Self-taxation for freelancers in Serbia, introduced in January 2023, empowers individuals to independently calculate, report, and pay their taxes based on applicable regulations and tax rates. This system shifts the responsibility to freelancers for accurately assessing their income and computing owed taxes. Tax authorities no longer issue tax assessments, making it crucial for freelancers to stay informed about tax laws and rates to comply.
Freelancers now have two models for self-taxation to choose from. We want to explain these models in more detail:
Model 1
This model is for freelancers who earn less than 96,000 RSD every three months. This group pays 20% of their income as tax, but they must subtract 96,000 RSD from their income before paying tax. This means that if they make less than 96,000 RSD in three months, they don’t have to pay any tax. They also must pay 24% of their income for pension and disability insurance, but they can subtract 96,000 RSD from their income before paying this too. This means that if they make less than 96,000 RSD in three months, they don’t have to pay any pension and disability insurance either. However, they must pay 10.3% of their income for health insurance, unless they already have health insurance from another source (for example, from their parents or another country). The minimum amount they must pay for health insurance is RSD 4,789 every three months, which is based on the average salary in Serbia. If their income is higher than this minimum amount, they must pay 10.3% of their income instead.
Example: quarterly income RSD 100,000>Base for paying taxes and contributions = 100,000 – 96,000 = 4,000 RSD> Tax = 4,000 x 20% = 800 RSD> PIO = 4,000 x 24% = 960 RSD> Health = 0 RSD if you have health insurance or 4,789 RSD if you do not have health insurance.
Model 2
So, in the second model freelancers must do some calculations to find out how much they pay in terms of taxes and contributions. First, they must take their income for three months and subtract 57,900 RSD from it. Then, they must add 34% of their original income to the result. This gives them their taxable income, which is the amount that they must pay taxes and contributions on. They must pay 10% of their taxable income as taxes. This means that if they make less than 57,900 RSD in three months, they don’t have to pay any taxes. They also must pay 24% of their taxable income for pension and disability insurance, which is mandatory for everyone. The minimum amount they must pay for this is RSD 25,218 every three months, which is based on the lowest possible income for this model. If their taxable income is higher than this minimum amount, they must pay 24% of their taxable income instead. Lastly, they must pay 10.3% of their taxable income for health insurance, unless they already have health insurance from another source (for example, from their parents or another country). The minimum amount they must pay for health insurance is RSD 4,789 every three months, which is based on the average salary in Serbia. If their taxable income is higher than this minimum amount, they must pay 10.3% of their taxable income instead.
Example: Quarterly income RSD 100,000> Base for paying taxes and contributions = 100,000-(57,900+100,000*34%) = 8,100 RSD >Tax = 8,100 x 10% = 810 RSD >PIO = 25,218 RSD >Health = RSD 0 if you have health insurance or RSD 4,789 if you do not have health insurance.
