This is how your pay as Paja Entrepreneur is calculated
Paja Entrepreneurship is risk-free self-employment. When working through Omapaja, the light entrepreneur is insured against accidents and injuries. These insurance contributions along with the statutory health insurance contributions are the only side costs deducted from the pay of a Paja Entrepreneur. In other words, you are not required to pay such employee payments as unemployment or group life insurance contributions but get to keep the money for yourself. Even pension insurance contributions are not obligatory if your estimated earned income is less than 7 656 euros per year.
The gross pay of a Paja Entrepreneur is calculated based on invoicing as follows:
Invoicing (VAT 0%)
– Expenses related to activity (e.g. travel or material expenses)
= Gross wage
– Withholding tax
= Net salary
– Omapaja service fee 5% (+VAT 24%)
– Healthcare, accident and liability contributions (approx. 3,86 % + VAT 24% of the gross wage)
= To be paid
Please note that you must always add the appropriate VAT rate to the total sum on the invoice. The VAT exemption based on small-scale activity as referred to in the VAT Act cannot be applied to Paja Entrepreneurs, as the turnover of Omapaja exceeds the limit of 10 000 euros.
If the estimated earned income of a Paja Entrepreneur exceeds 7 656 euros per year, Omapaja will help the entrepreneur in taking out the YEL insurance. It is possible to authorize Omapaja to manage the pension insurance by proxy. In this case Omapa withholds the pension insurance contributions from the entrepreneur’s take-home pay.
A starting entrepreneur is eligible for 22 percent discount of the insurance contributions for the first 48 months! Pension insurance contributions are deductible in personal tax return. If you have any questions about pension insurances, do not hesitate to ask Omapaja’s staff members at any time.