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Explained: Who are the foreign workers coming to Germany?

A new infographic breaks down which types of foreign workers - from low to high skilled - come to the Bundesrepublik, and where they stand in an EU wide comparison.

Explained: Who are the foreign workers coming to Germany?
An employee of wiring system manufacturer Leoni AG in Roth, Bavaria. Photo: DPA

The interactive infographic (available here), produced by Swiss-based employment provider Accurity GmbH, breaks down the numbers of high, low and medium skilled workers in the Bundesrepublik.

We look at the meanings behind the numbers, which come from European Commission data collected in 2018, for each of these groups.

SEE ALSO: Find a job in Germany

Low skilled

Germany is the country in the EU with the most low skilled foreign workers, at 1,143,000 people, or 29 percent of its total international workforce.

While the definition of “low-skilled” varies, it generally applies to jobs that require a limited education level or can be learned in a short amount of time. Some examples include kitchen workers or cleaners.

“Interestingly, despite the anti-immigration policies proposed in the UK and the Brexit vote, the UK takes in more highly skilled workers than anywhere else. Germany, on the other hand, takes in the most low skilled,” Stefano Roberti, a consultant with Accurity told The Local. 

The high numbers can be attributed to Germany “having one of the most liberal immigration systems,” Accurity CEO Nicola Clothier further explained. 

In June, the country passed new immigration laws in order to ease a labour shortage and make it easier for foreign workers of any education level outside of the EU to snag a work visa.

According to government estimates, the new rules will bring an additional 25,000 workers to Germany every year.

SEE ALSO: What Germany’s new controversial immigration laws mean for foreign workers

Medium skilled

A full 46 percent of Germany’s foreign workforce, or 1,829,115 people, can be defined as “medium skilled”. 

The definition of medium skilled worker is applied to people with upper secondary and post-secondary education, but who don’t have a degree from a trade school, college or university. 

The country is facing a shortage in employees with a medium-level of education, hence this group making up the largest incoming foreign proportion of the German labour market.

They gravitate towards such jobs include carpenters, electricians, nurses, and caregivers. In the care sector alone, there are currently almost 40,000 unfilled positions throughout the country, which can largely be attributed to Germany's aging population.

“As a general trend in Europe, it is increasingly difficult to find professionals in those sectors nowadays,” said Roberti.

SEE ALSO: Explained: How Germany plans to fight its drastic shortage of care workers

High skilled

There are a total of 1,012,190 high skilled foreign workers – or 25 percent of the total international workforce – in Germany.

These are workers who have a specific skill set which usually comes with a trade school or university degree such as a doctor, engineer or IT professional.

Figures show that the Bundesrepublik needs high-skilled workers to sustain its workers: only about a third of workers in this category were born in Germany. Close to 30 percent were born in another EU country, with an additional 25 percent born outside of the EU.

Germany has up to two million vacancies for high skilled workers, but red tape still remains in filling these vacancies through those coming from abroad, says Clothier.

“Germany is very apt at integrating migrants but doesn’t necessarily recognize qualifications obtained outside of its borders,” said Clothier.

To attract more high skilled workers and speed up the process to give them a visa, Germany has been offering a so-called Blue Card visa since 2012, targeting foreign workers in professions such as engineering, 

Germany also has a job-search visa for people with high qualifications, meaning it’s possible to enter the country without already having applied for a job, and simply search for one.

Germany is by far the largest granter of EU blue cards within the EU. Deutschland divvies out nearly 90 percent of the coveted cards, followed by France (3.6 percent), Poland (3.2 percent) and Luxembourg (3 percent).

For Germany's so-called shortage occupations (Mangelberufe – such as IT-professions, doctors and engineers), Blue Card recipients have to receive an annual gross annual salary of €41,808. For everyone else, it amounts to €53.800.


SEE ALSO: Explained: How to get a Blue Card to live and work in Germany

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WORKING IN GERMANY

7 tips for how to survive as a freelancer in Germany

Taking the decision to go it alone and freelance in Germany can be a daunting prospect. But, if you do it right, it can be an exciting and liberating path. Here are some of our top tips on how to survive.

7 tips for how to survive as a freelancer in Germany

1. Get a tax advisor

The German tax system is complicated, even for Germans. All the associated paperwork uses the Amtsprache (authority language) which is more like legalese than ‘normal’ German, and mistakes when filling out tax forms can cause you, at best, a massive headache and, at worst, a costly fine. So it’s best that you employ someone who knows what they’re doing to help you out.

That person is called a Steuerberater (tax advisor) in Germany. They will help you register with the tax office, correspond with them and submit your tax declarations.

Be aware that, in Germany, different deadlines apply for tax returns depending on whether you employ an official tax advisor or not. If you are doing the tax return on your own, the deadline for submitting your annual tax return is earlier than if you use a tax advisor’s services. 

READ ALSO: What NOT to do when you’re freelancing in Germany

When looking for a tax advisor, a top tip is to use your network to get recommendations. Ideally, you want someone who will do more than just fill in the forms for you, but who will actually advise you on how best to manage your business finances so that you can make tax savings.

