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I asked there, I also ask here. It seems he lives in Germany. Somebody knows how much he gets after taxes? He probably has also to pay for pension (~16% - ?) an

I asked there, I also ask here. It seems he lives in Germany. Somebody knows how much he gets after taxes? He probably has also to pay for pension (~16% - ?) and health care (~ 15% ).

deleted 15y ago
[deleted]
WA 15y ago
I'm not an expert, but I think this is getting pretty close: * You can certainly deduct some expenses from the tax. * You can earn around 8,000 € "tax-free". If you get more, you can substract that amount * As an indie developer (or as a freelancer or someone with a small company), you are responsible for your own health insurance (but you are required to have one). Public health insurance fees are 15.5% (but it is capped at around 500 € per month, which is still a lot), private might be a bit cheapter, depends on the company * It is wise to spend some money on a retirement plan, but not a requirement * Then you pay 30 % in tax (I don't know whether health insurance is tax-deductible) So, if you make 50K in revenue, you can substract business-related expenses, another 8K for the income that is tax-free and pay 30 % on the rest. That is your income, which can be used for health insurance, pension and everything else (again, I'm unsure whether health insurance is before or after tax). This is when you are not married. Marriage reduces the tax, but I don't know the numbers. In opposite, when you are employed, you pay 40.5 % tax, which includes everything (governmental retirement plan, health insurance, "public service fees" (don't know how you would call them)). Edit: Added some more info
- WA 15y ago
  I should probably add even more info: * If you are a freelancer and your income depends primarily on the time you invest, you should aim for a higher income, because obvioulsy vacation and sickness don't earn you any money. * As someone with a product that provides a more or less reliable income stream independent from time you put in, a yearly income of around 40-50K is certainly good and sufficient, to make a living. Eiswuxe said he made 3,500 €, which is a yearly salary of 42K. Not too bad and he can expect to steadily increase it, since more and more games are added to his portfolio. * Don't be afraid of taxes when you are self-employed. They aren't that much different from being employed. The main differene is that you are responsible for a steady income. * Go to a tax consultant (Steuerberater). Good ones offer you a free introduction, where you can ask questions. As a gentleman, it would be nice to use their service then at least once (if they seem to be reasonable). They can fill your tax return (Steuererklärung) for around 150-200 €, if you are employed and don't have tons of bills that need to be entered in a computer. For me at least, talking to a tax consultant gave me a way better understanding of the whole subject and even took away some fears what would happen, if I quit my job and start traveling the world while "only" making 50K in renevue per year on the side with my product.
kayoone 15y ago
From the revenue generated you can deduct your business expenses, health care (around 250EUR base, can be 400, depends on your situation), pension expenses (if he wants to pay that) and than you have to pay income taxes. Lets say he has 2500 EUR of pre-vat income after those expenses he would have to pay income taxes of roughly 500 EUR (32%) leaving 2000 EUR net income.
- roel_v 15y ago
  What's 'pre-vat income'?
  - kayoone 15y ago
    your income before taxes, so gross salary - health care - pension stuff...dunno how americans call it ;)
    - roel_v 15y ago
      Yeah, it was just a snarky way of saying that you meant 'pre-tax', not 'pre-vat'. VAT (Value Added Tax) is a specific tax, one that only end-consumers pay.
viandante 15y ago
Thanks WA and kayoone. So, let me get this straight: - Health insurance can be considered as a fixed 500 monthly ammount. Question: Can it be higher? - You are not obliged to pay for pension. Here I doubt a bit. Independent workers pay 26% of their income for pension in Italy... Which means (in thousands): ======= +50 -8 - no tax income -6 - health insurance ---- 36 -0.7 * 36 - income taxes ---- 25.2 + 8 ---- 33.2 33.2/12 = estimated monthly 2760 euro ======= If that were true, that is really good.
- moozeek 15y ago
  Health Care: self employed can choose between private and public insurance, private being less expensive for younger people (starting around 150 EUR or even lower for basic plans) but rates go up quickly when you're getting older. Public insurance rates are related to income but are capped at a certain rate (slightly adjusted year by year), so you're not going to pay more than like 650 EUR or so, even if you're making millions. But they are more expensive to start with (I think around 300) and they offer only basic plans (no special treatment, no alternative medicine, etc.). As you can not easily switch back from a private to a public plan, it can be a tough choice. Retirement: when self employed, you really can opt out of retirement plans, there's no obligation.
- roel_v 15y ago
  Minus capital expenses, various sorts of outsourced work (art, accounting, ...) and fees left and right (bank, chamber of commerce, ...) In a startup phase you can avoid most of them, and they're all not very big but still add up. Also, this is without pension contributions (if I'm following your calculations correctly?), whereas an equivalent full time job would include them. Still not too bad, but not an equivalent of what one would make in a 'regular' job, even when keeping risk discount factors low.
roel_v 15y ago
He doesn't mention this in the post, but how is VAT in the Apple Store/Android Market handled? Are Apple/Google resellers and do they claim that therefore they're not required to withhold VAT? Or do customers pay $1.99 * 1.20 or 1.19 or 1.21 depending on where their CC is registered? Because if no VAT is withheld anywhere, it's only a matter of time before the tax man will come knocking on dev doors...
- tluyben2 15y ago
  I was wondering this myself; does Apple include their VAT information in EU? They are a company in Luxemburg and Ireland; which one sends the checks and does it include their EU VAT number if it's the Luxemburg SARL? Basically in the EU if you do business with a company, you don't have to pay VAT. On the other side, for the buyers the 'invoice' contains nothing about VAT and their have been lively discussions if there is VAT, should be VAT and if there is how freelancers/companies can get that VAT back (again, company-company payments don't have to pay VAT, but getting it back across borders can be quite hard, especially when it is unclear if there is any).

