The Company Will Bear the Contribution Costs for Secondary Income

Tax expert Marija Zuber explained that for secondary income, the obligation to pay contributions will lie with the payer, i.e., the company or another legal entity. Last week, Finance Minister Zdravko Marić announced that all those who work continuously or occasionally on a work contract or otherwise earn fees will be required to pay social contributions starting in 2017. This concerns about one hundred thousand people, including retirees, artists, and authors who have not been paying social contributions until now, and next year, the contributions will be the same for everyone who earns fees, amounting to 10 percent for pension and 7.5 percent for health insurance. Minister Marić stated that the principle of fairness was applied to secondary income so that all citizens would have the same tax treatment.

However, as we have already mentioned, Zuber clarified who will actually be obligated to pay contributions, and it will not be those who receive fees. She stated that the payer of secondary income has been responsible for calculating and paying contributions until now, and starting next year, the payer of author fees should also be responsible, but only if they are paying a fee to a person who is not insured as a journalist.

Journalists, on the other hand, have a special status because, as Zuber explains, if a company pays a fee to a person who is pension and health insured as a journalist (a journalist who pays contributions for their own insurance), such income will not be subject to mandatory contributions. This means that neither the company nor the journalist will pay it.

Secondary income is defined as income that is not earned based on an employment relationship, nor is it earned based on performing a trade or activities equivalent to a trade. When asked whether it makes sense to pay contributions for additional income in cases where a person has a permanent employment relationship from which contributions are already being paid and simultaneously earns a fee on which contributions are again paid, Zuber says it makes sense.

– This achieves greater fairness in the fiscal burden of earnings regardless of the legal basis on which they were earned. The fiscal burden is distributed more fairly, and for a person in employment, contributions paid on the fee will affect their rights in the pension and health system, concludes Zuber.