Short answer: As a freelancer while studying, you can use the small business exemption (Kleinunternehmerregelung) if your turnover was at most 25,000 euros in the previous year and is at most 100,000 euros in the current year. Then you do not show VAT (Umsatzsteuer) on your invoices (§ 19 UStG, last updated October 2026). Your profit is still subject to income tax.
Freelancers while studying often work on fees for several clients. Taxes, invoices and health insurance follow different rules than for employees. This guide explains the main thresholds and shows which decisions come up early on.
The most important points
- Freelance work under § 18 EStG (freie Berufe) is not a trade. Usually you do not need to register a trade with the local authority.
- The small business exemption applies if turnover is at most 25,000 euros in the previous year and at most 100,000 euros in the current year (2026).
- As a small business owner you do not show VAT on invoices and usually cannot claim input VAT.
- If you work mainly as a self-employed person, you are no longer covered by student health insurance (§ 5 para. 5 SGB V).
- Tax is based on your profit, which you calculate with an income-and-expense statement.
Are you a freelancer, a trader or both?
German tax law looks at the type of work, not at the word freelancer. People who write texts, develop software, translate or work in design often perform a freelance activity (§ 18 EStG). Services outside the freelance professions are usually a trade. Borderline cases are worth discussing with the tax office before you send your first invoice.
When does the small business exemption apply?
The small business exemption frees you from VAT. Turnover is measured without VAT. The thresholds are set out in § 19 UStG and apply to turnover within a calendar year.
| Threshold | Value | As of |
|---|---|---|
| Turnover in the previous year | at most 25,000 euros | October 2026, § 19 UStG |
| Turnover in the current year | at most 100,000 euros | October 2026, § 19 UStG |
Assumption: in 2025 you earned 18,000 euros net from writing assignments and you expect 60,000 euros for 2026. You stay below 25,000 euros in the previous year and below 100,000 euros in the current year, so the exemption applies. Assumption: in spring 2026 a large assignment brings you to 110,000 euros. Then you exceed the current-year threshold and must charge VAT from that point. The exact consequences are also set out in § 19 UStG, and a tax adviser can check your case.
What must appear on your invoice?
Small business owners also have to issue invoices. The mandatory details are listed in § 14 UStG. They usually include your name and address, your client’s name and address, a tax number or VAT ID, the issue date, a consecutive invoice number, a description of the service and the amount. As a small business owner you add a note that no VAT is charged and you do not show VAT separately.
An overview of deductions and expenses for freelancers is in Freelancing als Student (in German). If you invoice clients abroad, additional rules can apply. Ask your tax office or a tax adviser before you send the first invoice.
What changes for your health insurance?
Students are covered by the student health insurance (KVdS) as long as they are not self-employed on a main-job basis. Under § 5 para. 5 SGB V, there is no compulsory insurance as a student if you are self-employed on a main-job basis. The law presumes main-job self-employment if you regularly employ more than marginally employed people. The health insurer decides on the individual case based on scope and income. Keep a record of hours, assignments and income over the year so you can document the scope of your work if asked. More on this is in Selbstständig im Studium: Gewerbe, Steuern und Krankenversicherung (in German).
How is your profit taxed?
As a freelancer you usually calculate your profit with an income-and-expense statement (§ 4 para. 3 EStG). You set business income against business expenses. The profit is taxed together with your other income. Up to the basic allowance of 12,348 euros for 2026 (§ 32a EStG) no income tax is due.
Assumption: your profit in 2026 is 9,000 euros and you have no other income. Then it stays below the basic allowance, and no income tax is due on that amount. With a higher profit or additional income, the calculation changes.
Which expenses can you deduct?
Business expenses reduce your profit if they are incurred for business reasons (§ 4 para. 4 EStG). Typical items for freelancers while studying are:
- Software and subscriptions you need for your assignments, such as design or writing tools.
- Specialist literature, courses and training related to your field.
- Work equipment such as a computer, monitor or accessories. Expensive items are depreciated over several years, while low-value assets are often expensed at once.
- Travel to clients and a business share of phone and internet costs.
Private costs do not count. If you use a device both privately and for assignments, you need to estimate or document the business share. Keep invoices and bank statements carefully.
Do you have to register with the tax office?
Once you start working on a self-employed basis, the tax office usually asks you to fill in a questionnaire on tax registration (Fragebogen zur steuerlichen Erfassung). It asks what activity you perform and whether you want to use the small business exemption. You often complete it via ELSTER, and the office then assigns your tax number. A Bavarian tax office guide on tax registration for new self-employed people explains the procedure (Merkblatt zur steuerlichen Erfassung für Neugründer, Finanzamt Bayern, October 2023).
Frequently asked questions
Do I need to file VAT advance returns as a small business owner?
Usually not, because you do not show VAT. Whether an exception applies in your case is clarified with the tax office during registration.
Can I claim input VAT as a small business owner?
In general, no. If you use the exemption, you usually cannot reclaim the VAT on your own purchases. This can be a disadvantage if you buy expensive equipment, so check the decision before you start.
What happens if I exceed the threshold?
The exemption ends, and you must charge VAT for the period from the point at which the threshold is exceeded. The details are set out in § 19 UStG. Plan for this case so it does not surprise you.
Can I be a working student and a freelancer at the same time?
Yes. For income tax, the income from both activities is added together. For health insurance, the scope of your self-employed work is decisive, because it determines whether you are treated as self-employed on a main-job basis.
Do I need to prove my expenses one by one?
Yes, business expenses must be provable. A receipt can be an invoice, a bank statement or a till receipt. An orderly filing system saves a lot of time when questions come up.
What should you do now?
- Clarify whether your work is a trade or a freelance profession. If unsure, ask the tax office or a tax adviser.
- Record your turnover net every year so you can watch the thresholds of 25,000 and 100,000 euros.
- Issue invoices with all mandatory details and the correct note.
- Complete the tax registration questionnaire and keep an income-and-expense statement.
Related articles
- Freelancing as a student: how to start with your first projects (in German)
- Self-employed while studying: trade, taxes and health insurance (in German)
- Student Job 20-Hour Rule, Pension and Semester Breaks
- Private Health Insurance for Working Students in Germany
- ELSTER for students: registration and tax return
Sources: § 19 UStG (accessed October 2026), § 5 SGB V, § 18 EStG, § 4 EStG, Tax registration guide for new businesses, Finanzamt Bayern (October 2023).
Last updated: October 2026. This guide is general information, not individual advice.
