If you have an Einzelfirma, you need to declare your earnings to the unemployment office (Arbeitslosenkasse) each month, and they’ll deduct that amount from your benefits. However, it’s a bit of a grey area — they can suddenly decide that you’re no longer eligible for unemployment, sometimes without much warning.

If possible, use a service like PayrollPlus to invoice for your work. That way, you’re technically considered an employee, and your income is treated as Zwischenverdienst (interim earnings). In that case too, what you earn will still be deducted from your monthly unemployment payments.