Quite a few entrepreneurs start their part-time self-employment already at a time when they are still in a permanent employment relationship. After the termination of the main activity bspw. due to insolvency or a dismissal for operational reasons, the part-time job turns out to be a great advantage. The entrepreneur can work alongside his Unemployment benefit I on a solid Allowance fall back, which we want to explain in the following article more near.
In addition, you also get a Overview of other allowances, granted to the self-employed while receiving unemployment benefit I in a part-time job.
When receiving unemployment benefit I, there are various allowances for secondary employment. Image source: andreas160578/pixabay.com
Table of contents
Under which conditions and prerequisites is there an allowance for ALG I??
You can earn additional money while receiving unemployment benefit I. The employment agency does not care whether you earn the money as a self-employed person or as an employee. The only condition is that regularly use less than 15 hours per week for it. If there is a week in which you work more than 15 hours, but otherwise less, then this is not a reason to reduce the benefits. However, if you regularly use more than 15 hours per week, this means that, from the agency’s point of view, you are no longer unemployed and are no longer entitled to unemployment benefit I.
- Regularly work less than 15 hours per week
- Report sideline employment and amount of income to the employment agency
It is also important that you report to the employment agency a secondary employment as well as the amount of the income. Normally at the latest on the day of the start of the activity or employment. We will come to the specific requirements of the individual allowances later on.
How much additional income am I allowed to earn with unemployment benefit I??
You can, during the receipt of unemployment benefit I at least 165 Euro per month earn additional income as a self-employed person without it being credited to you. If, for example, you start a business as a sideline while you are unemployed, you have an allowance of 165 euros per month. Of course, you can also earn more. However, your ALG I will then be reduced accordingly.
- General allowance of 165 euros per month
- If you already had a sideline job before receiving unemployment benefit I, you may be able to earn. earn more
- In the case of a self-employed sideline job, 30 percent of the income is automatically taken into account as operating expenses
You can earn this Increase the tax-free amount. This is possible if you already had a sideline business before becoming unemployed, for example, and had earned income from it.
A "automatic" increase of the tax-free amount by 30 percent also applies if you have a self-employed activity on the side. Because then 30 percent of the income from the self-employed activity is credited to you as operating expenses. If you can prove that you have higher business expenses, these can be taken into account.
Additional income possibilities when receiving unemployment benefit I at a glance
- Allowance 1: "General" allowance
The basic tax-free allowance of 165 euros per month is available to everyone. This additional earnings limit applies to newly taken up employment. Or an activity that you have only been doing on the side for less than 12 months.
- Allowance 2: From a part-time self-employment
If you already had income from a part-time self-employment before becoming unemployed, you will receive the average income as a Additional tax-free allowance credited.
- Allowance 3:From a mini-job
Let’s assume that the entrepreneur has at the same time in the last 18 months still a mini-job exercised. he/she consistently earns 300 euros per month. Continue to do this mini-job even after becoming unemployed and receive the same amount of money. For this mini-job, the unemployed person receives an additional tax-free allowance of 300 euros – this means that this additional income is completely tax-free.
You could therefore claim a total of 3 allowances here. Condition is however in each case that you spend altogether less than 15 hours per week for it.
Which time conditions must be fulfilled for the additional allowance?
In the previous section, we learned that you receive an additional allowance if you already had a side job before receiving unemployment benefit I. However, there is a time aspect to consider here:
If in the last 18 months before the beginning of the Entitlement on ALG 1, at least for 12 months If the employee has carried out a sideline activity, the employment office will grant an allowance additional allowance granted. It is irrelevant whether this activity was performed on a self-employed or employed basis. The allowance is available to unemployed persons with a secondary job. Again, this employment must have been performed for less than 15 hours per week.
How the additional allowance for ALG I is determined? Case studies and calculations
Example 1: Start-up of a sideline business during unemployment
Imagine you start a side business while unemployed. Let’s also assume that you earn income immediately. What is the maximum amount you can earn without having your unemployment benefit reduced??
