Freelancers will be obliged to pay double social security contributions reaching even up to 50% of their income. As of 1. January 2017, freelancers who are also in also in employment contract will have to pay two times social security contributions.
Once for their work as employees and once for their business activity as freelancers (blokaki) and thus from the very first euro of their income. Until now, an employee pays social contributions to insurance fund for employees IKA (26.5% total paid by employee and employer) and is exempted from contributions to self-employed fund TEVE/OAEE if he has an additional business activity as self-employed or freelancer.
This has been a relief for many low-paid employees in times of the economic crisis to improve their income. This practice will end by the end of the year, and if ones takes into consideration other factors like over taxation of self-employed and freelancers as wells as 100% payment of taxes in advance, the new policy cannot but aim to crack down any business activity and introduce flat incomes for all.
According to the new policy social security contributions will be
- 16% of the income employee contribution to IKA
- 26.95%* of the income from the first euro self-employed/freelancer
- 42.95% of income for social security contributions alone!
The new poll tax may reach up to 50% of the income as some employees funds take up to 22% from the employees.
Tax for freelancers and self-employed is at 29% from the very first euro.
Trade fee is 650 euro per year.
Social security contributions cannot be deducted from the annual income for freelancers.
Self-employed, freelancers: 26.95% is 20% for pension and 6.95% for health
IKA contributions for employees: 16% paid by the employee + 25% paid by employer = 41%
As usual, the ‘measure’ will hit the low-incomes of up to 12,000 euro annual income who will have to pay 50%-86% of their income in taxes and social contributions.
Those victims of the crisis who might get a low-paid job of 400-500 euro for a couple of months -or even for less time and less money – and are honest enough to register as freelancers hoping to get a work contract here and there, just to make a living through the year.
The victims of austerity and state revenues collection measure are always the same: the vulnerable ones, the low-incomers, the voiceless.
Greek occasional employee with occasional freelance activities
PS I hear in countries that want to leave the European Union, (call me UK), annual income up to 11,000 GBP is tax free and social security contributions are 8% to be paid in equal parts by employees and employers. I also hear, that the state applies the same tax rates to annual income whether it comes from employee work and self-employment.