Independent Workers and Social Security - How to calculate the Contribution?
Self-employed workers must fulfill certain obligations relating to their professional activity, namely contributions to Social Security.
Calculation of Social Security for Independent Workers
Starting in 2019, the brackets are no longer in use, and the contribution rate is applied directly to the relevant revenue (80% in the case of production and sale of goods, or 70% of the relevant income from the preceding quarter). In order to strengthen their rights, self-employed people can request a 25% discount on the amounts reported quarterly or contribute more money.
The new contribution rate for independent workers is 21.4% (it was previously 29.6%). The rate for sole proprietors and shareholders of limited liability individual firms is 25.2% (down from 34.75% previously). The rate of 28.3% for agricultural producers who earn their entire income from farming no longer applies.
Quarterly Income Statement
Since 2019, self-employed workers must now file a declaration detailing their earnings from the previous quarter. Based on this assertion, the amount of social security that independent workers will be required to pay in the upcoming three months will be determined.
The final day of January, April, July, and October is the due date for the quarterly income statement. On the Social Security Direct website, you can find instructions on how to fill out and submit the quarterly income tax return.
For self-employed workers, filing an income tax return with Social Security is not required:-
With organized accounting;
With exemption from payment of contributions for accumulation of activity with a disability or old-age pension;
With incapacity for work equal to or greater than 70% resulting from professional risk;
With relevant income determined based on taxable income;
Who has not been obliged to submit a quarterly return on income obtained in the previous calendar year.
Social Security Exemption for Independent Workers
In certain situations, self-employed workers are exempt from paying Social Security contributions:
The first year of activity;
Pensioners due to a disability, old age, or resulting from professional risk;
Suspension of activity;
Unavailability for work due to parental leave;
Temporary disability due to illness.
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(Author)
Raj Don
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