hTTi

Hello friends,

this is my first post here after closing the TT Forum.

So, this is my situation.
I am a software engineer at a company where I have worked for more than five years, but I also develop my own projects in my free time at home. I am interested in monetizing these projects as a side job. My employer found out about this because I was transparent and explained that software development is also my hobby, and that I will not stop developing and publishing my projects online. Due to company policy, I am not allowed to work as a freelancer, and I don't want to risk hiding that fact. Therefore, I am focusing only on my SaaS (Software as a Service) projects, where I can earn money from subscriptions

My question is:
To stay compliant, should I establish a formal business structure or can I simply pay additional tax on my extra earnings? Currently, I am in Tax Group 4 because my wife is also working, and our incomes are quite similar. Should I change my tax group, or should I request a new tax number for a different group?


Thanks

This will depend entirely on your contract with your employer.
Whatever legal construct you trade under, you will be performing work for it, and if your contract forbids that then you are on shaky ground.
I would try to talk to a lawyer first.

When talking about this idea, also make sure that you actually own any IP you produce whilst working for your current employer. Some employment contracts insist that anything you create in a field related to your employment belongs to your employer. I don't know if such clauses are common or even enforceable here in Germany, but it's better to know for sure.

I know a lawyers consultation can be expensive, but if this side gig can't recover those costs then it's probably not even worth considering risking your job over.

Hi pappnase,

My contract with my employer is similar to every other contract that prohibits working for others. However, as I mentioned earlier, my employer is aware that I am working on a personal side project and that I will not stop, as it is also my hobby. I am not working for others, so I am working further on this project. My question is simply how I should pay taxes when I start receiving earnings.
My ultimate goal is to register an UG under my wife's name because she is not in the IT field and it does not conflict with her contract. However, at the beginning, I need to understand how to handle taxes if I earn any income.

Thanks

To the OP: Even that the following link is in German, it might be worth to throw that - block by block - into DEEPL... I believe that a hell of a lot of your questions are answered...

https://www.ihk-muenchen.de/de/Service/ ... tstaendig/