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Secondary income: from when does it become taxable?

Anyone who earns something on the side alongside the main job, for example through renting out, a small business or fees, wonders from when it must be taxed. There is an exemption limit for secondary income and rules on when a tax return becomes mandatory.

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If an employee's secondary income that was not subject to wage tax deduction is at most 410 euros a year, it is not taken into account for tax; up to 820 euros there is a sliding hardship adjustment (§ 46 EStG).
This is an exemption limit, not an allowance: if it is exceeded, the secondary income is taxable in full. There is then usually also an obligation to file a tax return.

What you should do now

  1. 1

    1. Determine income

    Establish your secondary income after deducting the associated costs.

  2. 2

    2. Check the limit

    Compare the result with the 410 euro exemption limit.

  3. 3

    3. Clarify the obligation

    Clarify whether an obligation to file a tax return exists.

  4. 4

    4. Declare correctly

    State taxable secondary income in full.

How to spot the scam

  • Exemption limit and allowance are confused.
  • Secondary income is not declared despite exceeding the limit.
  • Costs associated with the income are not deducted.

Frequently asked questions

Up to what amount is secondary income tax-free?

An employee's secondary income that was not subject to wage tax deduction is not taken into account up to 410 euros a year; between 410 and 820 euros a sliding hardship adjustment applies (§ 46 EStG). This is an exemption limit, not an allowance.

What is the difference between an exemption limit and an allowance?

With an allowance the amount always stays tax-free and only the excess part is taxed. With an exemption limit everything is tax-free as long as the limit is not exceeded; if it is exceeded, the entire amount is taxable.

Do I then have to file a tax return?

If the secondary income exceeds the limit, there is usually an obligation to file a tax return. An obligation can also exist in other cases. State the income in full and deduct the associated costs so you tax only what you actually earned.

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General information for self-help, not legal advice (RDG). In case of a high loss or uncertainty: contact a consumer advice center or a lawyer.