Social insurance contributions for sole traders rise every year. Unless a new sole trader is exempt, their health insurance advance payments amount to €66.78 a month. The good news is that flat-rate expenses have become more favourable than last year. The key tax and contribution figures are set out in the article below. Higher contributions for sole traders

Sole traders’ contributions are now as follows:

Social Insurance Agency – minimum monthly contributions for 2019 are €158.11 (an increase of €6.95 on 2018) health insurance – contributions are €66.78 (an increase of €2.94 on 2018) When a trade licence is first set up, only the health insurance advances of €66.78 are compulsory. Social insurance contributions become payable later.

Social Insurance Contributions

As before, new sole traders do not pay minimum social insurance contributions. So if you want to set up a new business in 2019, the minimum monthly payment of €158.11 does not apply to you until 30 June of the following year. Likewise, a sole trader who held a trade licence last year does not pay social insurance contributions if they earned no more than €5,724 last year. A sole trader who already held a licence last year and paid social insurance contributions in 2018 continues to pay them from 2019, now at €158.11; the first payment had to be made by 8.2.2019. A sole trader who earned more than €5,724 in 2018 must start paying social insurance contributions of €158.11 from 1.7.2019. For new sole traders who were not obliged to pay social insurance contributions, the income threshold for the previous year above which contributions become payable has risen from €5,472 to €5,724.

Tip: keep your income from your trade below the threshold for social insurance contributions, particularly if you combine a trade licence with employment, as there is no annual reconciliation mechanism to take this double payment into account.

Do not want to pay social insurance contributions? Form an s.r.o. through eTuls s.r.o.

Health Insurance

Every sole trader pays monthly health insurance advances of €66.78, except those who are also insured by the state, such as students, pensioners or women on maternity leave. Income tax in 2019

In March 2019, a tax return for 2018 must be filed if the taxpayer’s total income for 2018 did not exceed €1,915.01. However, if the taxpayer’s taxable income in 2019 does not exceed €1,968.78, there will be no need to file a tax return for 2019 in 2020.

Tax rates for sole traders:

• 19% on the tax base up to 176.8 times the subsistence minimum, i.e. up to €36,256.37 • 25% on the portion of the tax base exceeding 176.8 times the applicable subsistence minimum, i.e. above €36,256.37.

The rules on occasional income are also changing. Under the new legislation, expenditure of up to €500 for occasional work is no longer a tax-deductible cost. Under the old legislation, one-off income of an individual of up to €500 a year, received under a mandate contract, an agency contract or another unnamed contract, could be exempt from tax. It is no longer the case that a sole trader or company could treat such a one-off expense as a cost without having to employ anyone. Under the new legislation, work carried out on the basis of a contractual relationship will no longer be regarded as occasional activity.

Flat-Rate Expenses

In 2018, they are capped at €20,000 a year, which is 60% of the self-employed person’s income (regardless of the number of months in business), and they could be claimed at this level for the first time for 2017.