Depending on your status, you pay social contributions — whose rules vary from one country to another, even within Europe. Here is how a self-employed person’s contribution is calculated (Belgian example).
Contributing according to income
Contributions are mainly a percentage of net professional income, varying by category and income bracket (main or supplementary activity, pensioner or not; a special arrangement for the assisting spouse).
Reference year and indexing
The base is the net income of the third calendar year preceding the year due (e.g. 2014 contributions are calculated on 2011 income), with a minimum and a maximum. This income is also indexed: multiplied by a coefficient set each year by royal decree. The fund calculates the contribution on this indexed income.
Management fees
Management fees are added — a charge each fund applies, often around 4.20% of the contribution. Note: from January 2015, for newcomers, only the current year serves as the reference.
If you have a company
You pay your contributions either as a self-employed person in a liberal profession, or as an employee of the company.