Working as a working student can be beneficial for both the employer and the employee. While the employee gains valuable practical experience and earns an income, the employer benefits from the support of a motivated and dedicated student.

However, it’s important to understand that working as a student also has tax implications. In this article, we will explore the taxation related to working student contracts and address key questions such as how working students are taxed, what the tax-free income limits are for students, and what deductions apply for working students.

In Germany, working students are taxed similarly to other employees. Since a working student position is a form of employment, the income earned must be taxed. However, due to their typically lower income, the income tax for working students is often lower than that of other employees.

In Germany, employees who earn more than €10,908 per calendar year are required to file an income tax return. This translates to a monthly salary of approximately €909.

The amount of income tax a working student pays depends on their gross income and is calculated according to the applicable tax regulations.

In addition to income tax, the solidarity surcharge (Solidaritätszuschlag) may also be applied to the earned income. However, this surcharge is only imposed on income above a certain threshold and is currently set at 5.5% of the applicable income.

It's important to note that employers are required to automatically deduct both income tax and the solidarity surcharge from the employee's gross salary and transfer these amounts to the tax office. The employee then receives a payslip detailing the gross salary, net salary, and the taxes deducted.

Werkstudentenvertrag Kündigungsfrist: Was Sie als Arbeitgeber und Arbeitnehmer wissen sollten

If you belong to the Catholic or Protestant church in Germany, you are required to pay church tax, regardless of whether you are working as a student or in any other role. The church tax is calculated as a percentage of your income tax and typically amounts to 8-9% of the income tax you pay. For example, if you pay €10 in income tax per month, your church tax would be around €0.80 to €0.90.

It’s important to note that this is only a rough estimate, and the actual amount may vary based on several factors. If you are non-religious or do not owe income tax, you are exempt from paying church tax.

Working Student Taxes: What’s Left at the End?

Let’s assume you earn an hourly wage of €12 and work the full 20 hours per week, totaling 80 hours per month. Your monthly earnings would therefore be €960 (80 * €12).

Since in this example, you earn more than €520 but less than €2,000, a part of your income will be deducted for pension insurance (see also Working Student Contract Insurance). For €960, the deduction is approximately 8%.

At the end of the month, you would be left with around €880.

"Taxes are like a puzzle where you must always ensure that all the pieces fit in the right place. As a working student, it is especially important to have an understanding of the applicable laws and regulations to ensure you handle your taxes correctly and take advantage of all the benefits available to you." – beglaubigt.de Team

How Much Can a Working Student Earn Tax-Free in 2023?

In Germany, working students have a tax-free income threshold, which is set at €10,908 for the calendar year 2023. This means that working students do not have to pay income tax on earnings up to this limit. This annual threshold is adjusted by tax authorities to account for inflation and rising living costs.

It is important to note that this tax-free threshold should not be confused with full wage tax exemption. Even if the income is below the tax-free limit, social security contributions may still apply to working students. Therefore, even with earnings below the threshold, contributions such as pension insurance may be deducted.

If a working student earns more than the tax-free income limit, they are subject to income tax on the portion that exceeds the threshold. The amount of income tax depends on various factors such as income level, number of children, and marital status.

Additionally, for incomes exceeding the tax-free limit, deductions for social security contributions and income tax will be necessary. These deductions can significantly reduce the net income of the working student.

There is no set income limit for how much a working student can earn, meaning that, in theory, you can earn an unlimited amount. However, a higher income can affect your social security and tax obligations. (See also our article on Working Student Contract Insurance)

If a working student’s income exceeds the annual tax-free income limit of €10,908, that income will generally be taxed at the full rate. Additionally, social security contributions must be paid on the entire income, even if it exceeds the tax-free threshold.

For higher earnings, it is advisable to carefully calculate your potential taxes and contributions to understand how much of your income is actually tax-free and what your tax obligations are. Consulting with a tax advisor or tax office can be very helpful in this case.

A working student works 20 hours per week while studying and earns €1,000 per month.This results in an annual income of €12,000 (€1,000 x 12 months).Since this income exceeds the tax-free threshold of €10,908, the student would need to pay income tax and social security contributions on the amount exceeding the limit.

Regardless of income, working students are entitled to paid vacation. For more information on vacation calculations, refer to Working Student Contract Vacation.

What is Deducted from a Working Student's Income?

