The insurances you need as a complementary self-employed

“The complementary self-employed have the same obligations as the full-time self-employed but do not have the same rights”: you have probably heard this more than once.

That is exactly why it might be in your best interest to buy the insurances you need. They improve your social and financial security. As long as you are able to deduct the insurance premiums, you lower your tax rates as well. 

We tell you here more about the insurances that might make sense for you, as a complementary self-employed.

As you may know, the social contributions that you pay, up to 20.5% of your self-employed income, are also called “solidarity” contributions: your main occupation grants you social cover. The social contributions you pay as a complementary self-employed do not guarantee you any additional rights, except in a handful of cases.

Still, under specific conditions, you can improve your lifestyle in retirement thanks to your side business…

PSPS, PASE for the complementary self-employed

PSPS stands for ” Private Supplementary Pension for the Self-employed”, i.e. a tailor-made pension supplement for the self-employed. In order to build it up, you pay a maximum of 8.17% of your net taxable income each year, with a minimum of 100 euros and a maximum of 3,256.87 euros (in the tax year 2020).

As a complementary self-employed professional, you can opt for a PSPS if and only if you pay social security contributions equivalent to those of a full-time self-employed person.

📌 If you start as a self-employed person and only pay provisional contributions, you will not be able to conclude a PLCI.

If you are in a position to contribute to a PSPS, do not hesitate: the premiums you would pay annually are 100% deductible!

If you pay social security contributions equivalent to those of a full-time self-employed, you can also opt for a PASE, or Pension Agreement for Self-employed Persons. The premiums you pay for this are not tax-deductible. However, they do give you a tax advantage of 30%.

📌 Even voluntarily paying higher social security contributions than the ones you owe, will not give you access to the PASE.

Protect yourself, your customers, your equipment

When working as a self-employed, you are your own boss. You bear all risks. Insurances might make sense, especially in some cases:

• Imagine that you inadvertently cause damage to a client: your professional liability insurance would come into play in this case.
• If you were to cause harm to a third party (who would not be your client), you would then need liability insurance.
• If the technical equipment in which you have invested is damaged or stolen: you would be all the happier to have insured it since insurance for technological equipment, within the limits of professional use, is 100% deductible!

Depending on your sector of activity, certain insurances are quite naturally necessary. Take the time to ask yourself the question and subscribe as needed: within the limits of professional use, these insurances are deductible today and protect you “just in case”.

At Accountable, we do not sell insurance. Our only mission is to help the self-employed face their bookkeeping & tax obligations. Our app could even do it all for you, give it a try here!