Switching from employment to pseudo self employment - what is an equal salary in Austria/Germany [closed]

Question

I have the opportunity to switch from my current position as senior web developer (Austria) to being pseudo self employed (I'll work for one client only) with all the pros and cons, like

• no more extra month salary (13th/14th)
• no vacation (currently 25 days)
• no money when being sick

I'm trying to calculate, based on my current salary, which is around 52000 € before taxes a year, how much I need to earn when being self-employed.

I was told, that besides the obvious 13/14th month salary missing and also no paid vacation, I need to earn even more, since I have to think about times when I am sick. I'll need to account health insurance too, there is not much other things I can think of. Definitely a tax consultant, I'll need that too.

As I suppose, this kind of calculation might be quite country-specific, I'd prefer suggestions/estimates from people from Germany/Austria.

Some rough values from people I know who work/worked in self-deployment as software developers reach from 45€/hour up to about 100€/hour.

A very important note at the end - I only consider switching, if my new salary would be significantly higher than my current, since I enjoy my current working place.

So when being asked how much I want to earn, I'd better come up with a good number.

Answer 1

Normally a good rule of thumb is to triple your day rate as an employee when going self employed if your committing to a long contract of a year or more you could reduce this a bit.

Pseudo self employed - This worries me in many countries the tax authorities see this as disguised employment and treat it as tax evasion. You would need to check carefully with a lawyer that you aren't going to get into trouble

Answer 2

First, as the other answer said too, be "very" careful if this is allowed. Probably it isn't - if a client is so important that the companies existance depends it, it is a good hint that you're really being an employee, not a consultant.
And other than fines, it might happen that the company must retrospectively pay taxes etc. for you without you getting back the same taxes (meaning, paid two times). This can hurt much more than the fine.

Anyways, some stuff about taxes etc. (very rough estimation, and many small things not mentioned at all):

Currently, you have 52000 per year on your payslip as "gross" (not really) salary, which makes about 3700 14 times. After insurance and Lst tax, this might be eg. 34000, ie. 2350 14 times (nice - there are more and more web developers getting maybe half of it).
However, because many people are just not aware of it, this "gross" isn't really gross - the employer has additional costs which are hidden to you, namely your insurance again (about half, while you see just the other half), and some other taxes and fees. Including this, your gross salary is more like 68000. If you are self-employed, you've to care about this previously hidden part too.

Since you want "significantly" more, how about 2700 instead of 2350 - this would be instead 81000 instead of 68000 gross-gross per year.

Then ... while Lst and insurance calculation are not that different between self-employed and not, there is also the Umsatzsteuer, 20%. Makes 97000.

Since this is yearly, the missing 13+14 month are already in there. Not in there are the missing 25 vacation days, and average 13 (?) sick days. Since without weekends, national holidays, etc., there are about 245 days per year, this 38 days are about 15% which you get not paid anymore as self-employer person. This added makes 112000.

Some random small fees collectively considered with 6% (house number, may vary), 119000.

(Already more than double, compared to your payslip gross value).

To this, add tax consultant, legal expense insurance, costs for computer stuff (hardware, software, server rent, redundant backups, etc.etc.), and of course office space (including rent, cleaning, furniture, electrity, garbage fee, etc.etc. - all of this is also relevant for home office, just not directly on an separate invoice. Also multiply this part with ca. 1.1 because tax details).

What you have now would be what you need/want per year - however, you're not earning money for 8 hours a day over the whole year. The last big point is, enough overhead on your hourly rate to live through times without work as well as non-billable work.