Note: This information is a translation of information provided in this article: https://www.port41.at/artikel/sva-vorschreibung-so-berechnet-die-sva-die-beitraege
*Because this is an unofficial translation, provided purely to help people, please understand that the translation is not perfect.
SVS levied fees: How the SVS calculates the contributions
The annual SVS regulations can especially be difficult for new entrepreneurs to understand. Nevertheless: The levied fees are calculated on the basis of specific rules. Here is how you can understand them.
The SVA distinguishes among different groups of contributors. Each of these groups is assigned its own contribution base. The amount of the contribution is derived from this contribution base.
IMPORTANT NOTE: On 1 January 2020, the SVA and SVB merged to become the SVS (Sozialversicherung der Selbständigen). The information in this article applies to entrepreneurs, freelance professionals and new self-employed persons, as well as former SVA/SVB-insured persons. We are working on completing the information for all SVS-insured persons.
Basic information: your income tax assessment
As a general rule, self-employed persons are required to invest about 27% of their annual profit into pension and health insurance. However, the SVS needs to receive your income tax assessment (from the tax authority / Finanzamt) to calculate the exact amount.
So long as the income tax assessment for the contribution year is not available, the SVS will calculate the contributions to be paid on the basis of the third preceding year. However, these contributions are not set in stone. If the levied contributions do not correspond to your current situation, you can have them adjusted.
You can read a related article (in German) on how to make your SVS contributions fit your current situation (https://www.port41.at/artikel/so-gestalten-sie-ihre-sva-beitraege-flexibler).
In the case of start-ups, it is not yet possible to refer back to earnings from previous years. Therefore, in the first three years, these start-ups will initially only be charged the minimum amount. Once the income for the respective year has been determined (i.e. the income taxes have been filed and an assessment has been made for that year), the start-up will receive an invoice for the adjusted income (this is called a Nachbemessung). This can lead to (unpleasant) surprises if you are not familiar with the system. However, you can do something about this at an early stage.
You can read a related article (in German) on the advantages you receive from SVS as a young entrepreneur (https://www.port41.at/artikel/welche-vorteile-sie-als-jungunternehmer-bei- der-sva-herausholen-koennen).
What is included in the SVS contribution?
- Contributions for pension insurance
- Health insurance contributions
- Contributions for the provision for self-employed persons
- A contribution for accident insurance
- Any subsequent payments or credits for previous years
Different groups of insured persons
The SVS distinguishes among different groups of contributors:
- Tradespeople and trade partners, that is, those who have a trade licence (Gewerbe);
- new self-employed persons who work without a trade licence;
- Freelance and independent professionals (Freiberufler) are also the self-employed. These include doctors, pharmacists, civil engineers and patent attorneys.
Each of these groups is assigned a unique contribution base from which the amount of the contributions is derived.
What is a contribution base?
- The contribution base is the amount upon which your contributions are calculated. This amount depends on how much you actually earn.
- The minimum contribution base is a minimum value that must be used to calculate your contributions – even if you earn less than this amount.
- The maximum contribution base is the maximum value that can be used to calculate your contributions – even if you earn more than this amount.
The minimum and maximum contribution base are adjusted each year. You can find the current values on the SVS website.
If you have just become self-employed
As already mentioned, the SVS calculates contributions on the basis of the minimum contribution base for the first three years.
In the first three years, this results in (values for 2020):
- a monthly contribution of 126.63 EUR for newly self-employed persons
- a monthly contribution of 154,72 EUR for people with a trade license
These amounts also include the fixed amount of 10.09 EUR for accident insurance, as well as the contribution to the provision for self-employed persons. When calculated on the basis of the minimum contribution basis, the latter amounts to 7.05 EUR (values for 2020).
ATTENTION: If your profit is above the minimum contribution base during the first three years (you can find the current values on the SVS website), you will have to make additional payments (this is the ‘payment adjustment / Nachbemessung’ mentioned above)!
In this related article (in German), you can read some helpful tips for new self-employed persons and how to avoid back payments (https://www.port41.at/artikel/welche-vorteile-sie-als- jungunternehmer-bei-der-sva-herausholen-koennen).
*Basically, this article states that it is possible to make additional payments in instalments. If you have received an adjusted invoice for one or more of the first three years of self-employment (because your earnings exceeded the minimum contribution base), you can apply to make these payments in instalments: An informal application is sufficient, and you have three years to pay the outstanding amount in 12 quarterly instalments.