opt for investigation to benefit from the German protection from unlawful dismissal.<\/span><\/p>\n\n\n\n<h2 class=\"wp-block-heading font-degular scroll-mt-32\" id=\"4\"><b>What are the criteria for false self-employment?<br><\/b><\/h2>\n\n\n\n<p class=\"font-inter text-base leading-relaxed mb-4 first-of-type:mt-0 text-black wp-block-paragraph\"><span style=\"font-weight: 400;\">It is pretty difficult to prove false-employment, and it usually is a long process, requiring the revision of many different documents and contracts. Since it is considered to be a legal grey area, it is actually quite rarely proven beyond a reasonable doubt.&nbsp;<\/span><\/p>\n\n\n\n<p class=\"font-inter text-base leading-relaxed mb-4 first-of-type:mt-0 text-black wp-block-paragraph\"><span style=\"font-weight: 400;\">The following criteria have to be met in order to prove false-employment:<\/span><\/p>\n\n\n\n<ul class=\"wp-block-list list-disc list-outside ml-0 mb-4 space-y-2\">\n<li class=\"font-inter text-base text-black\"><span style=\"font-weight: 400;\">A freelancer is continuously spending more than 83% of their time working for a single client\u00a0<\/span><\/li>\n\n\n\n<li class=\"font-inter text-base text-black\"><span style=\"font-weight: 400;\">and the income from that particular client is making up 5\/6 of the freelancer\u2019s revenue<\/span><\/li>\n<\/ul>\n\n\n\n<p class=\"font-inter text-base leading-relaxed mb-4 first-of-type:mt-0 text-black wp-block-paragraph\"><span style=\"font-weight: 400;\">Additionally, the official bodies will check if the freelancer is receiving <\/span><b>direct instructions<\/b><span style=\"font-weight: 400;\"> from that client and if they are <\/span><b>part of the organisational structure <\/b><span style=\"font-weight: 400;\">of that company.&nbsp;<\/span><\/p>\n\n\n\n<p class=\"font-inter text-base leading-relaxed mb-4 first-of-type:mt-0 text-black wp-block-paragraph\"><span style=\"font-weight: 400;\">Direct instructions are around:<\/span><\/p>\n\n\n\n<ul class=\"wp-block-list list-disc list-outside ml-0 mb-4 space-y-2\">\n<li class=\"font-inter text-base text-black\"><span style=\"font-weight: 400;\">Working hours<\/span><\/li>\n\n\n\n<li class=\"font-inter text-base text-black\"><span style=\"font-weight: 400;\">Place of work<\/span><\/li>\n\n\n\n<li class=\"font-inter text-base text-black\"><span style=\"font-weight: 400;\">Duration of work<\/span><\/li>\n\n\n\n<li class=\"font-inter text-base text-black\"><span style=\"font-weight: 400;\">Work execution<\/span><\/li>\n<\/ul>\n\n\n\n<p class=\"font-inter text-base leading-relaxed mb-4 first-of-type:mt-0 text-black wp-block-paragraph\"><span style=\"font-weight: 400;\">And you are considered to be part of the organisational structure of a company if you\u2026&nbsp;<\/span><\/p>\n\n\n\n<ul class=\"wp-block-list list-disc list-outside ml-0 mb-4 space-y-2\">\n<li class=\"font-inter text-base text-black\"><span style=\"font-weight: 400;\">&#8230;have your own place of work within the company<\/span><\/li>\n\n\n\n<li class=\"font-inter text-base text-black\"><span style=\"font-weight: 400;\">&#8230;are being paid for overtime as well as sick days and leave\u00a0<\/span><\/li>\n\n\n\n<li class=\"font-inter text-base text-black\"><span style=\"font-weight: 400;\">\u2026you are entitled to social benefits<\/span><\/li>\n<\/ul>\n\n\n\n<h2 class=\"wp-block-heading font-degular scroll-mt-32\" id=\"5\"><b>What are the consequences of false self-employment?<br><\/b><\/h2>\n\n\n\n<p class=\"font-inter text-base leading-relaxed mb-4 first-of-type:mt-0 text-black wp-block-paragraph\"><span style=\"font-weight: 400;\">False self-employment is considered fraud, and is not taken lightly by the German tax authorities. It can have serious consequences for both the client as well as the freelancer, that might well be career-ending.