Unemployment tax aims to insure employees against unemployment, collective termination of employment contracts or insolvency of the employer.
Unemployment insurance must be paid on the salary and other remuneration of the employee and on the remuneration paid to the natural person under the contract. The obligation to pay is shared between the insured employee – employee (employee unemployment insurance payment) and the employer (employer’s unemployment insurance payment). Old age retirees and members of the company’s governing body are not required to pay unemployment insurance premiums. The employer is required to pay unemployment insurance for all employees.
Unemployment insurance rate and payment
The employer will be required to withhold and pay unemployment insurance tax of 1.6% of the employee’s gross income.
The employer must calculate, declare, withhold, and pay insurance premiums for payments made in the current calendar month. The declaration of income (TSD) must be submitted to the Tax and Customs Board by the 10th day of the following month.
The Tax and Customs Board checks the payment of the unemployment insurance premium and, if necessary, determines the amount of the insurance premium to be paid or reimbursed, as well as collects unpaid taxes.
Payment for unemployment insurance for a sole proprietor (FIE)
The FIE is not required to pay unemployment insurance premiums for themself. An unemployment insurance payment for a sole proprietor is mandatory only if there are hired employees. The insurance rate in this case remains the same as for commercial associations.