- Artists' Social Security Fund provides social protection for self-employed artists and publicists.
- Agencies must check whether they have to pay levies for influencers/streamers to the KSK.
- The social security contribution applies to fees and remuneration paid to independent artists and publicists.
- Violations of artists' social security contributions can lead to back payments and fines.
- The obligation to pay royalties applies regardless of the status of the artist or publicist.
- Artists also work part-time, e.g. students or small influencers.
- Marketers should look into this to avoid problems during social security audits.
Recently, it has happened more and more that larger streamers but especially marketing agencies, influencer agencies or managers have to deal with the question whether the regulations of the Künstlersozialkasse are relevant for them. I know some providers who are facing these legal issues right now.
What is the KSK?
By implementing the Artists’ Social Insurance Act, the Artists’ Social Insurance Fund ensures that self-employed artists and publicists enjoy protection under the statutory social insurance system similar to that enjoyed by employees. It is not a service provider itself, but coordinates the payment of contributions for its members to a health insurance of their choice and to the statutory pension and long-term care insurance. Self-employed artists and publicists are entitled to the entire statutory benefits catalog. However, they only have to pay half of the respective contributions due out of their own pockets; the KSK tops up the amounts from a subsidy from the federal government (20%) and from social security contributions from companies (30%) that exploit art and journalism. The individual monthly contribution an artist/publicist pays to the KSK depends on the amount of his/her earned income.
What is the current problem?
Apparently, many influencer and marketing agencies are not aware that they must at least check and observe whether the influencers/streamers they represent, commission or manage provide artistic or journalistic services within the meaning of the Artists’ Social Security Act and whether this means that these agencies must pay artists’ social security contributions, for example. Many agencies do not seem to be aware of the problem and do not take these payments into account in their revenue calculations and other figures. Indeed, the social contribution for artists is levied on fees and remunerations paid to independent publicists and artists. User companies subject to the levy, such as agencies, must pay levies to independent artists and publicists in each calendar year. The artists’ social contribution is paid in monthly advances, the amount of which is determined by the KSK. In this context, proper declaration and payment of the artists’ social security contribution is verified by the German Pension Insurance as part of social security audits. Violations of the obligations will result in an obligation to pay arrears of for the last four years, with monthly interest on this sum and additional fines of up to €50,000.
Artists, quo vadis?
Whether a streamer, an influencer, etc. is an artist or an entrepreneur, whether one only buys coverage, is only an intermediary, or whether one participates in artistic or journalistic performances, whether the streamer is liable for trade tax, whether he can/may/would like to be a member of the KSK, this can be disputed in individual cases and it also depends on various circumstances. However, it is important to be aware as an agency and as a company hiring streamers/influencers that this duty might exist. However, this currently does not seem to be the case for many managers, agencies and providers.
This is especially true since the obligation to pay the levy exists as soon as the legal criteria for it are met. Neither the social security status nor the tax status of the artist or publicist are relevant for this purpose. An artist in the sense of the KSK is also, for example, if the artistic activity is only carried out as a sideline, e.g. by students or even smaller influencers or streamers. Moreover, it does not matter whether the artist has his permanent residence abroad or works abroad. The fees include everything that was spent to use the service, such as telephone costs or, of course, material and personnel costs.
The price to which the artist or publicist is entitled from the sale of his work by way of a commission transaction for his own performance is also part of the reportable remuneration. This also applies if the person liable for the levy has acted as the artist’s or publicist’s representative.
And therefore
Absolutely deal with the topic as a marketer, so that the next social security audit does not become a nightmare!