I asked there, I also ask here. It seems he lives in Germany. Somebody knows how much he gets after taxes? He probably has also to pay for pension (~16% - ?) and health care (~ 15% ).

deleted 15y ago

[deleted]

WA 15y ago

I'm not an expert, but I think this is getting pretty close: * You can certainly deduct some expenses from the tax. * You can earn around 8,000 € "tax-free". If you get more, you can substract that amount * As an indie developer (or as a freelancer or someone with a small company), you are responsible for your own health insurance (but you are required to have one). Public health insurance fees are 15.5% (but it is capped at around 500 € per month, which is still a lot), private might be a bit cheapter, depends on the company * It is wise to spend some money on a retirement plan, but not a requirement * Then you pay 30 % in tax (I don't know whether health insurance is tax-deductible) So, if you make 50K in revenue, you can substract business-related expenses, another 8K for the income that is tax-free and pay 30 % on the rest. That is your income, which can be used for health insurance, pension and everything else (again, I'm unsure whether health insurance is before or after tax). This is when you are not married. Marriage reduces the tax, but I don't know the numbers. In opposite, when you are employed, you pay 40.5 % tax, which includes everything (governmental retirement plan, health insurance, "public service fees" (don't know how you would call them)). Edit: Added some more info

WA 15y ago
I should probably add even more info: * If you are a freelancer and your income depends primarily on the time you invest, you should aim for a higher income, because obvioulsy vacation and sickness don't earn you any money. * As someone with a product that provides a more or less reliable income stream independent from time you put in, a yearly income of around 40-50K is certainly good and sufficient, to make a living. Eiswuxe said he made 3,500 €, which is a yearly salary of 42K. Not too bad and he can expect to steadily increase it, since more and more games are added to his portfolio. * Don't be afraid of taxes when you are self-employed. They aren't that much different from being employed. The main differene is that you are responsible for a steady income. * Go to a tax consultant (Steuerberater). Good ones offer you a free introduction, where you can ask questions. As a gentleman, it would be nice to use their service then at least once (if they seem to be reasonable). They can fill your tax return (Steuererklärung) for around 150-200 €, if you are employed and don't have tons of bills that need to be entered in a computer. For me at least, talking to a tax consultant gave me a way better understanding of the whole subject and even took away some fears what would happen, if I quit my job and start traveling the world while "only" making 50K in renevue per year on the side with my product.

kayoone 15y ago

From the revenue generated you can deduct your business expenses, health care (around 250EUR base, can be 400, depends on your situation), pension expenses (if he wants to pay that) and than you have to pay income taxes. Lets say he has 2500 EUR of pre-vat income after those expenses he would have to pay income taxes of roughly 500 EUR (32%) leaving 2000 EUR net income.

roel_v 15y ago
What's 'pre-vat income'?
- kayoone 15y ago
  your income before taxes, so gross salary - health care - pension stuff...dunno how americans call it ;)
  - roel_v 15y ago
    Yeah, it was just a snarky way of saying that you meant 'pre-tax', not 'pre-vat'. VAT (Value Added Tax) is a specific tax, one that only end-consumers pay.

viandante 15y ago

Thanks WA and kayoone. So, let me get this straight: - Health insurance can be considered as a fixed 500 monthly ammount. Question: Can it be higher? - You are not obliged to pay for pension. Here I doubt a bit. Independent workers pay 26% of their income for pension in Italy... Which means (in thousands): ======= +50 -8 - no tax income -6 - health insurance ---- 36 -0.7 * 36 - income taxes ---- 25.2 + 8 ---- 33.2 33.2/12 = estimated monthly 2760 euro ======= If that were true, that is really good.

moozeek 15y ago
Health Care: self employed can choose between private and public insurance, private being less expensive for younger people (starting around 150 EUR or even lower for basic plans) but rates go up quickly when you're getting older. Public insurance rates are related to income but are capped at a certain rate (slightly adjusted year by year), so you're not going to pay more than like 650 EUR or so, even if you're making millions. But they are more expensive to start with (I think around 300) and they offer only basic plans (no special treatment, no alternative medicine, etc.). As you can not easily switch back from a private to a public plan, it can be a tough choice. Retirement: when self employed, you really can opt out of retirement plans, there's no obligation.
roel_v 15y ago
Minus capital expenses, various sorts of outsourced work (art, accounting, ...) and fees left and right (bank, chamber of commerce, ...) In a startup phase you can avoid most of them, and they're all not very big but still add up. Also, this is without pension contributions (if I'm following your calculations correctly?), whereas an equivalent full time job would include them. Still not too bad, but not an equivalent of what one would make in a 'regular' job, even when keeping risk discount factors low.

roel_v 15y ago

He doesn't mention this in the post, but how is VAT in the Apple Store/Android Market handled? Are Apple/Google resellers and do they claim that therefore they're not required to withhold VAT? Or do customers pay $1.99 * 1.20 or 1.19 or 1.21 depending on where their CC is registered? Because if no VAT is withheld anywhere, it's only a matter of time before the tax man will come knocking on dev doors...

tluyben2 15y ago
I was wondering this myself; does Apple include their VAT information in EU? They are a company in Luxemburg and Ireland; which one sends the checks and does it include their EU VAT number if it's the Luxemburg SARL? Basically in the EU if you do business with a company, you don't have to pay VAT. On the other side, for the buyers the 'invoice' contains nothing about VAT and their have been lively discussions if there is VAT, should be VAT and if there is how freelancers/companies can get that VAT back (again, company-company payments don't have to pay VAT, but getting it back across borders can be quite hard, especially when it is unclear if there is any).