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If an hourly wage has been agreed upon for a craft service, as a craftsman, you must include certain information on your invoice to comply with the requirements of German law. This serves transparency and traceability for the customer.
What are the absolutely necessary details?
The essential points that must be listed on an invoice based on an hourly wage are:
- Services Provided: A precise description of the work performed must be included. This should be detailed enough so that the customer can understand which activities were carried out as part of the agreed service.
- Working Hours: The actual hours worked must be listed precisely. This means that the exact number of hours worked as well as the date and time when the work was performed should be provided.
- Hourly Rate: The agreed hourly wage must be clearly stated. This rate should be easily recognizable by the customer.
- Calculated Total Amount: The number of hours worked multiplied by the hourly rate results in the amount charged for the labor. This total amount should also be clearly visible on the invoice.
- Additional Costs: If there are material costs or other additional expenses (such as travel costs), these must also be itemized on the invoice.
- VAT: The invoice amount must include VAT, and this should be itemized separately so that the gross and net amounts are clearly visible.
- If you are exempt from charging VAT under the small business regulation according to § 19 UStG, you should also note this.
These details are required to issue a correct and transparent invoice, allowing customers to understand the service provided and the resulting costs.
And what if customers refuse to acknowledge the invoice?
When payment based on an hourly wage is agreed upon, disputes often arise over how detailed the billing must be. For instance, the Federal Court of Justice in a ruling dated February 1, 2023, Az. VII ZR 882/21, made the following statement:
"According to the case law of the Federal Court of Justice, the contractor, in order to substantiate a claim for compensation based on time expenditure, must initially only present and, if necessary, prove how many hours were incurred for the provision of the contractual services with which hourly rates." In contrast, a detailed breakdown of a time-based contract does not generally require a differentiation in such a way that the billed hours are assigned to specific tasks and/or broken down into time segments."
This means that you do not need to provide a detailed description of each task for every billed hour. You only need to present and, if necessary, prove how many hours were incurred for the services with the respective hourly rates.
If you want to learn more about how to create a correct invoice, check out our article "How to Create a Correct Invoice?"
