What is a midi-job and how is it taxed?
In a midi-job, employee can earn between 450 and 1300 euros per month. This marginal part-time employment relationship offers both employees and employers significant advantages: low taxes and full social security at the same time. You have to be aware of that.
Overview of a midi-job
Summary of a midi-job
What is a midijob?
A mid- job is an employment relationship in which an employee earns more than 450 euros and less than 1,300 euros per month. It is also often referred to as the so-called sliding zone.
What is the difference between a midi job and a mini job?
With a mini job , an employee earns 450 euros or less. In addition, unlike the mid-job, this is tax and insurance-free.
How many hours can I work in a midi job?
The limitation of the salary results in a limitation of the working hours. In a midi-job, you can therefore work a maximum of 135.42 hours per month (as of July 2021).
History of the midi-job
A midi-job is a hybrid of the low-wage sector. Similarly, the midi-job is halfway between the cornerstones of mini-job and regular part-time employment. A hybrid job.
In 2003, the federal German government introduced the midi-job as part of its controversial Hartz reforms. The aim was to prevent those employees from being disadvantaged who earn only slightly more than in an insurance-free mini-job.
In terms of its quantitative importance, the mid-job lagged significantly behind its smaller brother, the mini-job – but still doubled between 2003 and 2013 from 600,000 to 1.3 million. Why is the mid-job part of HR’s tools? In the low-wage sector in particular, this form of employment offers both employees and employers important advantages.
What is a midi-job?
In Germany, a midi-job is an employment relationship in which the employee earns more than 450 euros and less than 1,300 euros. Put simply, the mid-job begins where the mini-job ends.
Analogous to the term mid-job, the term “employment in the sliding zone” or, since July 1, 2019, “employment in the transition area” has also been used. These terms show the core idea of the mid-job: The employee has real leeway in earnings thanks to the upper and lower limits mentioned above. If an employee has several jobs, the total wage earned is decisive for the classification of the employment relationship.
Important: In addition to the regular monthly income, any one-off payments such as vacation pay or Christmas bonus are also included in gross wages.
In the event of any fluctuations in monthly income, the employer will either make an estimate or an average calculation – which then serves as the basis for duties and taxes.
Exceptions: All apprenticeships do not fall under the midi-job – i.e. neither interns, trainees nor graduates of a social year. However, students can work as a midi-job, they only have to pay a pension.
Employment in the transitional area is regulated in the Social Code (SGB) IV.
What are the differences between midi-job and mini-job?
A mini-job and a midi-job differ in the following points.
The midi-jobber therefore pays all social security funds and taxes. The employee contributions are, however, below those that a regular part-time or full-time employee has to pay.
5 important advantages of the midi-job for employees in Germany
The innovations introduced in the mid-job sector in 2019 – especially the increase in the upper limit of the transition area – have significantly expanded the group of mid-jobbers who benefit from lower social security contributions. Current estimates assume up to 3.5 million employees who work in Germany as mid-jobbers in the low-wage sector.
Benefit 1 – pension entitlement
A mid-jobber pays reduced employee contributions to social security, but still acquires full pension entitlements , for example also to a disability pension.
Benefit 2 – tax
A mid-jobber only pays wage tax in certain cases . The decisive factor is whether the mid-job is a full or part-time job. The tax bracket also plays a role: Those who are registered in tax brackets I to IV do not pay any wage tax . In classes V and VI, income tax is due – because tax class V can only be selected in combination with tax class III of the spouse and in tax class VI the mid-job is taxed as an activity in addition to the main job.
Benefit 3 – health and long-term care insurance
A mid-jobber has health and long-term care insurance at low contributions, but receives full benefits. In the event of long-term illness, the mid-jobber is entitled to continued payment of wages and sick pay.
Benefit 4 – unemployment insurance
Midi-jobbers receive benefits from unemployment insurance – if they have performed the midi-job for at least 12 months at a time. Unemployment benefit amount: 60 percent of average net earnings over the past 12 months; 67 percent when there are children. Payment duration: 12 months.
Benefit 5 – Additional part-time employment
Mid-jobbers can also do a mini-job – this is then a permissible part-time job. In this way, € 5,400 more earnings per year are possible without having to pay social security contributions and taxes. Because the lump sum is paid by the employer.
Can I do a midi-job during my studies?
Students who want to do a job during their studies , for example a mid- job during the semester break, then ask themselves what influence their income then has on other income. Are student loans or child benefit canceled in a midi job?
- Midi-job and child benefit: The beneficiary receives child benefit regardless of the amount of income. Regarding the number of hours, however, you must work less than 20 hours a week in order to be entitled to child benefit.
- Midi-job and student loan: There is an upper limit on income for student loans. This means that from a certain income level in mid-job, deductions for student loans are the rule. At the moment, the following applies: If you earn more than 450 euros a month, as is usually the case with a mid-job, this will affect the amount of the subsidy. So with a mid-job you are not entitled to the full amount.