Last week we told you about the need to have a provident contract for self-employed workers and succinctly about contracts eligible for Madelin law. Today, we would like to talk to you more specifically about this tax level, which is still not used enough, even though it can make a real difference.

As a self-employed worker, you do not have the same social "benefits" as employees. Less coverage in the event of sick leave, a pension that is often much lower and health expenses that rest more on your shoulders. Fortunately, the Madelin law is there to compensate for this inequality. And even better, it allows you to have part of your social protection financed by the tax authorities! Protecting, preparing and exempting from taxation, these are the three pillars of the Madelin law.

In concrete terms, Madelin law authorizes you to deduct from your taxable profit the contributions you pay to provident contracts (to cover the loss of income in the event of work stoppage or disability), supplementary health insurance (Madelin eligible mutual insurance company), and retirement insurance.

Let's take a concrete example, a private nurse with a Marginal Tax Bracket of 30%. The latter contributes €400 per month to Madelin-eligible contracts, €200 for a Retirement Savings Plan (PER) for retirement and €200 for a provident contract, allowing income to be maintained in the event of temporary or permanent work stoppage.

She therefore contributes an annual amount of €4,800 which will be deducted from the taxable profit. As a result, the tax gain corresponds to 30% of €4,800, i.e. €1,440.

NB: provided that at least €4,800 is taxed at 30% IMT.

As a result, they benefit from a solid pension plan and prepare for retirement while benefiting from partial coverage by the tax authorities through the deduction.

In concrete terms, under the PER, the tax gain is present during the year of payments but there is a tax reintegration when the withdrawal is made. For more information on this envelope, do not hesitate to consult our dedicated article.

• https://www.wealth-a7.com/fr/actualites/comprendre-le-per-/

NB: An article focusing on the different characteristics of the Retirement Savings Plan will soon be available!

For contributions to eligible provident contracts, it is different, the tax gain is definitively acquired. This contract costs him €2,400 per year. Thanks to the deduction, the real financial impact is only €1,680 per year (2,400 – 2,400*30%) or €140 per month. The difference of €60 per month is, in a way, compensated by the tax reduction.

However, beware of the deductible payment ceilings! TNS have specific ceilings based on their taxable profits for the current year. Here is a summary of these:

*Annual Social Security Ceiling

NB: These ceilings can be combined and renewed each year.

Even today, too many TNS see these contracts as only an additional burden. It is a smart investment to secure your future and that of your loved ones. Instead of having to pay taxes, you can turn it into personal protection: you prepare for your future, secure your income in case of unforeseen events, while keeping control of your finances.

Finankap Group is there to select the best contracts adapted to your needs and objectives while acting on your taxation. So don't hesitate any longer and let's see together how to put taxation on the service of your security!

Finankap Group, always at your side to bring your desires to life.