The obligation of self-insured persons to provide insurance arises from the day of commencement or resumption of employment and continues until its interruption or termination. When starting, interrupting, resuming or terminating any work activity, the self-insured person submits a declaration according to a form approved by the executive director of the NRA to the competent territorial directorate of the NRA, within 7 days of the occurrence of the circumstances. If the self-insured person does not submit a declaration for choosing the type of insurance within the 7-day period upon starting and resuming work, he is subject to insurance only for disability due to general illness, old age and death - only for the "Pensions" fund.
Kik.Info - Insurance and Tax Guide
Self-insured persons are artists, translators, writers, composers, seafarers, owners and partners in commercial companies, lawyers, pensioners who work and others. The insurance contributions for self-insured persons for 2023 are:
- For those born before 01.01.1960, for the "Pensions" fund - 19.8 %, for the "OZM" fund - 3.5 %, Health insurance - 8 % = 31.3 % in total
- For those born after 12/31/1959, for the "Pensions" fund - 14.8 %, for the "OZM" fund - 3.5 %, Health insurance - 8 % and social security (only UPF, without PPF) - 5 %. = 31.3 % total
The minimum insurance income is the National Insurance Income for the country, and the maximum is already BGN 3,400 minus 25 % NPR (legally recognized expenses)
For the period from 01/01/2023 to 07/31/2023: 710 BGN/ max. BGN 3400
For the period from 01.08.2023 to 31.12.2023: unemployment benefit BGN 780/ max. BGN 3400
EXAMPLES:
Since there is no way to know in advance exactly what income he will have in total annually, the self-insured person determines a monthly amount for insurance income, on which he pays monthly insurance contributions. Monthly advance contributions of self-insured persons are paid by the 25th of the month following the month for which they are due (for example, for February 2023 – by March 25, 2023). The final insurances are paid during the annual equalization of the insurance income for the relevant year on the difference between the actual income from work of the self-insured person and his advance insurance income. The annual equalization of incomes does not include those that are not from work - for example, royalties and license fees, subsidies to farmers, etc. The annual equalization is done through Table 1, which is an appendix to the annual tax return. The deadline for making the final insurance contributions is until April 30 of the respective year.
Example 1 – when the insurance income is below the maximum allowed
Let's say that the person anticipates an annual income of BGN 34,000.
BGN 34,000 / 12 months = BGN 2,833.33 is the average monthly income
(BGN 2833.33 x 25 )/ 100 = BGN 708.33 – this is the amount of legally recognized expenses (25% ), which we subtract from the total annual income or: 2833.33 – 708.33 = BGN 2124.67 is the insurance income or the amount on which we will charge insurance
The total insurance amount is = 31.30 % (for those born after 31.12.1959)
BGN 2,124.67 x 31.3 % = BGN 665.02 – monthly insurance amount
We need to calculate the VAT (profit tax), which is 10 % on the amount after deducting the insurances:
BGN 2124.67 (insurance income) – BGN 665.02 (insurance) = BGN 1459.65 tax base, on this amount we charge 10 % or (1459.65 x 10 ) / 100 = BGN 145.96 ADD
NET or the amount that remains net to the person monthly is BGN 2,022.35. Here's how it works:
2833.33 monthly income - BGN 665.02 insurance - BGN 145.96 tax = BGN 2022.35
Example 2 – when the insurance income is above the maximum allowed
Let's say that the person anticipates an annual income of BGN 150,000.
BGN 150,000 / 12 months = BGN 12,500 is the average monthly income
(BGN 12,500 x 25)/ 100 = BGN 3,125 – this is the amount of legally recognized expenses (25%), which we subtract from the total annual income or: 2,833.33 – 708.33 = BGN 9,375 should be the insurance income or the amount on which we will charge insurance. BUT, since the maximum insurance income for the country is BGN 3,400., all calculations are made on the basis of this amount, not the received BGN 9,375.
The total insurance amount is = 31.30 % (for those born after 31.12.1959)
BGN 3400 x 31.3 % = BGN 1,064.20 – monthly insurance amount
We need to calculate the VAT (profit tax), which is 10 % on the amount after deducting the insurances:
BGN 3,400 (insurance income) – BGN 1,064.20 (insurance) = BGN 2335.80 tax base, on this amount we charge 10 % or (2335.80 x 10 ) / 100 = BGN 233.50 ADD
NET or the amount that remains net to the person monthly is BGN 11,202.30. Here's how it works:
BGN 12,500 monthly income – BGN 1,064.20 insurance – BGN 233.50 tax = BGN 11,202.30
Self-insured persons pay the due insurance contributions to the relevant account of the competent TD of the NRA, and in the documents for their payment, the personal identification number, personal identification number or official number issued by the NRA is filled in. The minimum monthly amount of the insurance income for self-insured persons who do not exercise labor activity throughout the month is determined in proportion to the working days of the month for the period during which the activity was exercised. Self-insured persons who carry out activities on different grounds pay insurance contributions for one of the grounds of their choice. For example, if the person is a farmer, a sole trader and participates as a partner in an LLC, he is insured for only one.
© 2023 Iliana Dechkova