Introduction: How Taxes Work for Sole Proprietors in Slovakia

Slovakia is one of the few EU countries where individual entrepreneurs (Slovak: živnostníci) can run a business with minimal administrative and tax burdens.

The tax system here is simple, understandable, and relatively not overloaded with bureaucracy. In the first year of operation, sole proprietors are exempt from mandatory insurance contributions. The tax burden can be as low as around 7% of income of €33,000 in the first year. The tax declaration is filed once a year—online, without the need for a personal visit to the tax office.

Even from the second year, the tax and insurance burden remains relatively low—around 16% with an income of about €33,000, thanks to the possibility of using fixed expenses and non-taxable minimums.

In this article, we will review the taxes and contributions that sole proprietors must pay in Slovakia, how they are calculated, and what it looks like in practice.

Income Tax for Sole Proprietors (živnostník) in Slovakia

Sole proprietors in Slovakia pay income tax ^{(Slovak: daň z príjmu)} on net profit—i.e., income minus expenses and non-taxable amounts:

15% — if the annual profit does not exceed €100,000
19-25% — applies only to the portion of profit exceeding €100,000 (progressive scale)

Non-Taxable Minimum (Slovak: nezdaniteľná časť)

In 2024, the amount is €5,646.48. This amount is deducted from the profit before calculating the tax. The actual amount depends on the living wage and may change annually.

Sole Proprietor Expenses

A sole proprietor can reduce the taxable base using:

Fixed expenses (Slovak: paušalné výdavky) — 60% of income, but not more than €20,000 per year. These are automatically considered, no need to provide receipts or invoices.
Actual expenses — if detailed records are kept and all expenses are documented.

⚠️ Important: If your income does not exceed €100,000 per year, the tax rate remains 15%, and this is the key advantage of being a sole proprietor in Slovakia. Higher incomes and increased tax rates are not considered—once income exceeds €100,000, the main burden starts to come from social and health insurance contributions, which increase proportionally.

Health and Social Insurance for Sole Proprietors

In addition to income tax, sole proprietors in Slovakia are required to pay insurance contributions—both health and, from the second year, social insurance. The contribution amounts depend on income in the previous year.

Health Insurance (Slovak: zdravotné poistenie)

The obligation arises from the first day of activity. The entrepreneur must register with their health insurance company within 8 days after registering the sole proprietorship. We can do this for you. Simply indicate that you want us to automatically register you with the health insurance system.
Contributions are calculated as 15% of the calculation base, but there is a set minimum advance payment of €107.25 per month for 2025 (in 2024, it was €97.80).
Throughout the year, the entrepreneur pays advance payments. At the end of the year, the insurer performs recalculation. If the advances were underestimated, there will be a shortfall that needs to be paid.
Your health insurer will notify you of the contribution amounts and payment deadlines.

⚠️ Important: Just as the obligation may arise, it may also cease. If the sole proprietor has already become a contributor to social insurance, but in the following year, their income falls below the threshold for social contributions, they lose the obligation to pay contributions and return to being a non-contributor. This comes into effect from July 1 (or October 1), depending on the tax declaration submission deadline.

Social Insurance (Slovak: sociálne poistenie)

In the first year after starting the sole proprietorship, the entrepreneur is exempt from paying contributions to social insurance.
The obligation to pay social contributions arises from the second year if income in the first year exceeds €8,580 (threshold for 2025).
Contributions start: from July 1 if the declaration is submitted by March 31, or from October 1 if the deadline is extended to the end of June.
The contribution rate is 33.15% of the calculation base. In 2025, the minimum contribution is €237.02 per month (expected further increase in 2026).
Your Social Insurance will notify you of the contribution amounts and deadlines after the tax declaration.

The calculation base ^{(Slovak: vymeriavací základ)} is calculated as follows = net profit / 1.486 / 12

Social and Health Insurance during Suspension or Closure of Sole Proprietorship

If a sole proprietorship is closed or officially suspended, the entrepreneur is not obligated to pay social and health insurance contributions for the period when the activity is not conducted.