When a working student earns taxable income, taxes and social security contributions are automatically deducted.

Employers are required to deduct a portion of the salary as income tax and transfer it to the tax office (Finanzamt). The amount of income tax depends on several factors, including income level, number of children, and other deductible amounts.

A portion of the income is also deducted for social security contributions, including health insurance, pension insurance, and unemployment insurance. These contributions are shared between the employee and the employer.

A working student earns €1,000 per month.

From this, approximately €180 is deducted as income tax.

Around €140 is deducted for social security contributions.

In the end, the working student receives a net salary of €680.

What Happens If a Working Student Earns More Than €10,908?

If a working student earns more than €10,908 in a year, they are required to report this income in their annual income tax return. This means they may need to adjust the taxes already deducted by the employer and possibly pay additional taxes.

A working student who earns more than €10,908 falls into the progressive income tax bracket, meaning that the higher the income, the higher the tax rate applied to that income.

It’s important to note that a working student's taxable income isn't limited to wages from employment but can also include other sources of income, such as rental income, the sale of assets, or capital gains.

What Happens if a Student Works More Than 20 Hours a Week?

Working more than a certain number of hours can impact study support programs like BAföG. Many of these programs have limits on how much students can work while studying. If these limits are exceeded, students may face a reduction or even loss of financial support.

It's important to note that the type of work matters. Working student positions (Werkstudententätigkeiten) are generally exempt from strict working hour regulations since they are designed to be undertaken alongside studies. However, other types of jobs, such as minijobs or internships, may be subject to stricter limits on working hours, which could affect eligibility for financial aid.

6 Tips for Employers Regarding Working Student Contracts & Taxes

Monitor Working Hours Regularly: Employers should regularly track and document the working hours of their working students to ensure compliance with labor laws.

Understand Tax Obligations for Working Students: Employers need to be aware of their working students' tax obligations and ensure that the appropriate deductions are made on the payroll.

Choose the Correct Tax Class: Selecting the right tax class for working students is crucial to ensure that the correct amount of taxes is calculated and withheld.

Review Wages Regularly: Since working students have a tax-free income limit, it’s important to periodically review their wages to ensure they stay within the allowable range.

Make all necessary deductions correctly: To ensure that tax obligations are properly fulfilled, all necessary deductions such as social security and church taxes (see also leaving the church) should be accurately calculated and withheld.

Employers should keep notice periods for working student contracts in mind when drafting the contract.

When Does It Make Sense for Students to Accept a Working Student Contract from a Tax Perspective?

Whether it makes sense for students to take on a working student contract depends on several factors, including expected income, monthly financial needs, and any other sources of income.

A key factor is the tax-free income limit for students, which is €10,908 per year (as of January 2023). If a student's expected income is below this limit, accepting a working student contract can be tax-efficient, as little to no income tax will be due. In this case, the student can maximize their earnings without facing significant tax deductions.

If the expected income exceeds the tax-free limit, income tax will need to be paid. In this scenario, students should carefully calculate whether it still makes financial sense to take on a working student contract or if another type of job might be more tax-efficient.

Social Security Contributions, Another important factor to consider is social security contributions, which are mandatory for working students who earn above certain thresholds. These contributions are split between the employer and the student and go towards systems like pension insurance, health insurance, unemployment insurance, and long-term care insurance.

The employer must contribute approximately 15% of the student's gross salary to social security funds. In this case, the employer would pay around €150.

The working student also contributes to social security, which reduces their net income.

Everything you need to know about taxation for working students:✓ Tax allowances starting January 2023,✓ What happens if you exceed the threshold,✓ Working student contract taxation,✓ Church tax for working students, and much more.

Working Student Contract Taxes: Allowances, Taxation & Template (2025)

Working as a working student can be beneficial for both the employer and the employee. While the employee gains practical experience and earns money, the employer benefits from the support of a motivated and committed student.

Working Student Contract Taxes: Tax Allowances, Taxation & Template (2025)

The advance healthcare directive is an essential document through which individuals can specify how they wish to be treated in certain medical situations. But under what circumstances does this document remain valid, and when might its validity be questioned?

In this article, we provide you with a comprehensive guide on the validity of advance healthcare directives. You'll find detailed information on the criteria that determine the effectiveness of a directive, special circumstances such as cognitive impairment or being in a medically induced coma, and the formal requirements that should be followed when drafting such a directive.

