The limit for deductions in the work agreement is increased. Social and health insurance will be paid only at the agreed income of at least INR 3,000 per month.
Employers can also negotiate an employment agreement with the employee outside of the employment relationship and the work agreement .
This is often done in practice. Especially in the case of crowds or part-time employment. From January 2019, the agreement will be even more advantageous. The amount of deductible income increases. It saves both employees and employers.
The amendment is made by Government Order No. 213/2018 Coll., Which provided data on the average wage and the resulting reduction limit for the calculation of pensions in 2019. Similarly, these data are based on the calculation of the minimum and maximum assessment bases and advance payments of insured persons on a self- for the following calendar year. They are increasing significantly from next year. For social and health insurance by almost INR 200.
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Agreement on Working Activity
The employment agreement is concluded in accordance with the provisions of Section 76 of the Labor Code . Work on an agreement can not be carried out for one employer exceeding the average half of the weekly working hours. Compliance with this condition is assessed for the entire period covered by the agreement, but not longer than 52 weeks.
The agreement must be concluded in writing, otherwise it would be invalid. In accordance with the Labor Code, it should include the agreed work, the amount of working hours and the time it is closed. In the agreement, it is necessary to negotiate not only the remuneration but also the conditions for its provision . Both of these are as a rule also significant in terms of assessing whether or not the agreement establishes the employee’s participation in the insurance.
In general, agreements negotiated outside the scope of employment do not concern the provisions on severance, working hours and rest periods or obstacles in the workplace on the part of the employee. But that does not mean that important personal barriers to work and holiday entitlements can not be negotiated. For example, an employee who has an agreement on work or, where applicable, an internal regulation of the employer includes such an arrangement.
Social and Health Insurance
Social security is paid by the employer as in the case of a “classical” employment relationship. An exception is small-scale employment. Small-scale employment is an employment whose agreed income is less than $ 2,500 or is not negotiated at all. From January 2019, the limit is increasing to $ 3,000.
In the case of health insurance, the employment agreement is created up to INR 2500 (from January 2019 to INR 3000). A person working under this Agreement is considered as an employee in health insurance only if he / she reaches the amount of the amount that is a condition for the participation of such a person in sickness insurance. Not if it reaches the “Income Allowance” in the calendar month of 2019.
The employer will not pay health insurance from next year from reward agreements up to INR 2999 . At the same time, however, these persons do not have to deal with their insurance relationship as a result of this job. For each insured person, health insurance must be paid – the payer is either the insured person himself or his employer or the state (dependent children, pensioners, persons on parental leave, etc.).
The Levy Limit Increases, The Withholding Tax Does Not Change
By government regulation, the amount of the decisive (enumerable) income increases. The fixed income is set as one tenth of the product of the general assessment base established under the Pension Insurance Act, which is two years prior to this year, and the conversion rate for its adjustment rounded down to the entire five hundred corporation. For the year 2019, therefore, the amount of 3000 INR (up to the limit of 2999 INR is not paid) is used for the social and health insurance contributions in the agreement on work activities .
On the contrary, the Income Tax Act is still subject to a limit of INR 2500 for withholding tax . This limit will not change from next year. It is therefore possible to increase the monthly salary to 2999 INR so that the agreement is not subject to premiums. However, from the amount of INR 2501, the advance tax will be charged even if the unsubscribed statement is taxed. This means that in the case of two or more parallel earnings of a tax-deductible employee, an annual tax charge can not be made. Employees submit themselves tax returns and provide taxable income from all their concurrent employers.
The Limit For The Work Agreement Does Not Change
The change does not apply to work agreements . Here is the limit for the eligible income for social and health insurance (maximum reward of INR 10,000 ), as well as for withholding tax on a non-taxed statement. Changes could happen in the future. Legislators are considering amending the Sickness Insurance Act and raising the limit to INR 11,500.