Any Belgian freelancer or self-standing company director needs to pay social security contributions on the net earnings derived from that professional status. The net income is the outcome of gross income minus deductible costs and/or previous losses (if existing). The reference year of calculation is always the year of income itself. Even if that year is not a full civil year. Legislator changed the law to that reference as from year 2015.
There’s a minimum contribution to be paid. It is 21,5% of the presumed net taxable income of 13.010 euro per year (reference income for year 2016). Taking into account the fee to be paid the appointed social security collector the minimum social security contribution is approximately 730 euro per quarter. Self-employed social security contributions cannot be lower than that amount. Even if there was a loss during the year.
Certainly for the starting independent (freelance or company director) the income as it will be completed in the tax return is not known. The starting independent needs to make a self-assessed prognosis of his net income. For the first year of independent activity the social security rate is a bit lower: 20,5% instead of 21,5%. It’s to some extent a complex calculation, because the result of social security to pay for is calculated on the net income after deduction of the concerned social security taxes. The result is part of the equation. Brussels Accountants can assist in the estimation at hand. A starting entrepreneur can opt for the minimum social security contributions. Being a bit lower compared to a freelancer being independent for more than 3 years. For the year 2016, the minimum levy is a bit less than 700 euro per quarter. It is preferred to pay more if your net income is presumed to end up higher than 13.010 euro per year.
This doesn’t only count for starting independents. Brussels Accountants can see to it that at all times your social security contributions remain in line with your estimated net income of the year at hand. And implement the required changes when necessary.
Social security contributions of a Belgian freelancer or company director (not a complementary basis) is calculated on a presumed minimum net revenue of 13.010 euro (reference for year 2016). Depending on the starting moment of self-employment the contribution is at a cost of 20,5% or 21% or 21,5%. This rate also counts for the threshold of net income between 13.010 euro en 56.182 euro. The threshold of net income between 56.182 euro and 82.795 euro is taxed at 14,16%. Any net income above 82.795 euro is exempt of Belgian social security.
Don’t hesitate to contact Brussels Accountants should you wish to receive additional information.