Adjusting your social security contributions when you’re self-employed

When you’re self-employed, you need to set aside a portion of your income every quarter to pay your social security contributions. It’s in your interest to estimate the amount as accurately as possible so you don’t pay too much or too little. But how can you increase or decrease the amount of your quarterly social security contributions? We answer that question in this article and take a look at the risks associated with a bad estimate. 

1. How are social security contributions calculated?
2. When should you adjust your social security contributions?
3. Decreasing your social security contributions
4. Increasing your social security contributions
5. How to adjust your social security contributions
6. Consequences of adjusting your social security contributions
7. Tips

How are social security contributions calculated?

Your social security contributions are calculated based on your net taxable professional income from three years ago. When you start out being self-employed, it’s of course difficut to make a good estimate, since you don’t know yet how much you’ll earn. That’s why you’re allowed to pay a provisional amount, which is then recalculated later based on your actual income. 

The formula for calculating your social security contributions when you’re self-employed is as follows:

20.5% of your net taxable professional income + admin fees from your social security fund

Let’s say your taxable income as a self-employed individual is €40,000 per year. You’ll pay around €8,440 in social security contributions per year, or €2,110 per quarter. The exact amount depends on the admin fees your social security fund charges.

If you’re self-employed in a secondary occupation, a self-employed student, an assisting spouse, or retired, click here to find out how your social security contributions are calculated.

💡 Accountable tip: Enter your actual taxable income in our app, and in just a few seconds, you’ll find out the amount of your social security contributions, calculated based on your actual taxable income.

When should you adjust your social security contributions?

You may want to adjust your social security contributions for one of two reasons: 

1. You pay too much in social security contributions
2. You’re not paying enough in social security contributions

In both cases, it is advisable to change the amount.

Decreasing your social security contributions

Decreasing your social security contributions is not a decision to be taken lightly, as it’s not without risk. Only reduce the amount if you’re certain you’ll earn less than expected.

• Your income must have decreased compared to three years ago.
• You must be able to provide reasonable proof of this.

The decrease can be justified by personal factors (e.g. having a baby, long-term illness, or accident) or by your activities (e.g. a client going bankrupt or losing an important contract).  

If it turns out that you set your social security contributions too low, you can still pay the difference until the end of the year. So in December, check whether your estimate matches your actual income. 

If you pay too little in social security contributions after decreasing the amount, you will have to pay a surcharge (a fine). At the end of the year, these can accumulate, and they’re not tax deductible.

Increasing your social security contributions

In principle, you can increase your social security contributions at any time.

If you’re sure that you’re currently paying too little in social security contributions, it’s wise to increase the amount.

• Your payments will be spread out more evenly, meaning you won’t have much extra to pay later (or much less in any case).
• Your quarterly contribution is 100% deductible. However, if you have to make additional payments later, these will not be deductible. It’s therefore in your best interest to estimate your actual income as accurately as possible.

Still unsure of your income for this year? It’s better to wait until the end of the year to increase your social security contributions.

Have you paid too much in social security contributions? The amount will be regularised after three years (when your social security fund knows your actual income). You’ll then be entitled to a refund. Be warned though, you’ll have to pay taxes on this refund.

How to adjust your social security contributions

To adjust your social security contributions, you need to submit a request via your social security fund. Often, you can simply log in to the web portal of your social security fund and do it yourself. You may have to search a little, but you can always reach out to your contact person for help. 

At Partena, for example, you can change the amount here:

You indicate the net amount you expect to earn this year and, based on that amount, you receive a new suggested quarterly social security contribution to pay.

After changing the amount, you’ll receive a confirmation of your request. Once the change is confirmed, you’ll receive an adjustment to settle the difference between your current amount and the new amount. The adjustment or modification of your social security contributions is free.

Consequences of adjusting your social security contributions 

By changing the amount of your social security contributions, you’re adapting them to your actual situation, which typically fluctuates. This means avoiding the consequences of a regularisation in three years.

• By decreasing your social security contributions, you avoid paying taxes on refunds from your social security fund in three years.
• By increasing your social security contributions, you avoid a major (and unpleasant) regularisation in three years.

💡 Accountable tip: If you’re a ‘primostarter’, you’re entitled to pay the minimum amount of social security contributions for three years. Your first regularisations might therefore come as a big shock. To avoid this, think about increasing your quarterly contributions when it makes sense to do so.

Your social security contributions also have an impact on your taxes. The more social security contributions you pay, the lower your taxable income. With this in mind, it might be worth increasing your social security contributions.

Tips for managing your social security contributions

In conclusion, it’s in your interest to estimate your social security contributions as accurately as possible.

• If you pay too much in social security contributions, you reduce your cash flow, and you’ll end up paying taxes on any refund.
• If you pay too little in social security contributions, you’ll have to make up the difference later and may find yourself having to pay a surcharge. 

To avoid the risks associated with paying too much or too little, think about checking your social security contributions regularly. Make sure they’re equal to 20.5% or 21% of your net taxable income. This way, there will be no surplus payments or major regularisations in the future.

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