For basic explanations on advance healthcare directives, this article can serve as a foundation: What is an advance healthcare directive?

Requirements for the Effectiveness of an Advance Healthcare Directive

To be valid, an advance healthcare directive must meet certain requirements. Below is a summary of the key points:

Written form and personal signature: A verbal declaration or mere expression of will is not sufficient. The directive must be in writing and personally signed by the author.

Legal adulthood and decision-making capacity: The author must be of legal age and capable of understanding the consequences of their decisions at the time of drafting the directive.

Clear wording: The directive should be clearly worded and include specific instructions for situations where the author is unable to make decisions.

Regular review: The directive should be reviewed regularly and updated as necessary to ensure it reflects the author’s current wishes and preferences.

Informing family and close persons: It is advisable to inform family and close individuals about the existence and contents of the directive to ensure clarity in an emergency.

Durable power of attorney for healthcare: An advance healthcare directive can also be used in conjunction with a durable power of attorney for healthcare to ensure that the author’s wishes are respected, even when they are no longer able to make decisions themselves.

The requirements for the validity of an advance healthcare directive are indeed diverse and should be carefully observed to ensure a legally binding decision can be made in an emergency. These points are also anchored in various laws and regulations, such as the Advance Healthcare Directive Act (§ 2 Abs. 1) and the Civil Code (§ 1901a).

When Does an Advance Healthcare Directive Take Effect?

An advance healthcare directive generally comes into effect when the individual is no longer capable of making their own decisions. This can occur in cases of severe illness, disability, or advanced age. It is important that the person was capable of making decisions freely and understood the implications of those decisions at the time the directive was created.

Another requirement for the validity of an advance directive is that it must be clearly and specifically worded. It should be evident which medical treatments are desired or refused. Vague language or general statements may lead to interpretation difficulties in an emergency, hindering the implementation of the directive.

Additionally, the directive must be presented in its original form, signed by the individual. A copy or an electronic version is not sufficient. An advance directive can also be drafted by another person on behalf of the individual, but this person must be expressly authorized, and the directive must be signed in the presence of the individual.

It is advisable to review and update the directive regularly. Changes in personal or health circumstances may result in the original directive no longer reflecting the individual’s current wishes. Regular review and updates help ensure that the directive is carried out when needed.

Overall, it is crucial that an advance healthcare directive is clearly and specifically worded, exists in its original form, and is personally signed by the affected individual.

Additionally, the directive should be regularly reviewed and updated if necessary to ensure that it continues to reflect the individual’s current wishes and preferences. Only in this way can it be guaranteed that, in the event of an emergency, the individual’s desires regarding medical treatment will actually be carried out. (Counterexample: Who decides if there is no advance healthcare directive?)

How Long is an Advance Healthcare Directive Valid?

The duration of validity for an advance healthcare directive depends on several factors. There is no legal time limit for its validity. The directive remains valid as long as the decisions reflect the individual’s will and have not been revoked or altered.

However, it is important to note that an advance directive may become invalid if it no longer aligns with current medical standards. In such cases, doctors are not bound by decisions based on outdated instructions.

For instance, a term like "life-sustaining measures" might be unclear and subject to varying interpretations.

Experts recommend reviewing and updating an advance directive every two to three years to account for changes in personal values or medical advancements.

No legal time limit for the directive’s validity.

The directive remains valid as long as it reflects the individual's will and has not been revoked or altered.

Outdated language may render the directive invalid.

Regular review and updates are recommended every 2-3 years.

Platform Suggestion: Beglaubigt.de provides services for issuing legally valid documents.

A person drafts an advance healthcare directive at the age of 40, stating that in the event of an incurable disease, no life-prolonging measures should be taken. At the age of 60, the person is diagnosed with a severe cancer.

Since the decisions made in the advance healthcare directive still reflect the individual’s will and have not been revoked or altered, the directive remains valid and binding in this case.

How Long is an Advance Directive Valid with a Clear Health Condition?

When the person who created the advance directive is in a clear and healthy state, the directive is typically not applicable. An advance healthcare directive only becomes relevant when the author is no longer able to make independent decisions about their medical treatment due to a serious illness or injury.

In a clear state of health, the person can make their own decisions regarding medical care, so the need for an advance directive is unnecessary at that moment.

