<aside> 💡 For all Luminerds located outside of Germany, we offer two employment options:

This is the most important question to answer before you officially become a Luminerd, to ensure your onboarding will run as smoothly as possible.

</aside>

Freelancer or Employee of Record?

The following is a comparison between the two work modes.

<aside> 🏃 TL;DR

As a freelancer, you have more liberties to structure work, taxes, and social security — but you're also responsible for following the rules. As an employee, your employer takes care of everything.

</aside>

Freelancers

Employee of Record

Taxes

You're responsible to file your own taxes.

Taxes

All wage taxes are usually deducted from your salary automatically.

Social Security (e.g. Health Insurance, Pension Insurance, and similar)

You're responsible to follow your residence country's rules. Depending on your status, you may or may not be exempted from certain insurances, which would increase your immediate cash flow from your work for Luminovo.

You're also responsible for ensuring that you're not wrongly classified.

Social Security (e.g. Health Insurance, Pension Insurance, and similar)

Deducted from your gross salary according to the laws of your land.

Paperwork & Permits

Invoicing works through Luminovo's service providers and should be no hassle for you.

Other permits, applications or similar paperwork required in your country must be done by you,

Paperwork & Permits

Is usually taken care of by the employer/EOR (Employer of Record, explanation, see below).

The EOR also requires you to see and will check your applicable permits (e.g. work-, residence-).

Deductions

As a freelancer, you run your own little business. Depending on your circumstances, that gives you more liberty to structure your finances, e.g. by making use of small business support or deducting expenses.

Generally, Luminovo cannot provide any specific advice.

Deductions

Depending on your national tax laws, you may or may not deduct certain work-related expenses from your taxable income by filing your taxes with your government.

Technical Setup

  1. A service provider hired by Luminovo (e.g. Deel, Remote.com) provides a freelancing contract that is specifically tailored to your residence country.
  2. With the help of the service provider, Luminovo and you draft the freelancing contract (~ 1-2 days).
  3. Luminovo and you sign the freelancing contract.
  4. The service provider takes care of creating and sending, on your push of the button, (usually monthly) invoices to Luminovo.
  5. Either directly, or through the service provider, Luminovo wires money directly on the payment service of your choice (bank account, online banking service, or similar).

Technical Setup

  1. Luminovo mandates a service provider to employ you in the service provider's subsidiary (also known as Employer of Record, EOR).
  2. Over the course of approx. 2 weeks, Luminovo and you interface with the service provider's support staff in order to draft a work contract.
  1. You and the EOR sign the work contract.
  2. You interface with the support staff of our service provider/the EOR only for the necessary, required legal and payroll formalities.
  3. Your net salary will be wired to you by the EOR.

Your Fee

Luminovo and you will agree on a yearly or monthly fee, to be invoiced to us by you in (usually) a monthly fashion.

This (yearly) fee will always be higher than your comparable yearly gross salary, because we’re paying out to you all social security contributions (that we would have to pay if you were an employee). That way, you can employ that money as wish (e.g. pay it into insurances as you wish, or otherwise invest/save/spend it).

Your Salary

Luminovo and you will agree on a yearly gross salary (if need be, adjusted for part-time work or a limited contract).

The EOR will pay out, in a monthly fashion, your net salary (= after tax and social security deductions) to you.