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On the procedure for the payment of compulsory pension contributions by "freelancers"

freelancers

The law of the Republic of Kazakhstan "On amendments and additions to some legislative acts of the Republic of Kazakhstan on the issues of employment" amended and supplemented the Law "On pension provision in the Republic of Kazakhstan".

In the implementation of the legislative amendments adopted in the first quarter of 2019, the relevant Rules will be amended.

Legislative amendments relate to the procedure for payment of compulsory pension contributions of citizens who combine work under an individual employment contract and perform work (providing services) under concluded civil contracts (CC) only with individuals. In this case, such citizens will be exempted from the obligation to pay mandatory pension contributions from income under the civil contracts.

In addition, we inform you that according to subparagraph 5) of paragraph 2 of article 24 of the Law of the Republic of Kazakhstan "On pension provision in the Republic of Kazakhstan" legal entities, individual entrepreneurs and persons engaged in private practice, who are currently tax agents, calculating and paying individual income tax, are obliged to pay compulsory pension contributions for individuals ("freelancers") performing work/services under the civil contracts.

At the same time, according to paragraph 2 of article 39 of the Law of the Republic of Kazakhstan "On pension provision in the Republic of Kazakhstan" for individuals performing work/services under civil contracts, concluded with individuals retain the right to participate in the funded pension system by self-payment of compulsory pension contributions in their favor.

Example 1. 

An individual has a regular place of work (works as an employee under an individual employment contract) and in parallel provides services as an interpreter to a legal entity under a civil contract. In this case, mandatory pension contributions are calculated and withheld in the amount of 10% :

  1. at the regular place of work - the agent (employer) from the income of an individual received in the form of a monthly payment of an employee
  2. under the civil contract - a legal entity from the income of an individual, from the performance of works (services) under civil contracts.

Example 2.

An individual has a regular place of work (works as an employee under an individual employment contract) and in parallel provides services as a lecturer to an individual under a civil contract. In this case, compulsory pension contributions are calculated and retained in the amount of 10% at the regular place of work – by the agent (employer) from the income of an individual received in the form of a monthly payment of an employee. At the same time, under the civil contract, concluded with an individual to perform work (services) payment of compulsory pension contributions will not be made.

Example 3.

An individual renders services as a home care assistant to an individual under the civil contract. Compulsory pension contributions are calculated and withheld in the amount of 10% and are paid by an individual independently from income under a civil law contract.

Changed on 1 February, 2019 - 16:16
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