When a person is in a clear and healthy state, they can make their own decisions regarding medical care, which means there is no immediate need for an advance directive.

However, such a directive should be created when the person believes they might no longer be able to make independent decisions due to illness or injury. It is advisable to prepare early, as complications can arise in emergencies (see: Who decides if there is no advance directive).

Importantly, an advance directive remains valid even if the person recovers and regains the ability to make decisions. As long as the directive has not been revoked or altered, it remains binding and must be followed by healthcare professionals if the person again faces a situation where they are unable to make decisions.

How Often Should an Advance Healthcare Directive Be Updated?

An advance healthcare directive should be reviewed and, if necessary, updated regularly. There are several reasons that warrant a revision:

Experts often recommend reviewing the directive every two to five years. Significant life changes may warrant an earlier review. After each revision, the updated version should be shared with relevant parties. Beglaubigt.de provides a tool that generates an advance directive in PDF and WORD format and stores it online (Advance Directive PDF).

Effect Upon Onset of a Specific Illness or Deterioration of Condition

The Federal Court of Justice (BGH) ruled on March 17, 2010 (Az: XII ZB 189/09) that an advance healthcare directive is no longer binding if the condition or health status of the affected person has changed in a way that was not anticipated in the directive. This occurs when the patient’s situation differs from what was described in the directive, making it no longer applicable.

For example, a directive might state that life-sustaining measures are to be refused if the person is terminally ill and in an irreversible condition. However, if the health of the person improves and there is a chance of recovery, the directive would no longer be in effect.

In such cases, the attending physicians must act based on the current situation and cannot rely on the advance directive.

This is why it is important for an advance healthcare directive to be as specific and precise as possible. Regular reviews and updates are also necessary to ensure its continued relevance even if the person's health condition changes.

Revisiting and Redrafting the Advance Healthcare Directive: How Beglaubigt.de Provides a Solution

It is crucial that an advance directive is not simply created and then forgotten. Regular review and, if necessary, redrafting are advisable, as health conditions and personal preferences may change over time.

However, it is also important that any review and redrafting of the advance directive occur while the person is in a clear mental state to ensure its validity is not compromised. The Beglaubigt.de online platform offers a practical solution to ensure the validity and availability of the advance directive.

With digital storage on the platform, the advance directive is accessible at any time and protected against loss. Additionally, the documents are stored in a secure and privacy-compliant environment on the platform, ensuring legal bindingness and confidentiality.

When Does an Advance Directive Become Invalid?

The validity of an advance directive can be questioned for several reasons:

Medical Standards: An advance directive may lose its validity if it no longer aligns with current medical guidelines and standards. For instance, outdated or vague phrases like "life-extending measures" could create ambiguities. A well-known case before the Federal Court of Justice showed that an overly general advance directive may be considered non-binding.


Change in Individual Will: An advance directive reflects the author’s wishes at a specific time. If the person changes their mind over time and the directive is not updated accordingly, it may lose its relevance and thus its validity.

Revocation of the Advance Directive: The author has the right to revoke the advance directive at any time. An explicit revocation renders the directive invalid, and it loses its effect.

Legal Requirements: In certain jurisdictions, such as Germany, advance directives must meet specific formal and substantive requirements to be legally binding. A directive that fails to meet these requirements can be declared invalid.

Timeliness of the Directive: With the dynamic development in medicine and evolving personal beliefs, an advance directive should be regularly reviewed for its relevance. If it no longer reflects the current values or informed will of the author, its validity may be compromised.

Revoking an advance directive is generally straightforward, as most countries, including Germany, do not impose specific formal requirements for revocation. However, following a few steps can ensure the revocation is effective and recognized:

Written Revocation: While many legal systems do not require a written form, it is advisable to revoke the directive in writing. This provides clear evidence that the directive has been revoked.

Clarity: The revocation should be clear and unambiguous. A simple statement like "I hereby revoke my advance directive dated [date]" is typically sufficient.

Destroy Original and Copies: To avoid confusion, you should destroy the original and all copies of the advance directive once it has been revoked.

Notify Relevant Parties: Inform anyone who has a copy of your advance directive or is aware of its existence, including doctors, hospitals, family members, appointed representatives, or legal professionals.

