Hiring Employees as a Freelancer in Germany 2026: Full Guide

Your order book is full, the requests keep coming, and you simply cannot do it all alone anymore. The logical next step: hire someone. But the moment you go from freelancer to employer in Germany, obligations land on your desk that you never had as a solo operator.

The good news: hiring employees is not a privilege reserved for GmbHs. As a sole proprietor or freelancer you may employ staff too, without changing your legal form. All you need is a Betriebsnummer (employer number), the right registrations, and clean payroll records.

In this guide we walk through it step by step: which registrations you need, what an employee really costs you in 2026, how wage tax and social security work, and when a minijob or a contract with another self-employed person is the smarter choice.

In a nutshell

• You may hire as a freelancer: no GmbH required. Your legal form stays the same; only payroll is added.
• Betriebsnummer first. Without this eight-digit number from the Federal Employment Agency you cannot register anyone. It is free and usually arrives within about three business days.
• Three registrations: the health insurer (collection point for social security, via the DEÜV procedure), the Berufsgenossenschaft (accident insurance, within one week), and recurring wage tax returns to the tax office.
• Rule of thumb for cost: gross salary plus around 21 % employer contributions. A €3,000 gross salary becomes roughly €3,630 in employer cost per month.
• Minimum wage 2026: €13.90 per hour (rising to €14.60 in 2027). Minijob threshold: €603 per month (€7,236 per year).
• Freelancers, take note: you must stay in a leading and self-responsible role (§ 18 EStG), otherwise your income can be reclassified as commercial, and trade tax applies.

From solo operator to employer: what changes

As a freelancer you have so far been accountable only to yourself. With your first employee you become an employer, and that means reporting, payment, and documentation duties toward several bodies at once: the Federal Employment Agency (Bundesagentur für Arbeit), your employee's health insurer, the trade accident insurer (Berufsgenossenschaft), and the tax office.

Crucially, your legal form stays the same. A freelancer remains a freelancer; a trader remains a trader. You don't have to form a GmbH just because you take on staff. The only thing that changes is payroll: a new, recurring monthly process.

The freelancer trap: stay leading and self-responsible

Freelancers face a special condition that traders do not. Under § 18 (1) EStG you may employ professionally qualified staff and still remain a freelancer, as long as you personally stay in a leading and self-responsible role. You must carry the professional responsibility, shape the work substantially, and not merely manage a team of specialists who deliver the actual service.

If you slip into pure organisation and let employees handle the professional work entirely, the tax office can reclassify your income as commercial. The consequence: you become liable for trade tax. Where the line between a liberal profession and a trade runs is explained in our piece on freelancer vs. trader; what the added burden looks like is covered in the guide to trade tax. Traders are not subject to this restriction; they may hire staff without limit.

Step 1: Apply for a Betriebsnummer

Without a Betriebsnummer (employer number) you cannot register an employee. This eight-digit number identifies your business to the social security system. You apply for it free of charge from the Betriebsnummern-Service of the Federal Employment Agency, online or by phone, and usually receive it within about three business days.

You need the Betriebsnummer for every single social security report. So apply for it before your employee's first working day.

Step 2: Register your employee

Once the Betriebsnummer is in place, you register your employee with three bodies:

In some higher-risk sectors (construction, hospitality, building cleaning, freight) an immediate report (Sofortmeldung) is added: it must be filed no later than the start of employment, i.e. before the first working day. In all other sectors the standard DEÜV registration with the first payroll run is enough.

What does an employee really cost you?

Gross salary is only half the story. On top you pay the employer's share of social security: as a rule of thumb, around 21 % of the gross salary:

On top of that come accident insurance contributions (Berufsgenossenschaft) and the U1, U2 and U3 levies. Example: at a gross salary of €3,000, your actual employer cost is roughly €3,630 per month. Build this "employer gross" into your pricing from day one.

Also mind the statutory minimum wage: in 2026 it is €13.90 per hour, rising to €14.60 from 2027. You may not employ anyone below that.

The starter book for your self-employment

Free e-book: registration, accounting, your first invoice, and taxes, plus a tax calendar, deductions cheat sheet, and invoice template.

Email *

Company website

I want to receive the starter book and agree that Norman may send me related emails with tips and product info. Details in the privacy policy. Unsubscribe anytime. *

Get the free book

Wage tax and the monthly payroll run

You deduct wage tax from your employee's gross pay and forward it to the tax office, so it is not an extra cost for you, but a pass-through item. To do so you file a regular wage tax return (Lohnsteuer-Anmeldung). The rhythm depends on the wage tax you paid the previous year:

Each month you also produce a payslip per employee, transfer the net salary, pay social contributions and wage tax, and submit the social security reports. Done by hand, this is error-prone and time-consuming. An AI-powered bookkeeping tool helps you bring receipts, salaries, and tax filings together cleanly, much as companies handle it in GmbH payroll.

Minijob, working student or contract? Choosing the right alternative

Not every need justifies a full-time, contribution-liable position. Four alternatives are often worth it:

• Minijob: Up to €603 per month (the 2026 threshold) counts as marginal employment. You pay flat-rate contributions of around 31 % to the Minijob-Zentrale, and the admin burden is lower. Our guide on registering a minijobber shows exactly how it works.
• Working student: During term, students may work up to 20 hours per week. They are exempt from health, care and unemployment insurance; you only pay the pension share. That makes working students noticeably cheaper than regular employees.
• Work contract or freelancer assignment: You commission another self-employed person. Here you pay no social contributions, but beware false self-employment: anyone integrated like an employee is legally treated as one, and that gets expensive.
• Part-time: A part-time role gives you planning certainty without full-time fixed costs.

Frequently asked questions

How long does it take to get a Betriebsnummer?

Applied for online or by phone with the Betriebsnummern-Service of the Federal Employment Agency, the eight-digit number usually arrives within about three business days. Since you need it for every social security report, apply well before the first working day.

Do I lose my freelancer status if I have employees?

No, as long as you personally stay in a leading and self-responsible role (§ 18 EStG). You may employ professionally qualified staff. Only if you delegate the professional work entirely and merely organise does the tax office risk classifying your activity as commercial, which triggers trade tax.

What is cheaper: minijob or working student?

It depends on the need. For a minijob you pay a flat ~31 % on up to €603, at most around €187 in contributions per month, but with no cap on working hours. For a working student you pay only the pension share (9.3 %), but may employ them at most 20 hours per week during term. For regular professional support the working student is usually cheaper; for small helper tasks, the minijob.

Do I have to file a Sofortmeldung?

Only in certain higher-risk sectors: construction, hospitality, building cleaning, freight and transport. There the immediate report must be on file no later than the start of employment. In all other sectors the standard DEÜV registration with the first payroll run is enough.

How do I deregister an employee?

When the employment ends, you file a deregistration through the same DEÜV procedure with the health insurer, at the latest six weeks after the employment ends. The final payslip and the report of the gross remuneration are part of it.

Conclusion

Hiring your first employee is a big step, but not a bureaucratic monster. You need a Betriebsnummer, you register the employee with the health insurer and the Berufsgenossenschaft, you budget around 21 % employer contributions on top, and you file monthly payroll and wage tax returns. As a freelancer you also take care to stay leading and self-responsible. Before that, ask honestly whether a minijob, a working student or a contract with a self-employed person is the better entry point.

Anyone who works with clean bookkeeping for the self-employed from the start keeps salaries, receipts, and tax filings together automatically, and avoids fines from missed deadlines.