Your family allowances as a student self-employed
Are you a (higher education) student and ready to start as an entrepreneur? It is possible, there is even a status tailored for you: student-independent.
This status is particularly advantageous, provided that you pay attention to certain income thresholds and hours worked. Beyond these thresholds, you and your parents may be surprised by the taxes and the family allowance fund …
Will your parents still receive child benefit?
In short, there is one amount to keep in mind: €6996.89 in income per year.
If your income is less than € 6996.89 per year (the amount for 2020), you do not pay social insurance contributions. Your parents will continue to receive child benefit. The reasoning behind this decision is as follows: because you do not have to pay social insurance contributions due to your income level, you probably work less than 240 hours per quarter.
NB: Your income is your gross income minus your professional expenses. In our app, it is the total amount of your bills, minus all your expenses.
If your income is more than EUR 6996.89 a year and you work less than 240 hours a quarter, your parents may also still be eligible to child benefit. You pay social insurance contributions of 20.5% of the income between EUR 6996.89 and EUR 13993.78 (amounts valid in 2020).
Note that child benefit has become a regional matter since 1 January 2020. In Brussels, Flanders or Wallonia, differences are possible.
In Flanders, for example, 80 hours per month are mentioned instead of 240 hours per quarter: a student who works more than 80 hours per month loses the benefit for that month.
In Brussels, a self-employed student who works more than 240 hours per quarter does not receive child benefit for that quarter.
In Wallonia, it is also the limit of 240 hours per quarter and, of course, the fact of paying social security contributions that are decisive.
🔖 This limit of 240 hours per quarter does not apply to the third quarter. From July to September, i.e. during the student holidays, you can work more than 240 hours as a self-employed student without any impact on the family allowances your parents receive! This only applies if you return to school after the summer.
If you earn and pay social contributions as a full-time self-employed, you will no longer receive child benefit.
What is the impact on your parents’ taxes?
Parents pay more or less tax depending on whether they have one or more dependent children. What determines whether a child is dependent is, on the one hand, whether the child lives in the same place as his or her parent(s) on 1 January of the year in question and, on the other hand, the income of the child(ren).
If the child is dependent on both parents, who are married or legal cohabitants, his or her income ceiling is 3380 euros net, i.e. 4225 euros gross. To this amount may be added the remuneration received by the student up to 2820 euros per year, within the framework of a student employment contract. In total, a student may remain fiscally dependent on his parents up to 7045 euros gross.
If the child is dependent on a single parent, the child can earn up to 4880 euros net, or 6100 euros gross. When added to the potential 2820 euros earned under a student employment contract, this represents a total of 8920 euros gross. Any alimony or maintenance payments count as income for the student and are therefore added to the other amounts above. Please note: in this case, the first 3380 euros are not included in the calculation.
Ready to start as a self-employed person? Start with Accountable: you will always see your income, in real-time, and our team is available to guide you and help you find your way!