Being self-employed means more than just being your own boss. You are responsible for your own productivity, plan your own diary, manage your own projects and not in the least you arrange your own taxes and social security contributions. But how do you tackle the latter? How do you navigate the oftentimes complicated social security contributions in Belgium as a busy freelancer? That’s what you’ll learn here.
- How does Belgian social security work for freelancers?
- What is the calculation of how much I will have to pay?
- How do I register at a social security office?
1. How does Belgian social security work for freelancers?
Social security in Belgium for the self-employed are usually calculated each quarter, meaning you will receive an invoice each March, June and October. If you start your business in the middle or at the end of a quarter, you will owe a contribution for the entire quarter.
Tip: Start your business at the beginning of the quarter as you’ll owe social security contributions for the entire quarter no matter when you start.
Why you need to pay social security contributions as a freelancer in Belgium
Your social security contribution is necessary for you to acquire social benefits that you would otherwise receive from your employer:
- Child support, maternity support, etc.
- Pension plan
- Reimbursement for medical care
- Financial benefits in case of illness, invalidity or other incapacity withholding you from practicing your job
- Financial benefits in case of bankruptcy or forced cessation
Be aware that even if you pay these social security contributions, the benefits you get from them in Belgium are minimal. Be sure to get additional insurances to make sure that you are covered in cases of, for instance, illness, pregnancy, the inability to work or when you retire.
You can be exempt from having to contribute to social security under certain circumstances. Please note that you will not build any social rights in Belgium if you are exempt.
- Your annual income is too low
- You are a student-entrepreneur
- You are unable to pay due to financial difficulties
Chances are that you have no right to social security in Belgium for the self-employed because you're self-employed part time and your yearly wages are too low. In that case, you'll enjoy social security benefits courtesy of your employer and you won't need the additional social security.
Make sure if you are exempt from paying social security contributions as a freelancer or any other type of entrepreneur, that you have back-up plans in place like extra insurance.
2. How do I calculate how much I will have to pay?
Whether you’re in IT or a different sector, social security as a freelancer works the same for all entrepreneurs in Belgium.
The big difference lies not in what you do, but how you do it. Your taxes and social security contributions are calculated based on these 2 factors:
- Company status: full time vs. part time
- Company form: sole proprietor vs. partnership vs. limited liability company vs. corporation vs. assisting spouse
Your company status
In Belgium, there are 2 main statuses for your company: full time and part time.
You are considered to be a full time entrepreneur when your business is your only source of income or you have an employer for fewer than 20 hours per week. For a full time entrepreneur, the minimum contribution per quarter is €698.05 (£600.97) and the maximum is €3,977.09 (£3,423.76).
You are considered a part time entrepreneur when you have a contract with an employer that is at least half time, meaning at least 20 hours per week. In that case, you will have to pay a minimum of €75.39 (£64.90) per quarter and a maximum of €3,977.09 (£3,423.76), depending on your yearly income.
Tip: Make sure you and your employer are on the same page about you working as a freelancer. Some employers might bar you from, for instance, freelancing in IT on your own time (especially if your freelance services match theirs), while others won’t object at all.
Link to 3 types of insurance every freelancer needs
Your company form
Your company can take many forms under Belgian law, the most prominent of which are sole proprietor, partnership, limited liability company, corporation and assisting spouse.
As a sole proprietor or assisting spouse, you’ll pay personal taxes in lieu of company taxes on your entire income. Your social security contribution will then be calculated on what remains after taxes (as you’ll see below) and will solely contribute to your own social rights.
Companies like limited liability companies or corporations, however, will owe not only the traditional social security contribution we’ve talked about so far, they’ll also owe a company contribution. The latter not only builds rights for the people in the company itself, it contributes to the benefits of all working entrepreneurs in Belgium.
The company contribution is quite a limited one, though, at €347.50 (£298.94) for a yearly income lower than €700,246.09 (£602,383.20) and €868 (£746.69) for an income higher than €700,246.09 (£602,383.20).Tip: Ask around and gain the advice of a social security expert to make sure you choose the right form for your company. Some of them might be better suited for you than others, but you can change the form you’ve chosen as your business grows or changes.
Calculation of your social security contribution in Belgium
Your social security contribution will be calculated on a set percentage of your net taxable income from your enterprise in the year you are in.
The calculation looks like this:
Gross annual income
- Business expenses
- Paid social security contributions
- Possible contributions to supplementary pensions
- Possible losses carried forward
= Net taxable income
Your contribution will usually be about 20.5% of your net taxable income, although it varies per bracket based on very high or very low incomes:
Dit zijn 3 kaartjes
Income Bracket below between €1,531.99
- Contribution rate: Exempt
- Max. contribution amount: €0
Income Bracket between €1,531.99 and €59,795.61
- Contribution rate: 20,50%
- Max. contribution amount: €12,258.10
Income Bracket over €88,119.80
- Contribution rate: Exempt
- Max. contribution amount: €0
Tip: ask your social security agency for a table showing you exactly where you land in the income scale to be sure of how much contributions you will have to pay as a freelancer.
Part time entrepreneurs pay far less in contributions than full time freelancers since they earn less per annum. Your social security contributions as a freelancer are calculated on your income as a freelancer over the last 3 years to make sure they are realistic. But what happens when you’ve just started your business?
When you’ve only just started your business, you will not yet have an income on which your social security agency will be able to calculate your contribution. They will estimate how much you could realistically earn over the next year and base their calculations on that fictitious income. If they are off, you will be reimbursed if you paid too much or receive an invoice if you paid too little.
3. How do I register at a social security office?
Belgium has a number of social security agencies or offices to guide you every step of the way. These agencies calculate your social security contributions for you, but they also help you with any other questions you might have.
Registering at a social security office is very easy. The hardest part, we dare say, is finding the perfect social security office for you. These are the best-known offices in Belgium:
How to register
Once you've found the perfect social security office, registering is quite easy. This is how you register at a social security office in Belgium:
- You need to be at least 18 years old and possess the right status or visa to be self-employed in belgium.
- Register at a social security office before registering your company number BUT if you don't yet have a company number, your social security office can arrange it for you:
- You can register up to 6 months before starting your business. Make sure you're on time, because late registration requires extra steps and can land you fines!
- Give an official start date for your self-employment.
- Look at your income over the last 3 years or estimate how much you will make from your business in the coming year as a basis on which to calculate your contributions.
- Formalities to help your start
- Assistance in licenses, permits and NACEBEL-codes
Tip: Most social security offices provide guided workshops on how to run all parts of your business and can help you get in touch with people you might need to run your business, such as accountants. Here are just some of the agencies that can help you start a business as a freelancer in Belgium:
Link to Your company registration number: registering at the Crossroads Bank for Enterprises
Link to The what, why and how of your VAT number in Belgium