The grant runs in two phases: 6 months of your ALG rate plus 300 € for social insurance, then 9 months of only 300 € with proof of active work. The payments themselves are tax-free.
✓ Verified: 18/07/2026
WHAT TO DO
AUTHORITY
Agentur für Arbeit (Bundesagentur für Arbeit)
Public body
Unemployment benefit I, start-up grants and job placement all run through the Agentur für Arbeit where you live. Find your branch under «Dienststelle vor Ort».
The grant is a soft landing: the first six months you live on your usual ALG rate and build up, and the 300 € covers social insurance. The second phase is the bonus for proven viability. Important: the grant is not taxable, but the business profit and voluntary health insurance are your responsibility.
The turnover evidence phase 2 asks for is easier to produce when business money sits apart from private money: Kontist↗ is a business account for the self-employed with an automatic tax reserve, and sevDesk↗ builds the EÜR for your return from the same entries. Proof of activity then becomes a printout rather than a reconstruction.
I applied for phase 2 early with turnover statements and a client list — activity was proven and the 9 months of 300 € continued without a hitch. Those who prepare no evidence lose phase 2.
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Lea recommends:
The 300 € from phase 1 went exactly into my voluntary health insurance — plan for that at once. And do not forget the tax-registration questionnaire at the tax office: without it the business has not officially started.
FREQUENTLY ASKED QUESTIONS
How much and for how long?▾
Phase 1 — 6 months: your individual ALG I rate plus 300 €/month. Phase 2 — up to 9 months of 300 €/month with proven active work. Up to 15 months of support in total.
Is the start-up grant taxable?▾
The grant itself is income-tax-free — and unlike ALG I it is not subject to the progression proviso, so it does not raise the tax rate on your other income. Only the business profit is taxable — declare that.
What about insurance and pension when self-employed?▾
Health insurance becomes voluntary (voluntary public or private) — the 300 € helps with exactly that. Pension contributions are voluntary for most self-employed; plan this early so as not to fall out of the system.