An income tax prepayment (Einkommensteuer-Vorauszahlung) is a payment toward the expected income tax for the current year that self-employed people and freelancers must make in advance. The legal basis is Section 37 of the German Income Tax Act (EStG). The tax office sets the prepayments in a prepayment notice, usually based on the tax from your most recent tax assessment. They are due quarterly, on March 10, June 10, September 10 and December 10. They are only set if they total at least 400 euros per calendar year and at least 100 euros per due date (Section 37 (5) EStG). The prepayments you make are later credited against your annual tax. If you don’t pay on time, late-payment surcharges apply (Section 240 of the German Fiscal Code).

For you as a self-employed model or influencer, this term is especially important, because unlike employees, nobody automatically deducts tax from your fees. This is exactly where one of the most common mistakes happens: many models and influencers spend their entire fees and set nothing aside for taxes. After a good year, everything then comes at once: the back payment for the previous year and, at the same time, new, higher prepayments for the current year. That can quickly add up to several thousand euros and puts many in serious financial difficulty.

So set aside a fixed percentage of every fee in a separate account right away. How high it should be is best clarified with your tax advisor. If your income drops, you can apply to the tax office to have your prepayments reduced. If it rises significantly, the tax office can also increase the prepayments retroactively.