A New Life in Germany: Balancing Work and Study – Student contracts
Studying is a full time job, but that does not necessarily mean that it should stop you from earning an income. When looking for a job in Germany, a student must be aware that there are multiple forms of contracts, each with their own benefits and restrictions.
Although the Mini-job contract is highly popular with students, you are by no means required to be a student to obtain this type of contract. Mini-jobs or minor employment (also known as 450-Euro-Jobs or geringfügige Beschäftigung) are a type of contract that restrict you from earning no more than €450 per-month. Under German law, this type of contract allows a business to be exempt from paying health insurance, and also has an ability to opt out of otherwise compulsory pension contributions, though business has to specifically ask you if you would like pension scheme contributions to be made or not.
Note: You are allowed to have several mini-job contracts, but you must inform each of your employers, and the total income from these contracts must not exceed €450 in total. If the Mini-job is your sole source of income, then you will fall well under the minimum tax bracket.
The Werkstudent contract is available for student trainees who work for an employer and earn more than €450 per hour. With this particular type of contract, neither the student nor the employer pay contributions to healthcare (unless you are with a family insurance in Germany) and unemployment insurance schemes, regardless of how high the income is for the student. Contributions to pension schemes are, however, still required. There are restrictions associated with this contract though. Students are limited to working a maximum of 20 hours per week. During semester break, there is no restriction placed on work hours and a student trainee is free to work more than 20 hours per week. For detailed information refer to Deutches Studentenwerk or DGB Jugend.
If a student on a Werkstudent contract earns below €9820 in a financial year (€8820 + €1000) then they will fall below the minimum taxable income. In this case, there are no taxes associated, however the pension payment of 9.25% is deducted from your gross income.
The part-time contract is possibly the least popular of the three main types of contracts that students use in Germany. A higher taxation rate associated with this type of contract is a detracting factor for working students. An employer is required to make all necessary contributions including Healthcare, Pension schemes and Unemployment schemes. Additionally, the student has to pay these taxes as well.
The part-time contract may have a requirement that a minimum amount of agreed upon hours must be worked by the student (rather than a maximum as seen in the previous two contract examples) and this can often conflict with the study times. Do take the time to discuss with your employer whether a Werkstudent contract may be feasible for your employer. Some employers may not be aware of the details, but it is a highly beneficial for both the employer and the employee.
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