Status: 13.10.2023, 19:00 PM
By: Bettina Menzel
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Almost seven million mini-jobbers are registered in Germany (as of June 2023) © IMAGO/Thomas Trutschel/photothek
In Germany, it is estimated that 90 percent of domestic helpers are not registered. There are good reasons for mini-jobbers to make the employment relationship official, says an expert.
Munich – Only one in ten domestic helpers in Germany is officially registered, according to a recent study by the German Economic Institute (IW). Both sides often shy away from this step. However, registering mini-jobbers could also bring advantages, especially for employees, says an expert.
For this reason, domestic helpers are rarely registered
About 6.6 million mini-jobbers were registered in the commercial sector in June 2023, according to the quarterly report of the Minijob Central. In private households, the figure was only around 300,000 – and the trend is falling. "According to our estimates, the number of domestic helpers who are not registered and work illegally without insurance and accident insurance coverage has been over 90 percent for years," said IW study author Dominik Enste. As reasons on the employer side, the expert cited the fact that a private household is not a place of work like any other for many. "Continued payment of wages in the event of illness or during the vacation of the domestic helper is an unusual and unwanted obligation."
Conversely, according to Enste, it is unattractive for many aid providers to pay social security contributions because they do not receive any additional benefits. For example, they are covered by health insurance through family insurance or will not be able to achieve a pension above the minimum income in the foreseeable future. They also shied away from bureaucratic hurdles. "The shadow economy continues to boom in and around private households," says the IW researcher. Other experts, however, can certainly see advantages for registration – according to this, employees in particular can benefit.
Mini-jobbers: Why it is often worthwhile for employees to register
In the case of mini-jobs, the gross income is basically the same as the net income. But employees can voluntarily pay into the pension insurance in order to achieve the full retirement years, explains Lena-Marei Ardelt, Head of Business Development at quitt Deutschland GmbH in a statement on Friday. In the example of a six-hour week with an hourly wage of 15 euros, pension contributions amounted to around 13.6 percent, according to Ardelt. For the payment of 48.96 euros per month, employees would therefore receive full pension entitlements.
On the employer side, however, in this example, with a gross salary of 360 euros, taxes of 15 percent are incurred, which would correspond to 54 euros. However, 20 percent of the total employer costs, including salary, would be refunded to private households that hire mini-jobbers from the tax, Ardelt continued. However, the repayment is capped at 42.50 euros per month. The costs for the employer in this calculation example would therefore be 11.50 euros per month.
Example calculation midi-jobber: Employee receives full pension entitlements for 70 euros per month
The monthly earnings limit for a mini-job is 450 euros. In the example of employment to the extent of twelve hours per week, according to the expert, there is already talk of a midi job. Based on an hourly wage of 15 euros, the gross wage in this calculation example would be 780 euros. With the submission of 70 euros in social security contributions, the midi-jobber would receive full pension entitlements, the right to unemployment benefits and would also be covered by health insurance. The employer would have to pay taxes of 210 euros, but these could be claimed from the tax, according to Ardelt.
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"20 percent of the total employer costs, up to a maximum of 333 euros per month," says the expert. "The employer's costs are therefore fully covered by the tax here." This means that you get all the coverage - such as accident insurance and employer insurance - as well as a legal employment relationship "virtually free of charge," it continued. However, this analysis is not entirely independent: the company for which expert Lena-Marei Ardelt works takes care of the registration, administration and billing of domestic helpers. The more people register their mini-jobber, the better for quitt Deutschland GmbH.
From the point of view of the German Economic Institute, the responsibility of the shadow economy for mini-jobs also lies with the state. Households in need of care in particular would employ domestic helpers. "In view of the continuing sharp increase in the number of people in need of care and the resulting increasing need for support in everyday life beyond the actual care, simple voucher models should finally be tested in Germany as well," suggests IW expert Enste as a solution.