How are social security contributions calculated and how to encode it?

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What are social contributions?

Unless you are independent in a complementary activity, you pay social contributions every quarter in order to get the minimum necessary health & pension service you need as a Belgian citizen. Your social contributions guarantee your social protection, which translates to: e.g. child benefits, and incapacity benefits.

In Belgium, paying social contributions is mandatory and cannot be avoided, unless specifically requested & agreed upon by your social security provider.

How are social contributions taxed?

Social contributions are themselves entirely deductible: they act as any other professional cost and decrease your profit, hence your income tax.

In other words, the more social contributions paid, the less income tax.

Important note, social contributions enter the computation of the profit for the year they are paid (or reimbursed), not the year for which they are due. If you need to pay social contribution for a previous year, you will see the impact of this payment on this year only, not the previous year.

For more information about social contribution, visit our blog article here

How does it work in Accountable?

In Accountable, every social contribution payment must be captured as a professional expense.

Social contributions is a category available to all Belgian users, under Taxes & Insurance.

What should I do with my regular quarterly payments for social contributions?

Make sure that every quarterly payment is saved in your list of expenses.
You don't need to attach a document for it to count against your taxes.

What happens when you are asked to make an extra-payment because you paid too little on a given year?

In the same way, simply add an expense for the amount to be paid that you received from your social counter (amount normally indicated in the regularization statement).

For example, if you receive a regularization statement dated November 8, 2023 (so in Q4 2023) for 2021 contributions, you need to enter it as follows:

→ The expense date must correspond to the date of the regularization statement:

→ For the VAT category and VAT declaration, select Q4 2023 :

What happens when you receive a reimbursement from your Social Security provider because you paid too much social contributions?

Very simple again, simply add a negative expense (a credit note) for the amount you received from your social security provider.

It will similarly enter your tax computations for the year when you received your refund and will be ready for your income tax declaration in Accountable.

What happens when the refunds received are greater than the total amount paid during the year?

When the total of your social security contributions paid and received during the year results in a negative amount (for example, because you received a refund of social security contributions from the previous year, and this amount is greater than the total paid during the year), your total contributions are negative. However, it is not possible to enter a negative figure in box XVII - 1632 of the IPP declaration on Tax on web.

You have 2 options:

1. Add the refunds to the taxable gross income (box XVII - 1600), and only indicate the social security contributions paid in box XVII - 1632. You must do this manually and remove the refunds from your deductible expenses in the app.

2. Add the negative amount indicated by the app for social security contributions to the amount reported in box XVII - 1600. And enter €0 in box XVII - 1632.

Author - Valesca Wilms

As content marketing lead at Accountable Belgium, Valesca writes about freelancing, self-employment, and taxes based on her own experience as a freelancer.

Who is Valesca ?