New Directive: If you wish to create a new advance directive, ensure it is clearly differentiated from the old one and may even explicitly refer to the revocation of the previous directive.

Documentation: It can be helpful to document the revocation and destruction of the old advance directive to prevent future misunderstandings.

Important Jurisprudence and Laws Regarding the Validity of Advance Directives

The validity of advance directives is an important topic in patient law. There are numerous court rulings and laws that address this issue. Below are five important rulings and laws that regulate the validity of advance directives and are of significant practical importance.

Advance Directive Act (Patientenverfügungsgesetz - PatVG): The PatVG regulates the conditions and effectiveness of advance directives in Germany. It defines, among other things, what content a valid advance directive must include and under what circumstances it comes into effect.

Decision of the Federal Court of Justice from September 17, 2014 (Az. XII ZB 61/14): The Federal Court of Justice ruled that an advance directive is also valid if the patient does not explicitly prohibit treatment in certain medical situations but only expresses their general will.

Decision of the Federal Court of Justice from July 6, 2016 (Az. XII ZB 61/16): In this case, the Federal Court of Justice decided that an advance directive is only valid if it contains specific instructions for dealing with particular medical situations. A mere general rejection of life-sustaining measures is therefore insufficient.

§ 1901a BGB: This provision of the Civil Code regulates the requirements for the effectiveness of advance directives. It states, among other things, that an advance directive must be in writing and signed by the author in their own handwriting.

Decision of the Higher Regional Court Hamm from September 27, 2011 (Az. I-8 W 72/11): The Higher Regional Court Hamm ruled that an advance directive is invalid if it is not clearly formulated enough to provide the treating physicians with unambiguous instructions for action. In this case, the doctors had carried out a life-sustaining measure despite the patient having rejected such a measure in her directive. However, the court found that the directive was poorly formulated and thus had no binding effect.


Recommendations from Associations and Organizations

Various associations and organizations recommend that patients review their advance directives every few years to ensure that they still reflect their wishes. Changes in the medical field and legislation may also necessitate an update of an advance directive.

For instance, the church office of the EKD (Evangelical Church in Germany) addresses this concerning Christian advance directives.

Everything You Need to Know About the Validity of Advance Directives: From Proper Drafting to Special Circumstances. Educate Yourself Now and Take Precautions.

How Long is an Advance Directive Valid: Requirements, Examples & Jurisprudence

An advance healthcare directive is an important tool to enable self-determined decisions about one’s medical care. But how long is such a directive actually valid?

How long is an advance healthcare directive valid: §§ Requirements, Examples & Case Law

Why the UG is an Attractive Legal Form for Founders – The Dream of Your Own Company

The entrepreneurial company (UG), also known as "mini GmbH," has experienced a boom in recent years and has established itself as a popular legal form for startups in Germany. But what makes the UG so attractive, and how does it differ from other company forms?

Low Capital Requirements: Unlike the classic GmbH, which requires a minimum share capital of €25,000, you can establish a UG with just €1. This significantly lowers the entry barrier for founders with limited budgets, allowing them to realize their business ideas without substantial financial burden. This low capital requirement makes the UG particularly appealing for young founders, startups, and small businesses.

Limited Liability: Similar to the GmbH, the UG limits liability to the company’s assets. Your personal assets remain untouched, providing a high level of security and minimizing financial risk. This means that in the event of insolvency or legal disputes, you are not personally liable with your private wealth. This safety net is a crucial factor for many founders when choosing a legal form.

Flexibility: The UG offers high flexibility in structuring the articles of association and the company. You can largely design the UG according to your individual needs and preferences, allowing you to tailor it to your specific business activities.


Image and Growth Potential: Despite the lower minimum share capital, the UG enjoys a reputable image as a capital company among clients and business partners. It is often perceived as the "little brother" of the GmbH, exuding professionalism and trustworthiness. Additionally, the UG can later be converted into a GmbH as the company grows and more capital becomes available, allowing for gradual expansion and adaptation of the legal form to meet evolving needs.


Tax Advantages: Under certain conditions, the UG may be exempt from trade tax, significantly reducing the tax burden and increasing the company’s profitability. This is particularly beneficial for young companies in the startup phase, as they can reinvest their profits into business growth rather than paying taxes.

Now that you understand the advantages of the UG as a legal form, let’s take a look at the concrete formation process. Don’t worry; we will guide you through every step and make the bureaucratic jungle manageable.

