Self-employed persons pay their social security contributions themselves. It is compulsory to pay contributions for health, pension, work accident and dependency insurance. They may also register voluntarily with the Employers' Mutual Insurance (Mutualité des employeurs - MDE). The various contribution rates as well as the minimum and maximum contribution thresholds can be consulted here.
Contribution base
The base for calculating social security contributions, known as the contribution base, derives from the self-employed person's professional income. If the self-employed person pursues several activities, the aggregate of all professional incomes is subject to contributions.
For a self-employed person's first affiliation, the CCSS provisionally calculates social security contributions using the minimum wage as the contribution base, a more accurate estimate of professional income is missing. For a side activity to an activity as an employee, the provisional calculation is made using one third of the minimum wage as the contribution base.
The exact income is determined once the final tax assessment has been issued by the Luxembourg Inland Revenue (Administration des contributions directes - ACD) for the year in question. The CCSS proceeds then to the final calculation of contributions. To avoid overpaying contributions following the final tax assessment for a certain year, self-employed persons are required to check and adjust their provisional income with the CCSS as soon as they are able to estimate their professional income more accurately.
For subsequent years, the CCSS uses the last known income as the contribution base, so either the last professional income disclosed by the ACD, or the last adjustment to provisional income submitted by the self-employed person.
Self-employed persons, whose income exceeds the contribution threshold taking into account several professional activities, may request reimbursement of part of their contributions.
Contribution base for assisting spouses/partners*
In order to determine the contribution base for an assisting spouse/partner, the professional income of a self-employed person (deemed the main insured) is divided into 2 equal parts.
However, the assisting spouse's income liable for contributions cannot exceed double the minimum wage. If that is the case, the excess is assigned to the contribution base of the main insured. In theory, the individual contribution base cannot be less than the minimum wage. However, the couple may request a reduction of contributions for pension insurance if their global income is below the minimum wage.
*according to article 2 of the Law of 9 July 2004
Minimum and maximum contribution thresholds
The contribution base has a minimum (the minimum wage) and a maximum threshold (5 times the minimum wage) for health, pension and work accident coverage. The contribution base for dependency insurance has neither a minimum nor a maximum contribution threshold.
Recalculation
A self-employed person's contributions may be recalculated at any time, particularly if:
- the self-employed person has requested an adjustment of their provisional contributions;
- the self-employed person has requested an exemption or a reduction of their contribution base;
- the ACD has disclosed a final income;
- the salary of a self-employed shareholder/manager has been reported by the ACD;
- the CCSS has adjusted the contribution base following an adjustment reported by the ACD.
The account statement (invoice) following an income adjustment sets out the outcome of the recalculation. The details of the contribution adjustment are shown on the reverse side.
The balance after the recalculation must be paid within 10 days of the invoice being issued. However, the CCSS may also grant a payment schedule, on demand if necessary.