In the Czech Republic, there is a happy medium for many entrepreneurs, where they want to invoice the amount that will ensure the lowest possible social security contributions. Do you know what that amount is?
If you’re a sole trader, you’ll be familiar with the term “minimum social insurance contributions”. For many, it’s a key item that can significantly affect monthly cashflow and overall business profitability.
Maximum invoiced amount 560 000 CZK
In 2023, the magic number to keep in mind is £560,000. This means that if you invoice amounts up to this threshold during the year, you can achieve the lowest possible social security contributions. Of course, this doesn’t mean you can’t invoice more, but if you want to minimise your contributions it’s a good number to keep in mind.
Why is this threshold important?
Social Security is made up of several parts, and the amount you pay varies depending on your income. With a lower income, you may qualify for reduced contributions, which can significantly reduce your monthly costs. On the other hand, if you exceed a certain threshold, your contributions may increase.
In conclusion
Whether you’re a start-up entrepreneur or have several years in the business, it’s important to know your options to optimize your cash flow and minimize your costs. £560,000 is the amount you should keep in mind in 2023 if you want to minimize your social security contributions.
If you have further questions or need a consultation about your business, please do not hesitate to contact us. The Accountants on 1 Ltd. team is here for you!
Note: We always recommend consulting with your accountant or tax advisor to ensure you have up-to-date and accurate information specific to your situation.
