Self-employed: how much you will pay to Social Security

Limits and exceptions in the calculation of the contribution

> Attention! The tax base limit is equal to 12 times the IAS value

Although in the example above the tax base coincided with the value of the relative average monthly income, this does not necessarily happen in all cases. This is because the maximum limit for each month is equal to 12 times the IAS value, equal to 480.43 euros in 2023.

Therefore the limit of the tax base is equal to 5,761.16 euros. Therefore, even if the relevant average monthly income/contribution base is, for example, equal to 6,000 euros, the contribution rate will only apply to 5,761.16 euros. In this case the amount to be paid to Social Security amounts to 1,232.89 euros.

> There is a minimum contribution of €20

Anyone who is self-employed and, in a given reference period, does not receive any income or the value of the contributions due for the relevant determined income is less than 20 euros, pays the minimum contribution, set at 20 euros.

> What happens if you accumulate independent and employed work?

Workers who accumulate independent income with dependents they are exempt if the quarterly income from self-employment is less than four times the IAS valueor €1,921.72. Furthermore, the exemption applies only if the self-employed worker meets the following requirements:

> The independent activity and the employed activity must be provided to different companies that do not have a control or group relationship between them;

> Dependent activity places the worker in a social protection regime that protects the social rights of self-employed workers;

> The monthly income obtained through employment must be equal to or greater than one time the IAS value.

And what happens if the relevant average monthly income exceeds the four IAS limit?

In this case the self-employed worker will have to make social security deductions. The tax base will correspond to the difference between the value of the relevant average monthly income and four times the value of the IAS.

> Example 1:

Joana works independently with dependents, where she receives more than an IAS (€480.43). In a given reference period, Joana earned an income of 3,000 euros.

Therefore, your relevant income will be 70% of 3,000 euros, i.e. 2,100 euros. Your average monthly income will be the equivalent of 2,100 euros divided by three, or 700 euros. Since this value is less than four IAS (€1,921.72), Joana does not have to pay social security contributions.

> Example 2:

Pedro works independently with dependents. For dependent activity, you receive more than one IAS. In a given reference period, Pedro earned an income of 12,000 euros from independent activity.

The relevant income will be equal to 70% of 12,000 euros, or 8,400 euros. Therefore, the relevant average monthly income will be equal to 2,800 euros (8,400 euros divided by three). Since this value exceeds the limit of four IAS, Pedro will have to pay social security contributions. The tax base will be the difference between the value of the relevant average monthly income and four IAS, i.e. €878.28 (€2,800 – €1,921.72.

The relative performance can be changed

Self-employed workers can set a relevant income higher or lower than that initially calculated. The adjustment is made in increments of 5% up to a limit of 25%.

For exampleif the worker has a significant income of 6,000 euros, he can set it up to a minimum of 4,500 euros and a maximum of 7,500 euros. In this case the intervals are €300 (5% of €6,000).

What are the payment methods?

> ATM

> Homebanking

> Direct debit, via direct social security

> In the coffers of social security institutions

> Cashier’s check, bank check and check issued by the Treasury and Public Debt Management Agency, sent by registered mail, to any Social Security treasury, to the order of the Social Security Financial Management Institute. It is necessary to indicate on the back the NISS, the NIF and the year to which the payment refers.