Since you receive a lump sum of 30 percent of the income as business expenses, you could earn Earn 235 Euro per month without deduction. 165 Euro are available to you anyway as a tax-free amount. If you have higher business expenses and can prove them, they will be credited to you.
Every euro you earn in o.g. If, for example, you earn more, your unemployment benefit I will be reduced by around 0.70 euros.
Example:
| Income | 300 Euro |
| – Operating expenses | 90 Euro (flat rate 30 %) |
| = Subtotal | 210 Euro |
| – Allowance | 165 Euro |
| = Profit after allowance | 45 Euro |
The 45 Euro will be deducted from your unemployment benefit I.
Example 2: Sideline business and income already exist for years
If the secondary activity was performed continuously until the beginning of unemployment, the Income of the last 12 months taken into account. The situation is different if you do not have continuous secondary employment. In this case the additional income of the last 12 months is added and divided by twelve. The allowance per month is then one Monthly average income from the last 12 months.
Example
From 01.01.2018 to 31.12.In 2019 (24 months in total), the entrepreneur was continuously self-employed on a sideline basis, the profit was 500 euros per month. In the period from 01.01.2020 to 30.06.In 2020, he could not take care of his self-employment for family reasons. His employer gives notice of termination for operational reasons at 30.06.2020 from.
The now unemployed person can claim an allowance for the profit from his part-time self-employment when calculating his unemployment benefits. This is calculated as follows:
In the last 12 months before the start of unemployment, the claimant earned from the
| 01.07.2019 – 31.12.2019 | 6 | 500 | 3.000 |
| 01.01.2020 – 30.06.2020 | 6 | 0 | 0 |
| Total profit | 3.000 |
Since the part-time self-employed person has not worked continuously in the last 12 months, a twelfth of the total profit is calculated as a monthly tax-free amount of 3.000 Euro (3.000/12) results in a (additional) allowance of 250 euros per month. If the part-time self-employed person had worked continuously, the additional allowance would be 500 euros accordingly.
Image source: stevepb/pixabay.com
Example 3: Existing side business and new activity during ALG I
In this constellation, we combine the two o.g. Examples.
| Income from new self-employed sideline activity | 235 Euro |
| Income from existing secondary employment | 250 Euro |
| – Operating expenses from new sideline activity | 70 euros |
| – Allowance 1 | 165 euros |
| – Allowance 2 | 250 Euro from existing sideline activity before unemployment |
| Total | 0 Euro |
In this case, your unemployment benefit I would not be reduced. If you earn more, then there is a corresponding reduction.
Example 4: Mini-job, side business and ALG I
In the fourth example we describe the Constellation mini-job, sideline and ALG I. Again, as with the examples already given, there is initially an allowance of 165 euros per month. This can be topped up if you have worked the mini-job or part-time job for at least 12 months within the last 18 months.
You can extract the numbers from the o.g. You can also replace your self-employment with a mini-job or other salaried activity. Instead of operating expenses you can then possibly Advertising expenses claim. Here, however, there are no lump sums, but only how they are actually incurred, such as travel expenses. In addition, please also take into account that you spend less than 15 hours per week on it, because otherwise you are no longer considered unemployed by the employment agency.
If the calculation of the tax-free amount is gross or net, the following applies?
Provided that you have a mini-job or employment as an employee, then the net earnings apply. In other words, the amount that you actually get paid into your checking account. If you are self-employed in the sideline, then there is no gross and net. In this case, the income minus the operating costs applies.
How can I report the part-time work and the income?
You report the secondary activity to the employment agency either by mail with the appropriate forms or most simply online.
My income from part-time work changes every month. How is this handled?
In this case, you report your income to the employment agency the following month. The agency then calculates your entitlement to ALG I and subsequently pays it out accordingly.
Conclusion: With the side business without problems with the unemployment benefit to earn additionally
If you receive unemployment benefit I, then there are definitely some ways to earn extra money. Especially if you have been working as a sideline for some time before becoming unemployed. Because then you can continue to earn this income without further ado, without your claim to ALG I is reduced. The appropriate conditions for it you got to know in the article.
Frequently asked questions on the subject of "sideline business
Torsten Monday
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