2. Keep your accounting in order

The better you keep your own accounts in order, the easier it will be for your tax advisor to compile your tax declarations and therefore the cheaper their services will be.

As a freelancer, there are a lot of costs you can deduct from your taxes – from train tickets, working materials, to meals out – so it’s best to keep hold of all your receipts and to keep them in good order.

2 euros and 50 cents lie on a receipt in a beer garden. Photo: picture alliance/dpa | Peter Kneffel

In Germany, you’re obliged to keep hold of receipts for two years, in case of a tax inspection, so it’s a good idea to photocopy the type of machine-printed receipts you get from restaurants so that they stay legible for a long time.

There are also a few things to be aware of when writing your own invoices. Firstly, make sure that you include your tax number. This isn’t the 11-digit Steueridentifikationsnummer that everyone gets when registering in Germany, but the 10-digit Steuernummer you get from the Finanzamt after registering yourself as a freelancer. 

Most companies won’t pay you if you don’t have this on your invoices so make sure you include it.

You should also make sure that you number your invoices properly – ideally in ascending order so that you can easily keep track of them. You are not allowed to issue two invoices with the same number and if you do so and the finance office notices, you could face an inspection of your whole accounting system.

There are numerous great accounting software programmes you can use to help you, such as Lexoffice and Sevdesk and, even if you have to pay for them, the costs will be tax deductible!

3. Find out if you’re eligible for financial support

In Germany, there are several opportunities for freelancers to gain financial support and to cut their outgoings, and its worth finding out if you’re eligible for them.

If you’re claiming unemployment benefits under ALG 1 and are thinking about becoming a freelancer, the employment office offers a special type of financial support to help you to get your freelance business off the ground.

Called the Grundungszuschuss (“foundation grant”) the payment is a six-month grant equalling your monthly entitlement under ALG 1 plus €300 towards your insurance costs can be applied for those in receipt of this unemployment benefit.

READ ALSO: Will freelancers benefit from Germany’s €300 energy allowance?

If you are engaged in some form of artistic profession in Germany – which can include journalism to pottery – you may be entitled to membership to the Kunstlersozialkasse (artists’ social insurance).

Being a member of the KSK means you only have to pay half of your health insurance and pension contributions, and the KSK will pay the rest.

4. Work out how much you think you will earn

As with starting any business, you need to have some idea of your expected earnings from the outset.

If you’re just starting out as a freelancer, or have some freelance gigs on the side of an employment position, then it might be worth considering registering yourself as a Kleinunternehmer (“small business”).

As a Kleinunternehmer, you can currently earn up to €22.000 per year without having to charge VAT and having to submit only yearly tax declarations. 

An income tax declaration form lies on a table. Photo: picture alliance/dpa/dpa-Zentralbild | Hans-Jürgen Wiedl

Be aware that if you are registered as this kind of freelancer, you must include the following sentence in your invoices: ‘Gemäß § 19 UStG wird keine Umsatzsteuer berechnet’ which means ‘In accordance with Paragrah19 of the German VAT law, no VAT has been added to this invoice.’

READ ALSO: Everything you need to know about your German tax return in 2022

If you think you will earn more than €22.000 per year, you will need to pay Umsatzsteuer (VAT) and will have to submit tax declarations in advance and more often. Depending on how much you earn, this could be every month or every quarter. 

5. Get your insurance in order

In Germany, it’s a legal requirement to have health insurance.

If you’ve just made the move from employment to being a freelancer and want to keep the same health insurer, you should get in contact with your health insurance provider straight away to tell them about your change of circumstances. They will ask you to re-register and to tell them your projected freelance earnings for the year, so they can amend your monthly fees.

If you don’t keep your health insurer provider updated, you could continue to be charged the higher rate that you had from your previous salary.

The insurance cards of the health insurance companies DAK, AOK, Barmer and Techniker-Krankenkasse TK lie with euro notes under a stethoscope. Photo: picture alliance / dpa | Daniel Karmann

It’s not just health insurance you need to think about as a freelancer. It’s also wise to think about protecting yourself from any sort of claims that could arise as a result of any working mishaps. 

If, for example, you lose your laptop which contains confidential client information, you need to be protected against claims.

That’s why it’s good to have both Betriebshaftversicherung (business liability insurance) and Rechtschutzversicherung (legal protection insurance).

6. Plan your time wisely

All of these bureaucratic obligations take time. So it’s really important that you take account of that when planning your time. For example, planning half a day a week to deal with your invoices, filing, emails to clients, and conversations with authorities can be really beneficial when scheduling your working time. 

7. Grow your network

As a freelancer, networking is absolutely crucial to success. 

Keep an up-to-date profile on websites like LinkedIn and German equivalent XING and keep in contact with anyone you’ve ever worked with, no matter how brief the contact was. 

Having a network is not only about getting more clients, but also about building a support network in your field to exchange advice, tips and generally for your own enrichment. 

Participating in workshops related to your field, going to seminars, and meet-ups, can be great ways of broadening your network. 

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