When closing or suspending a sole proprietorship, we recommend notifying your health insurer and Social Insurance to avoid the accumulation of contributions during the period when the entrepreneur is not required to pay them.

Insurance Contacts and Notification Methods

If you are closing or suspending your sole proprietorship, it is important to notify the insurance funds to prevent them from continuing to charge you contributions.

Branch Lists:

Union zdravotná poisťovňa
VšZP (Všeobecná zdravotná poisťovňa)
Dôvera zdravotná poisťovňa
Sociálna poisťovňa

Health insurance can be notified by email (email available on branch pages).

Social insurance should preferably be notified in person at the branch or through slovensko.sk portal, if you have: an electronic signature and an activated passport or residence permit for online communication with authorities.

If you don't want to handle this yourself, contact us and we will arrange electronic notification to Social Insurance for you.

Transaction Tax (Slovak: transakčná daň) for Sole Proprietors in Slovakia

Transaction tax (Slovak: transakčná daň) is a tax paid by all sole proprietors (IP) and companies (LLC) in Slovakia on each outgoing financial transaction.

The tax is not charged for payments made by bank card!

🟩 Disclaimer: As of April 2025, the Slovak authorities are considering the abolition of the financial transaction tax. If the decision is made, doing business in the country will become even easier.

Transaction Tax Rates:

0.4% of the amount of each outgoing transaction (maximum €40 per transaction)
0.8% for cash withdrawals from an ATM

How to Pay the Transaction Tax?

Option 1: Account in a Slovak Bank. If the sole proprietor or company has a bank account in Slovakia, the tax is automatically withheld by the bank. No reporting is needed, everything happens without the entrepreneur's involvement. The downside: Slovak banks are inconvenient for foreigners—opening an account is complicated, requires a personal visit, and it is not possible to open an account online.

If the entrepreneur opens a bank account in Slovakia, a special business account is required for business activities.

Option 2: Account in a Foreign Bank (e.g., Revolut). If using a foreign bank, the tax must be paid manually:

Once a month, export all outgoing transactions,
calculate the tax amount,
submit the report and pay the tax manually.

If the entrepreneur decides to use an account in a foreign bank, a regular personal account registered in the name of a physical person is sufficient—provided that it is used exclusively for business activities.

Taxes and Contributions in Slovakia: How It Works in Practice

To understand how much remains for a sole proprietor after paying all taxes and contributions, it's important to look at the calculations for different income levels.

First year of activity: ~7% tax burden with an income of €33,000. In the first year, the sole proprietor is exempt from social contributions, making the tax burden especially low.

Second year of activity: ~16% tax burden with an income of €33,000. From the second year, the entrepreneur becomes liable for social insurance (if exceeding the threshold), significantly increasing contributions.

👉 You can calculate your taxes using our online calculator. It correctly calculates income tax for incomes up to €50,000.

For income over €50,000, the tax and insurance burden increases sharply. In such cases, it is more economical to switch to an LLC, where the profit tax is 10%, and there are no fixed contributions.

⚠️ Important: If the income tax for the year exceeds €3,000, the sole proprietor is required to pay quarterly advance payments ^{(Slovak: preddavky na daň)} the following year. The amount of advance payments depends on the amount of income tax (min. €1,250.01 per quarter).

Examples of Tax and Contribution Calculations for Sole Proprietors

The tables below provide approximate figures for 2025. The model uses fixed expenses (60%, max. €20,000).

