New contribution system for the self-employed (2023)

As of 1 January 2023, the new contribution system for the self-employed according to their actual income came into force. This means that this group, unlike in the past, can no longer freely pay contributions according to the amount and protection they choose, but must compulsorily pay according to the net annual income they declare for their activity.

1. What is my net income for calculating my self-employment tax?

For this it is necessary to take into account the annual net profit (income minus expenses) obtained from the self-employed activity. This calculation does not take into account your own social security contribution. A deduction of 7% for generic expenses is applied to this profit. For example, if in 2023 you obtain an income of 24.000€, and expenses of 5.000€ (remember that without taking into account the self-employed contribution itself), the net income would be 19.000€, minus the 7% generic expenses (1.330€), your net income would be 17.670€.

2. How much will I pay in 2023 based on my performance?

The contribution is calculated on the basis of this yield, according to the applicable bracket, with a choice between the minimum and maximum base allowed in each bracket.

3. Do I have to do anything or take any steps in this respect?

You should estimate the net yield that you expect to obtain in 2023 as explained in point 1, and divide it into the 12 months to find out the monthly contribution base. If this is between €0 and €1,700 per month, you do not need to do anything else for the moment. On the other hand, if the monthly contribution base exceeds €1,700, the actual contribution base must be communicated.

4. Flat Rate?

If you are already registered as self-employed on 31 December 2022, the flat rate will continue to apply under the same conditions until the end of this bonus.

For new self-employed workers who register on or after 1 January 2023, the flat rate quota has the same access requirements, but increases to €80/month (as opposed to the €60/month for those who registered up to 31 December 2022). And during the second year they will be able to continue enjoying this quota if they do not exceed the SMI in their monthly income, calculated in the same way as we have seen above.

5. I have a high income. Is there anything I can do to avoid this fee increase?

Unfortunately, there are few options to avoid it. One solution, which is by no means magical, could involve channelling the activity through a trading company in a legal manner, and assigning yourself a salary in line with the contribution you wish to pay. The rest of the profit would remain in the company, either to reinvest in the business, hire staff, delegate tasks, etc., bearing in mind that any distribution of the profit to the partners would also be considered as income for the purposes of calculating income and social security contributions, but at least we would have greater flexibility both materially and temporally to choose how much and when to make the contribution.

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