Do you know what the Social Security Contribution (TSU) is? Some people are still unfamiliar with how it works and why it is important.
If you are an employer or an employee, keep reading. In this article, we explain everything you need to know about this contribution.
Social Security Contribution: What Is It and How Does It Work?
The Social Security Contribution (TSU) corresponds to the contributions paid each month by employers and employees to Social Security.
The amount is calculated based on the employee’s monthly salary and is intended to help finance the Social Security system and its benefits, including retirement pensions.
It is important to note that, as with most contributions, the amount of the TSU varies according to each person’s salary. In other words, the higher the salary, the higher the amount of contributions paid.
Employees
The contribution is calculated based on the employee’s gross remuneration and is divided into two parts.
The first, 11%, is borne by the employee, while the second, 23.75%, is paid by the employer.
When the employer is a non-profit organisation, the rate is reduced to 22.3%.
To better understand how the TSU applies to an employee’s salary, let’s look at a practical example:
Imagine that an employee earns a gross salary of €800 per month. To determine the amount payable by the employer, the following calculation applies:
(0.2375 × €800) = €190
Therefore, the employer’s Social Security contribution will be €190.
The same principle applies to the employee’s contribution.
In this case, the calculation is (0.11 × €800), resulting in €88. This amount is deducted from the employee’s salary and paid to Social Security by the employer.
It should also be noted that other forms of remuneration must be taken into account when calculating the contributions correctly.
These may include seniority payments, commissions, bonuses, premiums, night-work remuneration and other forms of compensation.
Self-employed workers
Self-employed workers must also make monthly Social Security contributions, except during the first year of activity, subject to the conditions established by law.
When a self-employed worker operates without organised accounting, the contribution rate is 21.4% of the relevant monthly income
Relevant monthly income is calculated based on the amounts reported quarterly: 70% of income from the provision of services or 20% of income associated with the production and sale of goods.
Let’s look at another practical example:
If a self-employed worker reports €3,000 in quarterly income from providing services, their average monthly income is €1,000.
Therefore, if their relevant monthly income is €700 (€1,000 × 70%), their monthly contribution will be:
€700 × 21.4% = €149.80
Their monthly contribution will therefore amount to €149.80.
Consequences of non-payment
The TSU is a mandatory contribution, and failure to pay it may result in various consequences.
These may include the application of penalties and fines.
As a general rule, Social Security contributions must be paid between the 1st and 20th of the month following the month to which they relate.
If payment is made within 30 days after the legal deadline, the fine may range from €50 to €500.
After these 30 days, the situation is considered more serious, and the fine may range from €300 to €2,400.
In addition to fines, criminal proceedings may also be brought against the employer in certain circumstances.
This may occur, in particular, where an unlawful benefit exceeding €7,500 is identified, or where the employer withholds the amounts due to Social Security from employees’ salaries but fails to pay those amounts to Social Security.
Were you already familiar with this information?
If you need specialised guidance regarding the payment of the Social Security Contribution, contact us.