In principle, it is not necessary to register a business in order to provide domestic help. Registering as a mini-job makes correspondence easier and saves you from having to file a tax return. However, if your client does not want to register you and requests an invoice, or if you want to take on various cleaning jobs and exceed the monthly mini-job limit of € 603, you must apply for a trade licence and take care of the taxation of your turnover yourself.
When does it make sense to register on a mini-job basis?
Provided that your auxiliary work does not exceed the monthly limit of € 603 (including all special payments), your employer can register and employ you through the Minijob-Zentrale after concluding an employment contract. In this case, the employer bears the tax burden of approximately 30% in addition to the wage, and you are entitled to special payments such as holiday pay and sick pay in full. Of course, the minimum wage and protection against dismissal also apply. As an employee, you can voluntarily pay approximately 4% into the pension insurance scheme or be exempted from this. Be sure to seek advice on this matter. In addition, your employer must insure you against accidents; this does not happen automatically through the Minijob-Zentrale. An overview of the statutory accident insurance providers can be found here. However, if you exceed the € 603 limit, you will be required to pay contributions to all branches of social security.
How and where do you register a business?
However, if your employer does not want to register you on a mini-job basis and requires an invoice, you must register a business. The amount of the intended profit is irrelevant in this case. As soon as you carry out an activity regularly (normally, an activity is considered ‘regular’ from the third time it is carried out) and with the intention of making a profit, you must register a business before or at the latest at the time of the first activity. The registration takes place at the relevant trade and regulatory offices in the town hall, the citizens' office or the district office, depending on your place of residence. Find out in advance where to go and make an appointment for a consultation. It is also possible to register via an online service or to print out the registration form in advance, fill it in and submit it to the trade office together with a copy of your identity card. If you identify yourself with a passport or driving licence, you will also need to provide proof of your place of residence. The trade licence can usually be issued on the same day, but trades registered purely online can take several weeks to be processed. Please enquire about the expected waiting times at the trade department. The cost of the trade licence varies between € 15 and approximately € 60, depending on the issuing city and type.
Which trade should be registered?
When registering your trade, you must specify the exact activity you wish to carry out. Cleaning work is classified as a free trade and can be registered without having to provide proof of qualifications in advance. If you carry out various activities in the household, you do not have to declare each one as a separate trade. You can summarise all activities under umbrella terms. For example, it is advisable to declare the areas of responsibility as ‘building cleaning work in all specialist areas’ in order to cover as many activities as possible. If, on the other hand, you only specify ‘domestic services’ as your activity, you will not be allowed to carry out office cleaning work. It is also advisable to include ‘caretaker services’ and ‘domestic help activities’ in the business description so that you can also carry out activities such as hedge trimming or street cleaning. So think in advance about what activities you want to pursue so that you don't have to make changes to your business description later on – re-registering a business costs just as much as registering a business for the first time.
What do you need to bear in mind after registering your business?
After registering your business, you will receive letters from various authorities that have been notified by the trade office and will have to provide further information about your activities.
You must also submit an annual tax return. If your annual turnover is less than € 25,000, you can invoke the small business regulation and prepare a simplified tax return yourself. This means that you do not have to charge VAT (gross = net), i.e. a simple income/surplus calculation is sufficient. As a business owner, you must register all changes with the Trade Licensing Office, including if you no longer wish to carry out the business. In this case, you must deregister or register that the business is dormant, which does not incur any costs and makes it easier to reactivate the business than if you were to re-register. In any case, the deregistration and dormant status must be reported to the tax office and the Chamber of Industry and Commerce.