If you want to learn more about how to form a UG, you might find this article interesting: UG Formation Checklist.

Another interesting topic could be: When It Is Worth Forming a UG.

The UG Formation: A Step-by-Step Guide Through the Bureaucratic Jungle

While establishing a UG requires navigating some bureaucratic hurdles, it can be successfully managed with the right guidance. We will take you by the hand and guide you step by step through the entire formation process:

Create a Business Plan: A well-thought-out business plan is the foundation for a successful company formation. It helps you clarify your business idea, define your target audience, develop your marketing strategy, and create your financial plan. The business plan is not only an important tool for you but also significant for potential investors and lenders. You should detail the following points in your business plan:


The articles of association are the heart of your UG. This contract outlines all important aspects of your UG, such as:Company name,Registered office,Business purpose,Share capital and shareholder contributions,Rules for decision-making,Rights and obligations of shareholders,Distribution of profits.You can either use a template or seek individual advice from a lawyer to create articles of association tailored to your needs. For more complex business models or if there are multiple shareholders, individual consultation with a lawyer is recommended.

Notarization: The articles of association must be notarized by a notary. The notary checks the contract for legality and advises you on all legal questions. They are also responsible for registering your UG with the commercial register. Notarization is legally required and serves to protect all parties involved.

Open a Business Account & Deposit Share Capital: Open a business account for your UG and deposit the share capital. Even though the minimum share capital is only €1, you should plan for a realistic startup capital to finance your company’s initial phase.

Commercial Register Registration: The notary will register your UG with the commercial register. After registration, you will receive a commercial register number, which must be included on all business documents. The registration is the official step to establish your UG as a legal entity. This process can be conducted online with us via this link: Online Certification of Commercial Register Registrations.

Apply for a Tax Number: Register your business with the tax office and apply for a tax number. You will need this to collect VAT and issue invoices. The registration is typically informal and can be done in person, by mail, or online.

Additional Formalities: Depending on your industry and business model, further registrations or permits may be required, such as registration in the trade register or obtaining a restaurant license. Make sure to inform yourself in advance with the relevant authorities about any additional steps necessary for your business.

UG Formation Costs: A Detailed Overview – From Notary to Marketing

The formation costs of a UG consist of various components. It is important to realistically assess and budget these costs in advance to avoid financial surprises.

Notary Fees: The notary fees are legally regulated and depend on the Courts and Notaries Cost Act (GNotKG). They vary based on the amount of share capital and the complexity of the articles of association. For a UG with minimal share capital, they typically range from €200 to €500. However, costs can be higher for more complex articles or a larger share capital.

Court Fees: Court fees for registration in the commercial register are defined in the Justice Administration Cost Act (JVKostG). For a UG, these usually amount to around €150.

Consultation Fees: Legal and tax consultation is not mandatory but can be very helpful in avoiding mistakes and accelerating the formation process. Costs vary depending on the extent of the consultation and the experience of the advisor.

Other Costs: These include costs for opening a business account (potential account management fees), business registration with the municipality (approximately €20-60), and any licenses and permits that may be required based on the industry and business model. For example, specific activities, such as operating a restaurant or a craft business, may require additional permits.

Rent: Costs for office or business premises vary greatly depending on location, size, and facilities. In large cities, rents are generally higher than in rural areas. The location of the property (e.g., city center or industrial area) also plays a role.

Personnel Costs: If you employ staff, you need to consider salaries, wages, social security contributions, and potentially other personnel-related costs. Personnel costs are one of the largest cost factors for many companies.

Insurance: Various insurances are important for a UG, such as business liability insurance, professional liability insurance, content insurance, etc. The costs depend on the industry and individual risk. A careful risk analysis can help select the right insurances and avoid unnecessary costs.


Let’s Take a Concrete Example for a UG Formation with a Share Capital of €6,000

Here is a detailed cost breakdown for establishing a UG (limited liability) in Munich with a share capital of €6,000 and three shareholders, excluding share capital costs:

The notary fees vary depending on the share capital and the number of shareholders. For a share capital of €6,000 and three shareholders, the notary fees can be estimated as follows:

Notarization of the articles of association: approx. €300

Registration in the commercial register: approx. €70

Certification of the shareholder list: approx. €30

Business registration in Munich: approx. €50

IHK membership: The first annual fee is often free or low, approx. €50

Tax advisor costs: Depending on need and complexity of accounting. Initial consultation and first annual statements could cost between €500 and €1,500. For a UG of this size, approximately €1,200.