📊 First Year of Activity

Income	Income Tax	Health Contributions	Social Contributions	Transaction Tax	Net Profit
`€10,000`	`€0` / 0.00%	`€1,380` / 13.80%	`€0` / 0.00%	`€30` / 0.30%	`€8,590` / 85.90%
`€15,000`	`€37` / 0.25%	`€1,380` / 9.20%	`€0` / 0.00%	`€45` / 0.30%	`€13,538` / 90.25%
`€20,000`	`€336` / 1.68%	`€1,380` / 6.90%	`€0` / 0.00%	`€60` / 0.30%	`€18,224` / 91.12%
`€33,000`	`€1,116` / 3.38%	`€1,380` / 4.18%	`€0` / 0.00%	`€99` / 0.30%	`€30,405` / 92.14%
`€40,000`	`€2,136` / 5.34%	`€2,018` / 5.05%	`€0` / 0.00%	`€120` / 0.30%	`€35,726` / 89.32%
`€50,000`	`€3,808` / 7.62%	`€3,028` / 6.06%	`€0` / 0.00%	`€150` / 0.30%	`€43,014` / 86.03%
`€60,000`	`€5,683` / 9.47%	`€4,037` / 6.73%	`€0` / 0.00%	`€180` / 0.30%	`€50,100` / 83.50%
`€80,000`	`€9,000` / 11.25%	`€6,056` / 7.57%	`€0` / 0.00%	`€240` / 0.30%	`€64,704` / 80.88%
`€100,000`	`€12,000` / 12.00%	`€8,075` / 8.08%	`€0` / 0.00%	`€300` / 0.30%	`€79,625` / 79.63%
`€150,000`	`€29,593` / 19.73%	`€13,122` / 8.75%	`€0` / 0.00%	`€450` / 0.30%	`€106,835` / 71.22%
`€200,000`	`€42,093` / 21.05%	`€18,169` / 9.08%	`€0` / 0.00%	`€600` / 0.30%	`€139,138` / 69.57%

📊 Second Year of Activity (Sole Proprietor—Social Insurance Contributor)

Income	Income Tax	Health Contributions	Social Contributions	Transaction Tax	Net Profit
`€10,000`	`€0` / 0.00%	`€1,380` / 13.80%	`€3,051` / 30.51%	`€30` / 0.30%	`€5,539` / 55.39%
`€15,000`	`€37` / 0.25%	`€1,380` / 9.20%	`€3,051` / 20.34%	`€45` / 0.30%	`€10,487` / 69.91%
`€20,000`	`€336` / 1.68%	`€1,380` / 6.90%	`€3,051` / 15.26%	`€60` / 0.30%	`€15,173` / 75.87%
`€33,000`	`€1,116` / 3.38%	`€1,380` / 4.18%	`€3,051` / 9.25%	`€99` / 0.30%	`€27,354` / 82.89%
`€40,000`	`€2,136` / 5.34%	`€2,018` / 5.05%	`€4,461` / 11.15%	`€120` / 0.30%	`€31,265` / 78.16%
`€50,000`	`€3,808` / 7.62%	`€3,028` / 6.06%	`€6,692` / 13.38%	`€150` / 0.30%	`€36,322` / 72.64%
`€60,000`	`€5,683` / 9.47%	`€4,037` / 6.73%	`€8,923` / 14.87%	`€180` / 0.30%	`€41,177` / 68.63%
`€80,000`	`€9,000` / 11.25%	`€6,056` / 7.57%	`€13,384` / 16.73%	`€240` / 0.30%	`€51,320` / 64.15%
`€100,000`	`€12,000` / 12.00%	`€8,075` / 8.08%	`€17,846` / 17.85%	`€300` / 0.30%	`€61,779` / 61.78%
`€150,000`	`€29,593` / 19.73%	`€13,122` / 8.75%	`€29,000` / 19.33%	`€450` / 0.30%	`€77,835` / 51.89%
`€200,000`	`€42,093` / 21.05%	`€18,169` / 9.08%	`€40,154` / 20.08%	`€600` / 0.30%	`€98,984` / 49.49%

Conclusion:
✔ Income up to €33,000 — optimal for Sole Proprietors
✔ Income from €40,000 — contributions start to grow
✔ Income €60,000 and above — consider switching to LLC
✔ From €100,000 and above — operating as a Sole Proprietor is not cost-effective due to the enormous burden on income

When Is a Sole Proprietor with Income `€100,000` Beneficial?

