Marginal employment
The minimum wage is rising: what does that mean for mini-jobs?
The minimum wage will increase in 2025. Mini-jobbers in particular can be happy about this. Part-time employment has many advantages – but also pitfalls.
Waiting tables, cleaning, delivering food – those who earn their money this way are usually marginally employed and have a so-called mini-job. The basis for this type of work is a law from 1977. Mini-jobs as we know them today have existed since 2003 as a result of the Hartz reforms and Agenda 2010.
Since then, what is considered has changed again and again “Mini job” applies. The biggest change: the introduction of the minimum wage in 2015. Before that, mini-jobs were often so-called one-euro jobs that are now mostly carried out by the unemployed.
For people who can’t or don’t want to work full-time, a mini-job is cheap: hardly any taxes, flexibility, the same occupational safety as with one “normal” Job. But there is also criticism of the concept. What you should know before starting a mini-job and what mistakes and pitfalls to avoid:
What is a mini-job anyway?
A mini-job is a form of part-time employment in which the employee can earn a maximum of 538 euros per month. Calculated over a year, that’s up to 6,456 euros.
This type of employment is characterized by the fact that earnings are below a certain limit, which brings with it tax and social security benefits.
Here are the central features of mini-jobs:
- Earnings limit: Employees are not allowed to earn more than 538 euros per month to be considered mini-jobbers.
- Tax regulation: There are no regular payroll taxes on income from mini-jobs. However, the employer can pay flat-rate contributions that are less than the regular social security contributions.
- Social security: Mini-jobbers are generally not fully integrated into the social security systems. This means: you only pay reduced pension insurance contributions.
- Flexibility: Mini-jobs often offer flexible working hours and can often be found in industries such as catering, retail or cleaning.
What are the advantages of a mini-job?
Regardless of issues such as vacation entitlement, protection against dismissal or minimum wage, mini-jobs are also subject to labor law regulations. A common misunderstanding is that mini-jobbers have fewer rights than full-time employees. However, they actually enjoy the same working rights as their full-time colleagues.
This specifically means that mini-jobbers are entitled to:
- Vacation: Mini-jobbers are entitled to paid vacation in accordance with the Federal Vacation Act. As a rule, you are entitled to at least 20 days of vacation per year, based on a 5-day week.
- Protection against dismissal: Mini-jobbers are protected by general protection against dismissal, which means that dismissal may only take place for certain, legally recognized reasons. In the event of termination, the employer must also observe the relevant deadlines.
- Minimum wage: Mini-jobbers are entitled to the statutory minimum wage. Since January 1, 2024, this has been 12.41 euros per hour. Mini-jobs are also affected by this regulation, which means that mini-jobbers must be fairly paid for the work they do.
- Equal treatment: Mini-jobbers may not be treated worse than comparable full-time employees in terms of wages, working conditions and other employment conditions.
What are the disadvantages of a mini-job?
Perhaps the biggest disadvantage of part-time employment: mini-jobs are not subject to social insurance contributions. This means that no claims for unemployment, health or nursing care insurance benefits can be derived from this form of employment. Mini-jobbers are therefore not entitled to health insurance coverage or sick pay.
In addition, other disadvantages of a mini-job are:
- Precarious employment: Mini-jobs usually do not offer long-term employment prospects and are often associated with less job security.
- Fixed term and part-time trap: Many mini-jobbers want full-time employment, but cannot find a suitable opportunity, which leads to involuntary part-time employment.
- Income inequality: Mini-jobs are often common in industries that pay low wages, contributing to income inequality.
- Limitations on professional development: Since mini-jobs are usually located in areas with little opportunity for advancement, they often do not offer employees any opportunities for professional development.
- Poverty in old age: Mini-jobs can increase the risk of poverty in old age – especially for women. They often take mini-jobs because they take care of family obligations, such as looking after children or caring for relatives. Due to the lower income with a mini-job, the pension entitlements are correspondingly small.
When will the minimum wage increase?
The minimum wage in Germany has been 12.41 euros per hour since January 1, 2024. On January 1, 2025, the minimum wage will rise to 12.82 euros. That’s why the earning limit increases and mini-jobbers can then earn 556 euros per month – without losing the advantages of mini-job employment. Calculated over a year, the wages increase to 6,672 euros.
How many hours do you have to work for 538 euros?
Employers must ensure that part-time employees do not earn more than 538 euros per month. This corresponds to a maximum working time of around 43 hours per month. In the event of changes, the employment contracts should be adjusted in good time. And even if the minimum wage is increased: by adjusting the upper earnings limit, the maximum working hours for mini-jobbers remain the same.
What is the difference between mini-job and midi-job?
As mentioned, a mini-job refers to employment relationships where the monthly salary is up to 538 euros. In contrast, a midi job involves jobs that have an income between 538.01 euros and 2000 euros.
Both types of employment are taxable, but there are differences in taxation. Mini-jobs are often taxed at a flat rate, which means that the employer pays a fixed percentage of earnings as tax. This regulation simplifies tax treatment and is generally advantageous for mini-jobbers because they do not have to pay regular payroll taxes.
In the case of midi jobs, however, taxation is based on the employee’s individual income tax characteristics. This means that the actual tax rate is determined based on total income and personal tax characteristics. Midi-jobbers generally have higher earnings, which leads to a more differentiated calculation of tax liability.
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Source: Stern
