Minimum assessment base

What it means

The minimum assessment base is the lowest amount on which contributions are calculated even if actual income is lower. It is the floor of the assessment base, while the maximum assessment base sets the ceiling above which no further contributions are paid.

For a sole trader the minimum base is derived from the national average wage two years earlier, so minimum contributions change every year on 1 January. The same principle applies to social and health insurance, though with different conditions.

For employees a minimum base exists mainly in health insurance, where it equals the minimum wage. If an employee earns less in a month and is not insured by the state, the difference is paid in the annual health insurance reconciliation.

How it works in practice

Compulsory social insurance for the self-employed arises only once a sole trader’s annual income exceeds a statutory threshold. From then on contributions are paid at least on the minimum base, even if the tax return would give a lower one. We warn clients about this change in advance so their first payments do not come as a surprise.

A sole trader pays health insurance on the minimum base from the very start of the business, unless they are also employed or have another reason not to pay. Where business and employment overlap, the obligation is assessed only in the annual reconciliation, so we check which regime each client is in.

When budgeting for a new business we count minimum contributions as a fixed monthly cost. With low income this can be a significant share of what is earned, and it is sometimes worth comparing it with a work activity agreement or another form of cooperation.

What to watch out for

The minimum base changes automatically every year, and the Social Insurance Agency and the health insurers do not always send a reminder. Anyone with a standing order for last year’s amount builds up arrears, on which a penalty is charged.

Low contributions on the minimum base also mean low benefits: sickness benefit and later the pension are calculated from what was paid. Anyone wanting better cover can pay contributions on a higher base or choose voluntary insurance.