Work contracts in Slovenia
A work contract in Slovenia can be for the production of items, the repair of items, physical and intellectual work.
With intellectual work, the work contract is quite similar to a copyright contract, because intellectual work performed on the basis of a contract for work contains elements of copyrighted work, and so a copyright contract can be agreed.
Who can conclude a contract for work?
A work contract can be agreed by a worker who is not employed by the employer who is the contracting authority. It can be agreed between an employer and worker who have already agreed an employment contract, i.e. for work that is not part of the normal job the worker does.
A work contract can be agreed for a fixed term only.
The new Labour Market Regulation Act states that, as of 1 January 2011, data on contracts for work do not have to be provided to the Employment Service of Slovenia.
Work contract or employment contract?
It is more favourable for employers to conclude contracts for work with new workers; however, in Slovenia there are some restrictions.
A worker can't perform work according to a work contract if parts of an employment relationship exist and the worker carries out work in a way that fulfils the working conditions included in an employment contract.
Legal practice has added some additional criteria for assessing employment relationships. A working relationship is considered to be an employment relationship if the job is categorised as a workplace; if work takes place during working hours set by the employer; if work is ongoing and it can be compared with other workplaces at the employer’s premises according to the employer's instructions.
Payment arising from a work contract in Slovenia is considered as personal income, and forms part of the taxable income and falls within the scope of employment income.
Personal income tax
Payment arising from a work contract in Slovenia is considered personal income, and is therefore liable for income tax as part of income from other types of contractual relationship.
The tax base is income less normalised expenses of 10% of income. An individual can also claim actual transport and accommodation costs related to the performance of work or services arising from a contract for work. Real costs can be claimed only through appropriate documents like invoices that show the cost was valid and deductable against tax.
As with other income from employment, the contractor should pay a prepayment of income tax of 25% of the tax base, which is counted as paid income tax.
Special tax on specific income
A person paying an income must pay a special tax on specific income. The tax base for working this out is the gross payment to the individual for performed work arising from a contract for work; the tax rate is 25%.
Social security contributions
Although an individual can be insured on another basis (e.g. based on an employment relationship), in the case of a contract for work, contributions for pension and disability insurance also have to be paid.
The payer must pay a contribution for pension and disability insurance of 6% of gross payment to the individual, as well as insurance for injuries at work and occupational disease of €4.27.
Example of taxation of income arising from a contract for work
- Gross amount: €1,500.
- Normalised expenses (10%): €150.
- Tax base:€1,350.
- Prepayment of income tax (25%): €337.5.
- Net payment: €1,162.5.
- Special tax on specific income (25%): €375.
- Lump sum contribution for insurance in case of injury at work and occupational disease: €4.27.
- Lump sum contribution for pension and disability insurance (6%): €90.
- Cost for payer: €1,969.27.