The self-employed social status: obligations and rights

Belgium has a comprehensive social security system that provides various benefits. As a self-employed person, you are entitled to family benefits, healthcare reimbursement, sick pay, and a pension. However, these supports are not free; you are required to pay social contributions to access them. This article offers an overview of your rights and obligations as a self-employed individual.

While social security contributions are deducted directly from employees' salaries every month, self-employed people, whether sole proprietors or companies, have to pay their contributions themselves every quarter. Upon starting your activity, you must enroll in a social security fund to make your contributions.

How much social security contribution do you pay?

Each quarter, you must pay 20.5% of your taxable income (net income after deduction of business expenses).However, you must wait until your social insurance fund calculates your final taxable income for the current year. You will therefore be asked to pay an interim contribution based on your income from the previous three years.

For people who are self-employed as their main activity, a rate of

• 20.5% per year applies to the income bracket from 0 € to 72.810,95 €
• 14,16% to the bracket from 72.810,95 € to 107.300,30 €
• Beyond that, the maximum contribution is 4.952,48 €.

For a self-employed person starting, the social insurance fund will ask you to pay minimum contributions for the first three years because there is no income on which to base the 20.5% social security contributions. In addition, you can, under certain conditions, apply for the starter discount for the first four quarters. If you are interested in this benefit, please discuss it with your insurance company. This minimum contribution for people starting as self-employed on a main basis is approximately €870 (this amount may vary depending on the administrative fees).

Your social security contributions will be adjusted when the social insurance fund receives the information on your actual turnover. Do you think you earned more? You can decide for yourself to increase your provisional contributions for prevention.

Please note: in addition to the 20.5%, your social insurance fund will charge you an administration fee ranging from 3.05% to 4.25%.

Who pays social security contributions? 

All independent contractors must pay social security contributions, regardless of their status. This includes sole proprietors, corporations, self-employed individuals as either a primary or secondary activity, and assisting spouses or caregivers.

The calculation of your social contributions will depend on your status.

Self-employed as secondary activity

If you are self-employed as a secondary activity, you are already building up social rights as an employee through your employer. However, if you are self-employed in a secondary capacity, you must pay what are known as "solidarity contributions."This contribution is referred to as such because it does not grant you any additional rights beyond those acquired through your main activity as an employee or civil servant..

If you're self-employed as your main occupation, you are required to pay 20.5% of your annual net taxable income in social security contributions. However, the legal minimum for those who are self-employed on a secondary basis is significantly lower. Your provisional contributions will be calculated on an annual income of 1,815.41 euros. If you are starting, you pay a quarterly contribution of approximately 96 euros (this amount may vary depending on the administrative fees).

When do you have to pay social security contributions?

You pay your social security contributions to your social insurance fund every quarter. At the beginning of each quarter, the social insurance fund will send you a statement detailing your interim contribution. You have until the end of the current quarter to pay the full amount. The tax quarters begin on January 1, April 1, July 1, and October 1 each year.

If you pay late, you will be charged a 3% surcharge at the end of each quarter. If you have not paid the quarterly contribution by the end of the calendar year, you will be charged an additional 7%.

If you are facing a tough financial situation, contact your accountant and your social insurance fund immediately. Together, you can explore solutions such as a temporary exemption.

What are your rights? 

Social security contributions can be a significant financial burden for some self-employed individuals. However, they entitle you to certain rights in terms of contributions if you are self-employed on a primary basis.

1. Reimbursement of medical care

As a self-employed person, you have the same rights as employees for health care reimbursements, whether for the purchase of medication, a visit to a doctor or hospitalisation.

2. Sickness and incapacity to work benefit

Your mutual insurance company will pay you an indemnity in the event of illness or incapacity to work. Since July 1, 2019, you are eligible for indemnity from the first day of illness, provided the illness lasts at least eight days. The eight-day period begins on the date the incapacity is reported, which will be specified on the medical certificate.

3. Family benefits

As a young mother who is self-employed on a primary basis, you are entitled to 12 weeks of maternity leave and receive a weekly lump sum benefit. Self-employed persons are also entitled to take 20 days of paternity leave. You can also receive maternity aid, a birth bonus and family allowances.

4. A (meagre) pension

Your social security contributions also build up your pension entitlement. As is the case for employees, this pension will start at the legal age of 65. You may also qualify for an early pension under certain conditions.

Pensions for self-employed individuals or primary caregivers are granted based on the number of years they have worked. Only quarters with fully paid contributions will be considered for the pension calculation. Additionally, years of inactivity, such as those due to illness, will also be taken into account.

It's important to note that in Belgium, the pension amounts received by self-employed individuals are generally lower than those for employees. As a result, many entrepreneurs choose to save for their retirement through supplementary pension funds.

5. Protection in the event of a setback or bankruptcy

Natural disasters, debts or bankruptcy sometimes mean that you have to stop your self-employed activity. If you find yourself in this situation, you will, under certain conditions, receive a monthly indemnity and you will continue to enjoy your social rights for 12 months.

Company contribution 

The annual contribution required from companies is a fixed-rate social contribution designed to sustain the social security system for self-employed workers.

If you have a company, you must pay an annual contribution through your company in addition to your social security contributions as a self-employed person. The contribution amount is determined by the total balance sheet. 

This contribution does not confer any rights to the company or to the self-employed individuals working within it. It is a legal obligation for the company and does not affect the status of the managers or directors, who have their own legal obligations.

Deductibility of social security contributions

Your social security contributions are professional expenses that are fully deductible. They are calculated based on your annual net taxable income, which is determined by subtracting business expenses from your gross annual self-employed income, calculated before tax.

In summary

The social status of the self-employed has many exceptions. In addition, the rules are updated regularly. This article gives you an overview of the social security contributions system and the rights and obligations that arise from it for all self-employed people. Ask your accountant or social security fund if you have any questions on a case-by-case basis. They are always aware of the latest legislative developments and will provide you with more detailed information.