When you work under an employment contract, the social security contributions are divided between the employer and you. They deduct from your salary and pay the tax and mandatory social security contributions. If you participate in a dual training system, the state fully covers your social security contributions. Your remuneration is regulated in the Labor Code and is linked to the maximum amount of the monthly scholarship according to the Preschool and School Education Act.

The net amount that you will receive is formed by deducting social security contributions and tax from the accrued remuneration (gross amount).

When you work under the so-called civil contracts under the Obligations and Contracts Act and are not self-insured persons, the social security obligations will be withheld and paid by the contractor, with whom, for example, if you have concluded a service contract with them.

It is important to know that for such income there are so-called "legally recognized (tax deductible) expenses", i.e. it is assumed that you have incurred such expenses for your activity. A certain percentage is deducted from the accrued remuneration, social security contributions are withheld from the amount received and tax is charged on the balance.

The percentage of legally recognized expenses is different: when you receive remuneration under a civil contract for a service, they are 25%, but if it is under a contract by which you assign the right to use your copyrighted materials, such as texts or photographs, they will be 40%.

If you are not insured on any other basis and have remuneration under a civil contract, which for the calendar month is lower than the minimum wage, after being reduced by the legally recognized expenses, you only owe health insurance contributions, which you must pay yourself.

If you receive rent from property in your name, you must also pay tax, but you do not owe social security contributions, because this is not income from work. The legally recognized expenses are 10%. If you receive rent or lease from renting out agricultural land that you own, they are not taxed. They fall under a special provision of the law that specifically lists income that is not subject to taxation.

When starting a business, check the relevance of the amount of tax deductible expenses in the relevant regulatory documents listed at the end of this article.

 

• How is income declared?

If you work on an employment contract and this is your only income, you are not obliged to submit a tax return. However, if you have other income - from rent, under a civil contract, from investments, etc., they must be declared. This is done by your parents or guardians.

The annual tax return (see below) is submitted from January 10 to April 30 for income from the previous year. In section I for the data of the obligated person, your data is filled in, and in section II – the data of the parent, guardian or trustee as your legal representative. The income received is described according to its type in the relevant annex.

Income from civil contracts is subject to advance tax and final tax, which are calculated in the annual tax return. When the contract is concluded with a company or a self-employed person, the tax is withheld and paid by them, and if it is not –the amount of the tax is determined by you and paid by you. In such a case, you submit a Declaration of Taxes Due (see below). It is submitted by April 30, July 31 and October 31. This means that if, for example, you received income in the first three months of the year, you must declare it by April 30 and pay advance tax. Income from the last quarter is declared with the annual tax return in the relevant annex, unless you explicitly wish for the tax to be withheld from you.

You also owe advance tax on rental income. The tax is paid and declared by your tenant, when it is a company or a self-employed person, and if it is not - by you. In this case, you must also complete and submit a Declaration of Taxes Due. Paying rent without a document from the landlord implies concealment of income for the landlord and is not recommended, as it leads to losses for the landlord (sanctions) and for the budget as a whole. Sanctions do not exempt you from the obligation to pay the tax, along with interest for the period from which you should have paid, until the time of actual payment. Unpaid tax liabilities can be calculated here.

 

• How to submit the declaration?

The declaration can be submitted to the office of the National Revenue Agency (NRA) at a permanent address or electronically in its Electronic services portal with a Personal Identification Code (PIC) in your name. To get your PIC, the parent or guardian submits an application to the NRA (by email or in an office) and receives it on site.

With a PIC, you can also use the NRA service for a declaration with pre-filled data on submitted income, paid advance tax, etc. Review them and, if necessary, make corrections and additions before submitting the declaration.

Keep in mind that sanctions are imposed for a declaration not submitted on time or for incorrectly specified data in it, due to which a lower tax is determined. If the obligation is established, in addition to the tax due, you will have to pay interest.

 

Useful links

Law on Preschool and School Education

Labor Code

Social Security Code

Health Insurance Law

Law on Personal Income Taxes

Law on Obligations and Contracts

National Revenue Agency

Portal for electronic services of the National Revenue Agency

Personal Income Tax

Civil Contract

Rent

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Annual Tax Declaration under Art. 50 of the Personal Income Tax Act for 2024 for the Income of Individuals with Annexes thereto

Declaration under Art. 55, Para. 1 of the Personal Income Tax Act and Art. 201, Para. 1 of the Income Tax Code for Taxes Due and Annexes thereto - 2023 (PDF)