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Sole proprietor’s pension: what to expect for an entrepreneur after going on a well-deserved rest

Yevgenia Baidikova, a practicing accountant, an expert in taxation, accounting and Finance, explains in detail how an individual entrepreneur’s pension is considered, what it is formed from, and whether to expect high amounts of payments

Individual entrepreneurs, like other individuals, are entitled to an old-age pension. The main difference between an individual entrepreneur and an employee is that the entrepreneur pays insurance premiums to the pension Fund for himself, transferring funds to his personal personal account, and in the future, the pension will be formed from this accumulated amount.In General, if you are younger than the year of birth in 1967, your pension is formed from the savings and insurance part, which means that to get it, you need to have an insurance experience of at least 7 years in 2016 and at least 15 years by 2025, as well as earn an individual pension coefficient, the size of which is set at least 6.6 from January 1, 2015, with a subsequent annual increase of 2.4 points and by 2025 will be 30 points. The coefficient depends on the retirement age, length of insurance experience, and the actual total amount of insurance premiums paid to the FIU.

For individual entrepreneurs, the insurance period is the time during which the entrepreneur transferred insurance premiums to the FIU for himself. The periods of sick leave and military service are also taken into account, and for women entrepreneurs, the insurance period includes all the periods when they were on maternity leave.

It is important to know that for individual entrepreneurs, the pension is calculated based not on how much they earned, but on the amount of a fixed payment on the OPS and 1% of the amount exceeding 300,000 rubles that individual entrepreneurs pay annually.for the self-employed, the approach is the same.

It is important to understand that the individual entrepreneur should not expect a high pension, it will be approximately equal to the size of the social pension.to understand this, you do not need to delve into complex formulas, just look at a simple calculation.

The maximum salary that is taken into account when calculating a pension is 85,083 rubles per month, for a year the employer deducts at least 224,619.12 rubles for such an employee to the pension Fund, for which you can get 8.7 points per year. The sole proprietor pays a fixed amount of 26,545. 00 rubles to the FIU (in 2018) if the income does not exceed 300,000 thousand, the fixed contribution is calculated from the minimum wage, which means that you can get a maximum of 1.12 points per year. An individual entrepreneur can increase their pension only if they honestly reflect an income of more than 300,000 rubles and deduct +1 % of this income.

Of course, if an entrepreneur is thinking about his future, then he should take care in advance of the sources of income that he will receive when entering retirement age, although this applies to all other citizens who do not want to sharply reduce their standard of living after retirement.

Continuation of the article: calculating pensions for sole proprietors and employees: what is the difference and what is better?

Expert commentary

Lyudmila Arkhipkina
Leading methodology for accounting and taxation of the Moi Delo service, member of the SRO AAS, member of the IFA (International Association of accountants)
Each individual entrepreneur must pay insurance premiums for mandatory pension provision. The amount of the contribution depends on the individual entrepreneur’s income — whether it exceeds 300,000 rubles. The calculation includes amounts that are received from business or other professional activities, reduced by professional deductions when applying the General tax system (when applying the USN — “income” of the entrepreneur, determined in accordance with the tax code). 346.15 OF THE TAX CODE OF THE RUSSIAN FEDERATION).

If the income is 300,000 rubles or less, the fixed payment for mandatory pension insurance is: 26,545 rubles for 2018; 29,354 rubles for 2019; 32,448 rubles for 2020.

The payment period for individual entrepreneurs for their own contributions for the year with income not exceeding 300,000 rubles is no later than December 31 of this year.

If the income exceeds 300,000 rubles, you must pay an additional 1 % of the amount exceeding 300,000 rubles for the year. The amount of insurance premiums for mandatory pension insurance cannot be greater than: 212,360 rubles — for 2018; 234,832 rubles — for 2019; 259,584 rubles — for 2020.

The payment period for individual entrepreneurs for their own contributions for the year with incomes exceeding 300,000 rubles is until July 1 of the following year.

The frequency of payment of such contributions during the year is not set. Therefore, you can decide how often to pay them yourself. we recommend that you do this quarterly.

The My business service will not allow you to miss any important tax dates. Immediately after registration on the site, your personal tax calendar is generated. It shows all the upcoming and past dates of tax payment and reporting; it will help you pass everything on time and pay for it. Try it, the first 3 days are completely free.

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