Working Life > Self-Employment > Kuenstlersozialabgabe

Kuenstlersozialabgabe

Definition, Explanation

Every company requiring creative and non-creative services by artists and publicists on a regular basis (2-3 orders a year) or has done so within the last 5 years, has to pay 4.9 percent of the net-amount to the so-called Künstlersozialversicherung (artists social insurance). This regulation is defined by the Künstlersozialabgaben-Verordnung. The payments are managed by the German pension scheme. The auditor also checks if these payments have been exercised.

Requirements for the Künstlersozialabgabe:

• The artists and publicists are freelancing individuals and no judicial persons such as GmbH, AG, Ltd.
• Artists are:
  • Advertising photographers
  • Layouters
  • Stylists
  • Visagists
  • Web designers
  • Industrial designer, product designers
  • Musicians
  • Clowns at company events
• Publicists are:
  • Writers
  • Journalists
  • Speech writers
  • PR-writers
  • Poets
  • Authors for theatre, film, radio, tv
  • Lectors
  • Photo journalists
  • Critics
  • Scientific authors
  • Translators with the right of interpretation
• Ordering is done on a regular basis
• KSK-membership of the artist or publicist is not obligatory

Meaning of the Künstlersozialabgabe:

• Freelancing artists and publicists are insured in the statutory social insurance
• 50 percent of the contributions are being paid by the members
• 50 percent of the contributions are being paid by the Künstlersozialabgabe and a so-called Bundeszuschuss

Affected companies:

• Publishing companies
• PR und advertising agencies
• Museums, galleries, art trading companies
• Radio and TV stations
• Producers of music and movies
• Theatres and orchestras
• All companies which mandate artists and publicists with regards to advertising material, press releases or websites. Artists hired for company parties are also included in this regulation

Determination and amount of the Künstlersozialabgabe:

• Net salary for artists and publicists
• Extra costs such as material, transport, phone, „non-creative extra costs“
• Multiplication of all payments per year by currently 4.9 percent
• Payable before March 31st of the following year if less than EUR 10.000 has to be paid. The threshold is EUR 480 per year
• If the contributions are above EUR 480 per year, the payments have to be exercised on a monthly basis
• Advances have to be paid to the KSK before 10th of the following month
• Exception: fringe benefits which are free of taxation

Fees and late payment fines:

• If the Künstlersozialabgabe is not being paid without demand notice (including the last 5 years), fines up to EUR 50.000 are possible
• If the monthly contributions are not paid correctly, a late payment fine of 1% of contributions is valid

Tips, Checklist

For companies:

• Clarify if these regulations apply to you and which service cause such payments
• Talk to your tax accountant or another expert about possible misunderstandings. Services provided by web designers are subject to discussions
• Register at the KSK without demand notice
• Calculate your expenditures for the Künstlersozialabgabe, amounting to about 5 percent
• Generate reserves for the last 5 years. Maybe you will have to pay additional payments
• Generate special statistics about payments to artists and publicists
• Avoid missing documents required to determine the exercised payments. Otherwise the fees will be estimated
• One-time orders suchs as the development of a website during the period of founding are not subject to payments to the KSK
• Payments have to exercised even when the artists is living abroad
• Give your orders to companies, that is GmbHs and AGs. These are excluded from KSK payments
• Remember that you do not have to exercise payments if the work is mainly of technical nature. In this case, require corrected invoices

For artists and publicists;

• If this is your main profession, you are obliged to register at the statutory health insurance and social pension fund
• Consider if founding a GmbH would be suitable for, if possible in connection with other artists and publicists
• Inform your customers about their obligation to exercise KSK payments
• Services for customers which have been bought by yourself should be separated from service you provided yourself. Give an extra invoice for this. By doing so you can avoid a double payment and increases in cost
• Do not „cheat“ in terms of invoices. By changing your service into a service which is free of KSK payments, you will risk your KSK membership and incur a penalty

Last update: 06/22/2010