Self-employed workers and social security contributions: what's changing in 2019

2019 will see the launch of a new service specially dedicated to the self-employed.

It will enable them to calculate their monthly social security contributions.

To do this, you'll need to declare your income at each due date in order to immediately calculate the amount of social security contributions to be paid.

The entire process can be carried out online : declaration, calculation and payment will be carried out via a dedicated website.

This is still an experimental measure that will be applied throughout 2019.

This system will enable each self-employed person to pay only the amounts they actually owe.

By eliminating calculation discrepancies (between provisional contributions paid and regularizations made after the fact), freelancers will have better control over their cash flow.

The aim of this article is to present this measure, which will come into effect on January 1, 2019, and throughout the year.

How has the system worked up until now?

Until now, entrepreneurs paid their social security contributions on the basis of estimates made by the tax authorities.

However, in the event of a sudden and immediate drop in your income, you continue to pay your contributions at the same level as before, until the day of the new estimated calculation. This time lag can be a dangerous blow to a self-employed person's cash flow if they experience temporary difficulties.

An adjustment is made each year once the actual and definitive income is known, and once the social declaration for the self-employed has been sent in. The taxpayer can then pay additional contributions if the estimates were too low, or receive a sum from the tax authorities if the amount paid was too high.

With the forthcoming reform, you will no longer pay your contributions on the basis of previous income, but on the basis of income earned in the same month.

What is monthly modulation of social security contributions?

The monthly modulation of social security contributions means that tax can be paid at the same time as income.

In other words, you declare your income yourself each month via an online platform.

Your accurate declaration will serve as the basis for calculating your contributions.

You only pay the social security contributions you actually owe, down to the penny.

Gone are the days of random estimates and adjustments

This system was already in place for employees subject to the general social security system, since contributions were automatically deducted from their pay slips each month.

The aim of this approach is to standardize tax collection methods for different categories of worker.

What are the requirements and how can you benefit from this new system?

Self-employed people wishing to try out the new tax administration module can do so by registering for the online service.

If you decide to take advantage of it, you'll start using it the following month. For example, if you wish to benefit from it as early as January 2019, it is essential to register before December 22, 2018. Similarly, if you want to access it at the end of January, you'll need to apply before January 22, and so on.

They will be available all year round

If you do not declare your income for 1 month, you will automatically be obliged to pay the same amount as the previous month.

After two months of non-payment, you will be removed from the scheme and will be liable for all outstanding contributions.

The monthly amount due will be equal to the amount paid during the last month of use of the service.

If you wish to leave the scheme, you can do so at any time. You will revert to the old direct debit method the following month.

In this case, you will pay monthly contributions equal to those of the month prior to leaving the scheme until the next estimate.

This new reform is being implemented on an experimental basis to facilitate cash flow management for the self-employed.

By paying a monthly tax corresponding to the income earned in the same month, they can more easily cope with the upheavals caused by a sudden fall or rise in their business.

Gone are the estimates and then the sometimes complex procedures for regularizing each individual situation.

This measure simplifies tax collection management for the tax authorities, as well as the process for taxpayers.