&nbsp;<\/span><\/p>\n\n\n\n<h3 id=\"consequences-for-clients\" class=\"wp-block-heading font-degular scroll-mt-32\"><b>Consequences for clients&nbsp;<\/b><\/h3>\n\n\n\n<p class=\"font-inter text-base leading-relaxed mb-4 first-of-type:mt-0 text-black wp-block-paragraph\"><span style=\"font-weight: 400;\">If a company is found guilty of false self-employment, they are facing some serious legal consequences.&nbsp;<\/span><\/p>\n\n\n\n<p class=\"font-inter text-base leading-relaxed mb-4 first-of-type:mt-0 text-black wp-block-paragraph\"><span style=\"font-weight: 400;\">First of all, the respective freelancer must be officially employed by the client and is entitled to receiving a regular wage as well as paid leave, and is protected against unlawful dismissal.&nbsp;<\/span><\/p>\n\n\n\n<p class=\"font-inter text-base leading-relaxed mb-4 first-of-type:mt-0 text-black wp-block-paragraph\"><span style=\"font-weight: 400;\">In addition to that, the client has to retrospectively pay social security fees as well as income tax for the employee for the duration of their collaboration.&nbsp;<\/span><\/p>\n\n\n\n<p class=\"font-inter text-base leading-relaxed mb-4 first-of-type:mt-0 text-black wp-block-paragraph\"><span style=\"font-weight: 400;\">That alone can have a substantial impact on a company\u2019s cash flow, but there might even be a verdict of tax evasion lurking in the background if the courts in Germany determine that the client <\/span><span style=\"font-weight: 400;\">intentionally<\/span><span style=\"font-weight: 400;\"> committed fraud.&nbsp;<\/span><\/p>\n\n\n\n<h3 id=\"consequences-for-freelancers\" class=\"wp-block-heading font-degular scroll-mt-32\"><b>Consequences for freelancers<\/b><\/h3>\n\n\n\n<p class=\"font-inter text-base leading-relaxed mb-4 first-of-type:mt-0 text-black wp-block-paragraph\"><span style=\"font-weight: 400;\">It\u2019s not just the client who will be facing consequences for false self-employment. The freelancers themselves are actually also liable. This firstly means that their freelance status is revoked and they will be officially employed by their client.<\/span><\/p>\n\n\n\n<p class=\"font-inter text-base leading-relaxed mb-4 first-of-type:mt-0 text-black wp-block-paragraph\"><span style=\"font-weight: 400;\">What initially may sound not too bad quickly becomes more serious, as the freelancer is considered to be just as guilty of fraud as the client. Therefore, the new employer can deduct the outstanding payments for insurance and income tax from your wage, which massively impacts your earnings.&nbsp;<\/span><\/p>\n\n\n\n<p class=\"font-inter text-base leading-relaxed mb-4 first-of-type:mt-0 text-black wp-block-paragraph\"><span style=\"font-weight: 400;\">Finally, if you are found guilty of false self-employment, you have to retrospectively adjust your issued invoices, and correct potential VAT payments as well.&nbsp;<\/span><\/p>\n\n\n\n<p class=\"font-inter text-base leading-relaxed mb-4 first-of-type:mt-0 text-black wp-block-paragraph\"><span style=\"font-weight: 400;\">\u27a1\ufe0f <\/span><a class=\"font-inter text-purple underline underline-offset-1\" href=\"https:\/\/www.accountable.de\/en\/blog\/managing-your-taxes-as-a-freelancer-in-germany\/\"><span style=\"font-weight: 400;\">How to manage your taxes as a freelancer in Germany&nbsp;<\/span><\/a><\/p>\n\n\n\n<h2 class=\"wp-block-heading font-degular scroll-mt-32\" id=\"6\"><b>How can I reduce the risk of false self-employment?<br><\/b><\/h2>\n\n\n\n<p class=\"font-inter text-base leading-relaxed mb-4 first-of-type:mt-0 text-black wp-block-paragraph\"><span style=\"font-weight: 400;\">False self-employment can quickly become a real problem. That\u2019s why it is advisable to understand the criteria early on and to continuously check in with yourself to see if you may be wrongly considered self-employed. The following checklist can help you with that process.<\/span><\/p>\n\n\n\n<p class=\"font-inter text-base leading-relaxed mb-4 first-of-type:mt-0 text-black wp-block-paragraph\"><strong>Checklist for false self-employment<\/strong><\/p>\n\n\n\n<ul class=\"wp-block-list list-disc list-outside ml-0 mb-4 space-y-2\">\n<li class=\"font-inter text-base text-black\"><span style=\"font-weight: 400;\">Are you free to decide how to deliver your work?