Bank account opening: Some banks charge fees for business accounts. Monthly costs can be about €10-30. Assuming around €20 monthly, that’s €240 annually.

Office supplies and equipment: These costs vary greatly depending on need and are not included here.

Insurance: Liability insurance, professional liability insurance, etc., vary significantly by industry and are not included here.

UG Formation Costs: Summary of Costs (Example Calculation Without Share Capital)

Notary Fees: approx. €400 (300 + 70 + 30)

Commercial Register: approx. €200 (150 + 50)

Tax Advisor Costs: approx. €1,200 (for the first year)

Bank Account Opening: approx. €240 (annually)

Total Costs (Example): approx. €2,140. This calculation serves as a rough estimate and can vary based on individual circumstances and regional differences.

New: We support you throughout the entire process of forming your UG: Start easily here.

Cost-Saving Tips for Founders: Save Money When Forming a UG

Forming a UG can be costly, but there are several ways to reduce expenses:

Model Protocol: Use a model protocol for the articles of association to save on notary fees. Many free templates are available online that you can adapt to your needs. Ensure that the model protocol meets your individual requirements and covers all important points. When in doubt, consult a lawyer.

Virtual Office: If you do not need a physical office, you can save on rental costs with a virtual office. A virtual office provides you with a business address, phone service, and mail handling without the need to rent physical premises.

Founder Grant: Check if you are eligible for the startup grant from the Employment Agency. This grant can help cover your ongoing costs in the first months after formation.

Tax Advice: Consult a tax advisor to optimize tax benefits and avoid mistakes in your tax return. A tax advisor can also help you organize your accounting efficiently and save costs.

Free Resources: Utilize free resources such as online tools, templates, and guides to reduce your costs. Many helpful offers are available online to assist you in forming and running your UG.

Self-Service: Take on tasks that you can complete without special knowledge or qualifications, such as creating a website or marketing.

Comparisons: Compare prices for office supplies, insurance, software, etc., to find the best deal.

Network: Use your network to get recommendations for affordable service providers or to seek tips and advice from other founders.

With these cost-saving tips, you can significantly reduce your formation costs and successfully launch your UG. However, in addition to the financial aspects, it is also important to be aware of the legal foundations.

Legal Foundations: The GmbH Act (§ 5a GmbHG) – The Basis of Your UG

The UG (limited liability) is a special form of GmbH and is subject to the regulations of the GmbH Act (GmbHG), particularly § 5a GmbHG. Here are the key points:

Minimum Share Capital: €1. This is a significant advantage compared to the GmbH, which requires a minimum share capital of €25,000.

Articles of Association: Must be notarized. The articles of association are the central document of the UG and regulate all important aspects of the company formation.

Managing Director: At least one managing director, who does not necessarily have to be a shareholder. The managing director represents the UG externally and manages the business.

Reserve Formation: The UG must allocate 25% of its annual surplus to a reserve until the share capital of a GmbH (€25,000) is reached. This reserve strengthens the equity base and can later be used for investments or for conversion into a GmbH.

Liability: The liability of shareholders is limited to their contributions. This means that in the event of insolvency or legal disputes, they only have to bear liability up to the amount of their contributions.

Company Name: The name must include "Unternehmergesellschaft (haftungsbeschränkt)" or "UG (haftungsbeschränkt)." This ensures clarity and transparency for customers and business partners.

UG vs. GmbH: Advantages and Disadvantages in Comparison – Which Legal Form Is Right for You?

Establishing a limited liability entrepreneurial company (UG) is an attractive option for many entrepreneurs in Germany to implement their business ideas with limited liability risk. This legal form is increasingly popular due to its flexibility and relatively low startup costs. The UG can be viewed as a type of "mini GmbH," requiring only a share capital of one euro for its establishment. This low required capital makes the UG particularly appealing for startups and small business owners. However, the decision to form a UG should not be made solely based on the low entry barriers. A comprehensive examination of the formation costs, ongoing expenses, and legal framework is essential to ensure sustainable business success.

Beglaubigt.de Blog