How much tax do I pay on my side income?

It depends on the type of side income and your main income. A Minijob up to EUR 520/month is completely tax-free for you. For all other side income, the profit is taxed at your personal marginal tax rate, which typically ranges from 14% to 42%. The higher your main salary, the higher the tax rate on your side income.

Is a Minijob tax-free?

Yes, for you as an employee, a Minijob up to EUR 520/month is completely free of taxes and social contributions. The employer pays flat-rate charges of about 30% (flat tax, pension insurance, health insurance, levies). However, you can voluntarily contribute to pension insurance to earn full pension entitlements.

Do I need to file a tax return if I have a side job?

A tax return is mandatory once your side income (excluding Minijobs) exceeds EUR 410 per year. For self-employed or rental income, filing is always required. With a second employment under tax class VI, filing almost always pays off since you frequently get back overpaid wage tax.

What is the EUR 520 Minijob limit?

The EUR 520 limit is the maximum monthly earnings for marginal employment (Minijob), equaling EUR 6,240 per year. If this limit is regularly exceeded, the employment automatically becomes subject to full social insurance. Occasional overages (maximum 2 months per year, e.g., due to covering for colleagues) are permitted.

What happens if I exceed the small business threshold?

The small business threshold is EUR 22,000 in annual revenue. If you exceed it, you must charge VAT (19% or 7%) on your invoices starting the following year and submit regular VAT advance returns. The upside: you can then also deduct input VAT from your purchases and business expenses, which reduces the net burden.

Do I have to tell my employer about my side job?

Under employment law, you are generally required to inform your employer about a side activity, especially if your employment contract includes an approval clause. Your employer may only prohibit a side job if legitimate interests are affected (e.g., competition, working time regulations). A blanket prohibition of side activities is legally invalid.

Which side income type is most tax-efficient?

A Minijob up to EUR 520/month is the most tax-efficient option since no deductions apply. For higher earnings, freelance activity is often more advantageous than employment because no social contributions are due and business expenses can be deducted directly. Use our comparison calculator to find the optimal option for your situation.

How is rental income taxed alongside a main job?

Rental income is taxed at your personal income tax rate as income from renting and leasing. However, you can deduct numerous expenses: loan interest, depreciation (typically 2% per year), maintenance costs, management fees, and property tax. Social contributions do not apply to rental income.

Do I need a trade license for my side hustle?

A trade license is only required for commercial activities (e.g., online retail, crafts, hospitality). Freelance activities such as writing, design, consulting, teaching, or art do not require a trade license. When in doubt, section 18 of the Income Tax Act (EStG) defines the liberal professions. Trade registration at the local trade office costs between EUR 20 and EUR 60.

How do I calculate my marginal tax rate?

The marginal tax rate indicates how much tax applies to the next euro earned. It results from the progressive income tax formula (section 32a EStG) and rises from 14% (above the basic allowance) to 42% (above approximately EUR 68,480 taxable income). The top rate of 45% applies above EUR 277,826. Our calculator automatically determines your exact marginal tax rate.

Minijob 2026: Tax Rules, Limits & Everything You Need to Know | Side Income Tax Calculator

What Is a Minijob?

A Minijob is marginal employment under section 8 of the German Social Code (SGB IV) with a maximum monthly income of EUR 520. This threshold has been dynamically linked to the statutory minimum wage since October 2022. With roughly 7 million Minijob holders, it is the most common form of side employment in Germany.

The EUR 520 Limit in Detail

The monthly threshold of EUR 520 translates to EUR 6,240 per year. Monthly earnings may fluctuate as long as the annual total stays within bounds. Occasional unforeseeable overages are permitted in a maximum of 2 months per calendar year, provided that monthly earnings do not exceed twice the threshold (EUR 1,040) in those months.

What the Employer Pays

The employer bears flat-rate charges of approximately 30% of gross pay: 15% pension insurance, 13% health insurance (only if the Minijob holder has statutory health insurance), 2% flat-rate tax (alternatively, individual income tax under tax class VI), and various levies (U1, U2, insolvency levy). The employee pays nothing -- unless they have not opted out of mandatory pension insurance.

Pension Insurance: Opt In or Out?

Since 2013, Minijob holders are subject to mandatory pension insurance. The employee contribution is 3.6% of gross earnings (EUR 18.72 per month at EUR 520). Benefits include full pension credits, waiting time months for retirement eligibility, access to disability pension, and eligibility for Riester subsidies. You can opt out by submitting a written request to your employer, which then applies for the duration of the employment relationship and cannot be revoked.

Multiple Minijobs

Without a main job, you can hold multiple Minijobs as long as combined earnings do not exceed EUR 520 per month. Alongside a main job with full social insurance, exactly one Minijob is exempt. Any additional Minijob is combined with the main job and subject to full social contributions and tax class VI.

Minijob and Tax Return

A flat-rate taxed Minijob does not need to be declared on your tax return. It does not increase taxable income or affect your tax rate. If individual taxation under tax class VI is chosen instead, the income must be reported in Anlage N and may result in a tax refund.

Common Pitfalls

Exceeding the EUR 520 limit retroactively triggers full social insurance obligations. Undisclosed second Minijobs alongside a main job can lead to back-payments demanded by social insurance agencies. Working time documentation requirements under the Minimum Wage Act apply to Minijobs as well.

Conclusion

The Minijob remains the most attractive side income option for earnings up to EUR 520 per month in 2026. The combination of zero taxes and zero social contributions for the employee is unbeatable. If you want to earn more, carefully evaluate the alternatives -- particularly freelancing or the Midijob transition zone.