Here’s the deal
- Holding a trade licence does not automatically mean that the work performed is self-employed.
- Genuine self-employment requires having multiple clients, setting your own prices and using your own equipment, and working without instructions from the client.
- If a cleaner works exclusively for you on a regular basis and follows your instructions, this is typically considered bogus self-employment, which is effectively an employment relationship.
- The risk lies with the client: bogus self-employment can lead to retroactive social security contributions.
- There are two clear options: hire the worker directly (mini-job) or engage a genuine service provider who invoices you for their work.
"She's self-employed, she handles the rest herself." Many people hope this sentence will help them avoid all the paperwork. It rarely works, because the tax office and pension insurance don't look at the business license, but at how the working relationship actually functions. Here is how to determine when a domestic worker is truly self-employed and when you are better off hiring them as an employee.
Can a domestic helper actually be self-employed?
Yes, but only under certain conditions. A person can clean or help around the house as a self-employed service provider if they have registered a business and are genuinely operating as one. A business license is a prerequisite, but it does not automatically make the work self-employed.
What matters is how the work is performed in practice. This is exactly where the problem lies with a typical domestic cleaner, as the working relationship usually looks more like employment.
How do I recognize genuine self-employment?
By several characteristics that, taken together, form a business profile. Genuine self-employment is indicated if your domestic worker:
- works for several clients and is not economically dependent on you
- sets their own prices and issues invoices
- brings their own equipment, such as cleaning machines and supplies
- decides for themselves when and how to perform the work, without receiving specific instructions from you
- presents themselves to the public as an independent business
If the opposite is true—meaning they work only for you, at fixed times, and according to your instructions—they are integrated into your routines just like an employee. In that case, it is legally an employment relationship, regardless of any business license.
What is bogus self-employment and why is it my problem?
Bogus self-employment exists when someone formally appears to be self-employed but actually works like an employee. Whether an employment relationship exists is determined by § 7 SGB IV, primarily based on the degree of instruction and integration into someone else's operations. Having only a single client is a typical indicator.
The unpleasant part: the risk lies with the client—that is, with you. If the German pension insurance determines that an employment relationship exists, you are retroactively considered the employer and must pay backdated social security contributions. The criteria for bogus self-employment that apply here are well documented. Consequently, the supposedly simple solution can turn into an expensive ordeal.
Hire as an employee or engage as a contractor—which fits my situation?
For a private household, there are two clear paths, and which one is right for you depends on how the helper works:
- Employment: If the same person comes to you regularly and follows your instructions, you are their employer, usually under a mini-job arrangement. You register the job and pay the contributions. How that works is explained in the blog post Hiring a domestic helper, and the difference between the types of employment is explained in the article Mini-job or midi-job.
- Contracting: If you book a genuine service provider with their own business or a cleaning company that works for many clients, you are contracting a service. You receive an invoice and have nothing to do with registration or contributions; the provider handles that themselves.
The most common mistake is treating the first situation like the second. If your domestic worker is effectively an employee, a business license won't help.
Do I get the tax rebate with a self-employed helper too?
Yes. The tax benefit under § 35a applies in both cases. If you contract a self-employed service provider or a company, you can deduct 20% of the costs from your taxes as a household-related service. The condition is that you have an invoice and pay by bank transfer, not in cash. The details and maximum amounts are in the post Tax rebate for household help.
Whether you have to register or not depends solely on whether an employment relationship exists. More on this in the article Registration requirement for domestic help.
What does quitt take care of for me?
quitt is an app-based service for when employment is the right path, which is the standard for a regular domestic worker. You enter the key details, and quitt takes over registration, payroll, contributions, and insurance. That keeps you on the safe side and ensures you don't have to worry about bogus self-employment.
You remain the employer throughout and decide who you hire and what you pay. quitt handles the work behind the scenes.
Found a household helper? Start the registration and quitt takes care of the rest. You can see what the service costs on the pricing page.
On the safe side instead of bogus self-employment
If your domestic worker is effectively employed, quitt registers her and takes over payroll, contributions, and insurance. You stay the employer, we do the rest.
