The obligation of self-employed persons to pay social insurance contributions from 1 July 2024 and 1 October 2024

From 1 July 2024, or from 1 October 2024 (where the deadline for filing the tax return was extended), new rules apply to the obligation of self-employed persons (SZČO) to pay social insurance contributions. This obligation depends on the income reported in the tax return for the previous calendar year.

WHEN DOES THE OBLIGATION TO PAY SOCIAL INSURANCE CONTRIBUTIONS ARISE?

A self-employed person becomes liable to pay social insurance contributions if their income from business or other self-employed activity has exceeded 12 times the minimum monthly assessment base. From 1 January 2024, this base is set at €652. This means that if a self-employed person reports income of more than €7,824 (12 x €652) in their tax return for 2023, they must pay social insurance contributions from 1 July 2024, or from 1 October 2024 where the deadline was extended.

A self-employed person whose income is equal to or lower than €7,824 will not be required to pay social insurance, and this obligation will end on 30 June 2024, or on 30 September 2024 where the deadline was extended.

NOTIFICATION OF THE OBLIGATION TO PAY AND OF THE AMOUNT OF CONTRIBUTIONS

If a self-employed person becomes liable to pay social insurance, the Social Insurance Agency (Sociálna poisťovňa) will notify them of this automatically within 20 days of the obligation arising (by 22 July 2024, or by 21 October 2024 where the deadline was extended). The notification will contain information on:

• the commencement, duration or termination of compulsory insurance,
• the amount of the assessment base and any change to it,
• the amount of the contributions the self-employed person will be required to pay,
• the due date of the contributions,
• the details for paying the contributions (account number, specific and variable symbol).

The notification will be sent in writing by post or to the electronic mailbox on the Central Public Administration Portal, if the self-employed person has activated it.

PAYING SOCIAL INSURANCE CONTRIBUTIONS

Self-employed persons who filed their tax return by the regular deadline will pay the new amount of social insurance contributions for the first time by 8 August 2024. Self-employed persons who filed their tax return within the extended deadline will pay the new amount of contributions for the first time by 8 November 2024.

CALCULATING THE AMOUNT OF SOCIAL INSURANCE CONTRIBUTIONS

You can calculate the amount of your monthly social insurance contributions yourself on the basis of your annual assessment base for 2023. The procedure is as follows:

1. Calculate the annual assessment base (RVZ) as follows:

RVZ = (income tax base + contributions paid to the Social Insurance Agency and the health insurance company) / 1.486

2. Divide the annual assessment base by 12 to obtain the monthly assessment base (MVZ):

MVZ = RVZ / 12

3. The contributions are calculated from the monthly assessment base at a rate of 33.15%, which is made up of the following components:

• Sickness insurance: 4.4%
• Old-age insurance: 18%
• Disability insurance: 6%
• Solidarity reserve fund: 4.75%

If your monthly assessment base does not reach the minimum amount (€652), you will pay contributions based on the minimum assessment base. If your assessment base is higher than the maximum (€9,128), you will pay contributions based on the maximum assessment base.

AN EXAMPLE OF CALCULATING THE MONTHLY CONTRIBUTION PAYMENT

Zuzana Malá is a vet who started her business in 2023. She filed her tax return by the regular deadline and reported a tax base of €15,000 in it. In 2023 she paid €932.47 in health insurance and did not pay social insurance. The calculation:

RVZ = (€15,000 + €932.47) / 1.486 = €10,721.71

MVZ = 10,721.71 / 12 = €893.40

Monthly contribution payment from 1 July 2024:

• Sickness insurance: 893.40 x 4.4% = €39.31
• Old-age insurance: 893.40 x 18% = €160.82
• Disability insurance: 893.40 x 6% = €53.60
• Solidarity reserve fund: 893.40 x 4.75% = €42.43

Total: €296.16 per month.

MINIMUM AND MAXIMUM SOCIAL INSURANCE CONTRIBUTIONS IN 2024

The minimum and maximum social insurance contributions depend on the amount of the assessment base:

• Minimum assessment base: €652
• Maximum assessment base: €9,128

Minimum and maximum contributions:

• Sickness insurance: €28.68–€401.63
• Old-age insurance: €117.36–€1,643.04
• Disability insurance: €39.12–€547.68
• Solidarity reserve fund: €30.97–€433.58

Total: €216.13–€3,025.93.

VOLUNTARY SOCIAL INSURANCE

Voluntary social insurance is suitable for self-employed persons who want to strengthen their cover in the event of retirement, maternity leave or loss of income. It can include sickness insurance, pension insurance and unemployment insurance. Self-employed persons register for voluntary insurance using the Individual Registration Form (Registračný list fyzickej osoby, RLFO).

CONCLUSION

Paying social insurance contributions is key to ensuring that self-employed persons are covered in a range of life situations. Understanding the calculation and setting your assessment base correctly will help you plan your financial obligations effectively. For further information and specific advice, contact the experts at our accounting firm.