As a rule, the employer pays the social tax for the employee or the official in the extent of the monthly remuneration but not less than the minimum monthly rate. This means, that if the employee earns less than the monthly rate, the employer still pays the social tax from the monthly rate. The aim of payment of the social tax from the minimum amount is to avoid obtaining the sickness insurance cover in the situation where the social tax is not paid for the employee or the staff member. Social tax must not be paid from the minimum rate when the person gets the state pension in addition to the remuneration, or is with partial work capacity.

The employer who calculates the exempt revenue upon withholding the income tax according to the subsection 42 (1) and (2) of the Income Tax Act, 1pays the social tax at least from the minimum monthly rate for the person who has employment or service relationship with several employers. In other words, the employer to who the employee has submitted an application for calculating the exempt revenue, pays the social tax at least from the monthly rate. It is necessary to be alert that when the employee has submitted an application for not calculating the exempt revenue or to calculate 0 euros, then this is also a submitted application that will lead to obligation to pay social tax from the monthly rate. If the person works for several employers and has not submitted an application to calculate the exempt revenue to any of the employers, the employers will pay the social tax based on actual payment. Hence it is in the interest of the employee to submit the application for calculating the exempt revenue.

According to subsection 42 (2) of the Income Tax Act, the person who works for several employees, can submit the application for calculation of the exempt revenue only to one employer, except when the recipient of the payment gets the taxable income from the Social Insurance Board. If the recipient of the payment receives the taxable income from the Social Insurance Board and the payer of the wage income, they may submit an application of the exempt revenue to both withholding agents. In that case the exempt revenue indicated in the application should not exceed 500 euros.

If the employer who calculates the exempt revenue has a statement about the remuneration paid to the person by another employer, the social tax can be paid for that person from the difference of the monthly rate and the remuneration paid by the other employer, but at least from the amount the employer has paid to the person for the month. The person is obligated to submit a new statement to the employer who calculates the exempt revenue by the 5th date after receiving the payment if the size of the amount paid by another employer is different from the one indicated in the last submitted statement.2

Or, the employer to who the employee has submitted an application for calculating the exempt revenue, pays the social tax from at least the monthly rate.

1Social Tax Act, section § 21.

2Social Tax Act, subsection 2 ( 2²).