<\/span><\/li>\n\n\n\n<li class=\"font-inter text-base text-black\"><span style=\"font-weight: 400;\">Are you free to accept or decline new work or projects?<\/span><\/li>\n\n\n\n<li class=\"font-inter text-base text-black\"><span style=\"font-weight: 400;\">Are you able to negotiate the scope of your work?<\/span><\/li>\n\n\n\n<li class=\"font-inter text-base text-black\"><span style=\"font-weight: 400;\">Do you use your own equipment?<\/span><\/li>\n\n\n\n<li class=\"font-inter text-base text-black\"><span style=\"font-weight: 400;\">Can you set your own working hours?<\/span><\/li>\n\n\n\n<li class=\"font-inter text-base text-black\"><span style=\"font-weight: 400;\">Do you generate income from several clients? (Remember, no single client should make up more than 80% of your income)<\/span><\/li>\n\n\n\n<li class=\"font-inter text-base text-black\"><span style=\"font-weight: 400;\">If you only have one client, are you actively seeking new ones?<\/span><\/li>\n\n\n\n<li class=\"font-inter text-base text-black\"><span style=\"font-weight: 400;\">Do you advertise or market yourself as an independent contractor or self-employed person?<\/span><\/li>\n<\/ul>\n\n\n\n<p class=\"font-inter text-base leading-relaxed mb-4 first-of-type:mt-0 text-black wp-block-paragraph\"><span style=\"font-weight: 400;\">If you answer \u201cno\u201d to any of these questions, make sure to address this sooner rather than later. One way to do this is by finding new clients to make sure that your income is not dominated by just one client.&nbsp;<\/span><span style=\"font-weight: 400;\">\u27a1\ufe0f <\/span><a class=\"font-inter text-purple underline underline-offset-1\" href=\"https:\/\/www.accountable.de\/en\/blog\/how-to-avoid-false-self-employment-scheinselbststandigkeit-in-germany\/\"><span style=\"font-weight: 400;\">Find out more about how to avoid false-employment in Germany<\/span><\/a><\/p>\n\n\n\n<h2 class=\"wp-block-heading font-degular scroll-mt-32\" id=\"7\"><b>Test your status: Are you really self-employed?<br><\/b><\/h2>\n\n\n\n<p class=\"font-inter text-base leading-relaxed mb-4 first-of-type:mt-0 text-black wp-block-paragraph\"><span style=\"font-weight: 400;\">Still not sure if you are really self-employed? Our free test will help you answer that question once and for all!<\/span><\/p>\n\n\n\n<div style=\"width: 100%; height: 600px;\" data-tf-widget=\"fCPnh3NN\">&nbsp;<\/div>\n\n\n\n<p class=\"font-inter text-base leading-relaxed mb-4 first-of-type:mt-0 text-black wp-block-paragraph\"><script src=\"\/\/embed.typeform.com\/next\/embed.js\"><\/script><\/p>\n","protected":false},"excerpt":{"rendered":"<p>One of the biggest dangers for freelancers in Germany is possibly being guilty of false self-employment. This classification can not only end your freelance career, it can also have serious financial and legal consequences.&nbsp; But no reason to panic. Once you know the criteria of false self-employment, it is quite easy to assess your own [&hellip;]<\/p>\n","protected":false},"author":14,"featured_media":2552,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"inline_featured_image":false,"_themeisle_gutenberg_block_has_review":false,"footnotes":""},"categories":[184,27],"tags":[326],"class_list":["post-2554","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-become-self-employed","category-important-things-to-know","tag-type-of-self-employed"],"acf":[],"yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v28.5 - https:\/\/yoast.com\/product\/yoast-seo-wordpress\/ -->\n<title>Everything you need to know about false self-employment | Accountable<\/title>\n<meta name=\"description\" content=\"Find all the information you need to understand false self-employment, as well as a free test to check whether or not you need to take 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