How to understand changes in social and health insurance in 2022?
Have you heard about the increase in social and health insurance advances for self-employed? No? So keep reading to avoid possible penalties.
As prices for most goods rise every year, our wages also increase. And as a result of the increase in this average wage, the advances on social and health insurance, which are calculated from this amount, must also increase. In 2022, the average wage will reach a record amount of CZK 38 911, which is why the advances will also increase.
In 2022, advances on social insurance will increase by CZK 253 to a total of CZK 2 841 (originally CZK 2 588). You must pay the new amount no later than the month in which you submit your income and expenditure statement for 2021. To put it concretely, most self-employed persons submit their statement together with the tax return at the end of March or at the beginning of April at the latest, in which case they are obliged to pay increased advances from April.
For health insurance for 2022, advances will increase by CZK 234 to a total of CZK 2 627 (originally CZK 2 393). Regarding the payment for health insurance companies, these advances are paid from the beginning of the new year. The due date is then always by the 8th day of the following month. These advances work retroactively, so be sure to pay the first increased payment by 8th February.
FLAT TAX FOR SELF-EMPLOYED
Finally, there is a novelty of 2021 – a flat tax. By choosing this option, self-employed persons with an annual income of up to CZK 1 million can pay one flat tax payment, which includes income tax, social and health insurance. This payment for 2022 should amount to CZK 5 994 (CZK 3 267 social insurance, CZK 2 627 health insurance and CZK 100 income tax). The flat tax for 2022 can be registered until 10th January.
And here is one small tip – most self-employed persons pay advances through a standing order from their bank account. If you are one of them, do not forget to change the order in time, so that you do not have to pay penalties.