Options for very low income self employed
Oct 21st 2019, 11:56 am
#16
BE Enthusiast
Joined: Nov 2010
Posts: 878
Re: Options for very low income self employed
Just an update for anyone who might find this useful in the future: after a lot of reading and consulting accountants, I can summarise...
For any self employed activity* you either need to be on KATA (50,000HUF/month) or the private entrepreneurs taxation of around 40-50% when tax and social security is added up. However, the important thing (that is not made clear - perhaps it's deemed to be obvious, but coming from the UK where it's very different, it wasn't obvious): for the private entrepreneur's taxation, the minimum tax base is (in simple terms) the minimum wage, so even if you're making no profit, you're still paying out around 70,000-80,000 HUF a month in income tax & social security. This is why KATA is cheapest for low levels of self employed income.
Other KATA notes;
-it allows you to earn 1m HUF a month, without incurring additional taxation; above this you pay 40% tax
-the 1m threshold is turnover, not profit (ie for KATA you dont do any expenses accounting)
-you can pause it and resume it,if you have months without income
-you can do it yourself through the ugyfelkapu website, accountant not necessary.
-if you have a 36 hour job as well you only pay 25000,
-you can opt to pay 75000 for enhanced social security.
*except small scale food producers?
For any self employed activity* you either need to be on KATA (50,000HUF/month) or the private entrepreneurs taxation of around 40-50% when tax and social security is added up. However, the important thing (that is not made clear - perhaps it's deemed to be obvious, but coming from the UK where it's very different, it wasn't obvious): for the private entrepreneur's taxation, the minimum tax base is (in simple terms) the minimum wage, so even if you're making no profit, you're still paying out around 70,000-80,000 HUF a month in income tax & social security. This is why KATA is cheapest for low levels of self employed income.
Other KATA notes;
-it allows you to earn 1m HUF a month, without incurring additional taxation; above this you pay 40% tax
-the 1m threshold is turnover, not profit (ie for KATA you dont do any expenses accounting)
-you can pause it and resume it,if you have months without income
-you can do it yourself through the ugyfelkapu website, accountant not necessary.
-if you have a 36 hour job as well you only pay 25000,
-you can opt to pay 75000 for enhanced social security.
*except small scale food producers?
