Self-employed and income tax
How much income tax do you pay as self-employed person?
If you are self-employed, the same brackets and rates apply as those for personal income tax. The higher your profit, the more tax you have to pay due to our progressive tax system. This means, in 2021, self-employed people have to pay 37.10% tax on profits up to € 65,508 and 49.50% tax on their profits from € 65,508. You can therefore compare your profit with net wages.
When do you pay income tax as self-employed?
You pay the income tax afterward between 1 March and 1 May: this makes it even more important to put money aside for the tax authorities. Are you not such a good saver? Then, there is always the option to pay a monthly amount to the tax authorities. The income tax return as a self-employed person is a bit more difficult than for someone in paid employment. The reason for this is that a lot has not yet been filled in. Therefore, keep your administration up to date and deduct all business costs from your profit besides the deductible items!
VAT vs. income tax
Every now and then, it happens that a self-employed person thinks that filing the VAT return is sufficient. But nothing could be further from the truth: the VAT return and income tax return are completely separate from each other, so you have to pay both!
We are happy to help!
Are you self-employed and do you have questions about your income tax? Or do you want our help filing your taxes? We are happy to help! Please, contact us using the details mentioned below.