What is undeclared work?
With Undeclared work is paid work that has not been registered with the authorities and is illegal. Neither social security contributions nor taxes are paid on this work. It is classified under the illegal shadow economy.
How is moonlighting agreed?
Illegal employment is not recorded anywhere in writing. Everything is agreed verbally. Corresponding remuneration is paid out in cash without it appearing in the accounts and taxes are withheld and paid to health insurance companies and the tax office.
What does not count as undeclared work?
There are some activities that are not classified as illegal employment. The following activities are not assigned to the illegal black economy:
- Assistance provided by life partners
- Assistance from other relatives
- Neighborly help and favors
However, it is important here that the employment is only of a short-term nature. Likewise, the activity must not be aimed at making a sustainable profit.
What is the purpose of undeclared work?
Companies want to use undeclared work to employ people and get work done, as well as to save on taxes and social security contributions. Not only for the companies Undeclared work a good way to save money. Employees also benefit, as they do not have to pay any contributions.
What are the consequences of undeclared work?
Illegal employment is not a trivial offense. It is illegal and is punished at least as an administrative offense. In most cases, it is prosecuted as a criminal offense (tax evasion, benefit fraud, misappropriation of funds). Administrative offenses are punished with fines. Criminal offenses, on the other hand, can result in even higher fines or even imprisonment.
Does bogus self-employment also count as illegal employment?
Bogus self-employment is also classified as undeclared work. It is a special form. A self-employed person enters into a service or work contract with just one client. However, in such a case, an employment relationship would have to be concluded, as the "self-employed person" has no choice but to work for other clients.
It is also good to know that the billing of Event- and trade fair personnel via self-employment is prohibited by law due to bogus self-employment. Anyone wishing to work as a host/hostess or promoter can only do so via a legally secure employment.
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