Start-up reduction on social security contributions for self-employed persons

The start-up reduction was part of the 'Summer agreement' and took effect on 1 April 2018. With this initiative, the government intends to reduce the financial burden of self-employed persons in start-ups, who often have low incomes at the start of their activity, thereby stimulating entrepreneurship. 

Which self-employed persons are eligible? 
The reduction measure applies to all self-employed persons in start-ups who are in their first to fourth quarter of activity on 1 April 2018, these being:

  • All persons self-employed as their main profession
  • All persons self-employed as their secondary profession who amend the link to main profession
  • All student-self-employed persons who amend the link to main profession

An additional condition is that the starter has not been self-employed as their main profession during the 20 quarters prior to the start-up reduction. 

What is the amount of the start-up reduction? 
Social security contributions are normally calculated on the basis of the annual taxable income. As a starter, you pay a minimum contribution of €715.64 per quarter for the first three years.This contribution is fixed at a flat rate, as the income of a starter is often difficult to determine. As soon as the social insurance fund receives the actual income via FPS Finance, the self-employed person receives a final settlement. In most cases, this final settlement will take place after around two years. The final statement is calculated on the actual income, with a minimum of €369.56 per quarter. If it appears that insufficient provisional contributions have been paid, additional payments must be made. If, on the other hand, too much has been paid in contributions, it will be reimbursed.As such, starters automatically benefit from the reduction if their income is low enough. 

A starting self-employed person who wishes to benefit immediately from the reduction measure can have the provisional quarterly contribution reduced to one of the following amounts:

  • €369.57 if the estimated net professional income does not exceed €997.55, or
  • €477.10 if the estimated net professional income is between €6,997.56 and €9,033.67.
  • If the estimated net professional income exceeds €9,033.67, there is no reduction and the starter generally pays the ordinary minimum contribution of €715.64.

Note that if in this first year the starter - unexpectedly - earns much more and applies for the start-up reduction without being eligible, then not only do they need to repay it, but the government will also charge a fine. 

How can you apply for the start-up reduction? 
The start-up reduction can be applied for in writing to the social security insurance fund, and must be justified.

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