Generally, with an income exceeding €33,000, operating as a Sole Proprietor becomes less advantageous. This is because fixed expenses account for 60% of income, but no more than €20,000. 60% of €33,000 is €19,800, almost the entire limit is used. With further income growth, the expenses remain the same, while the taxable base increases—along with taxes and contributions.

However, if your business involves high actual expenses and you keep track of them, you can reduce the tax burden even with high income.

📊 Tax and Contributions Calculation Depending on Expenses at Income €100,000

Expenses	Income Tax	Health Contributions	Social Contributions	Transaction Tax	Income Minus Taxes and Contributions
`€20,000`	`€12,000` / 60.00%	`€8,075` / 40.38%	`€17,846` / 89.23%	`€300` / 0.30%	`€61,779` / 61.78%
`€40,000`	`€9,000` / 22.50%	`€6,056` / 15.14%	`€13,384` / 33.46%	`€300` / 0.30%	`€71,260` / 71.26%
`€60,000`	`€5,683` / 9.47%	`€4,037` / 6.73%	`€8,923` / 14.87%	`€300` / 0.30%	`€81,057` / 81.06%
`€80,000`	`€2,136` / 2.67%	`€2,018` / 2.52%	`€3,051` / 3.81%	`€300` / 0.30%	`€92,495` / 92.50%
`€90,000`	`€636` / 0.71%	`€1,380` / 1.53%	`€3,051` / 3.39%	`€300` / 0.30%	`€94,633` / 94.63%

⚠️ Important: If your income (turnover/revenue) exceeds €50,000 per year, you may be required to register for VAT (Slovak: DPH). More details in a separate section below.

VAT (Slovak: DPH) in Slovakia for Sole Proprietors: Registration and Reporting

Sole proprietors in Slovakia can operate without registering for VAT as long as their turnover does not exceed the legal threshold. However, in some cases, registration is mandatory even with low income.

Mandatory Registration under the Main Scheme (According to §4 of the VAT Law)

A sole proprietor is obligated to register for VAT if their total turnover (all receipts from business activities) exceeds €50,000 for a calendar year. Only income from Slovakia is considered. Registration is mandatory not from the moment of exceeding the limit but from the beginning of the following month.

What is considered the "place of provision of services"? According to the VAT law, the place of service provision depends on: the country of the contractor's registration (Sole Proprietor); the status and country of the client.

Examples:

If the client is an individual (not an entrepreneur), the place of service provision is considered the country of the contractor's registration (Slovakia). This income is included in the €50,000 threshold.
If the client is a physical entrepreneur or legal entity from the EU, the place of service provision is the client's country, and this income is not included in the threshold for registration in Slovakia.

Specific examples:

A Slovak Sole Proprietor provides a service to an individual from Estonia—service provision place is Slovakia → this income counts towards the threshold.
If the same Sole Proprietor provides a service to a legal entity from Estonia—service provision place is Estonia → income does not count towards the €50,000 threshold.

Mandatory Registration under Other Articles (§7 / §7a)

Even with a turnover below €50,000, the entrepreneur must register under other provisions of the law if:

Under §7 — they purchase or receive services from suppliers from other EU countries (e.g., Google or Meta advertising).
Under §7a — they provide services to companies and entrepreneurs from other EU countries (B2B), and the client requires a VAT number to issue an invoice.

Registration under §7 / §7a must be done before providing/purchasing goods or services!

If you are registered under §7 or §7a, you are required to submit quarterly reports about transactions with EU counterparts (Slovak: súhrnný výkaz).

Reports are submitted only for quarters when goods or services were actually purchased or sold to EU clients.

Sole Proprietor Reporting in Slovakia: Deadlines for Declarations and Contributions

A Sole Proprietor must file an annual tax return if their income exceeds the legal threshold for the year. For 2025, this threshold is €2,823.24.

The standard deadline for filing the return is March 31. If necessary, it can be extended to June 30, by submitting a notification ^{(Slovak: oznámenie o predĺžení lehoty)} by March 31.

All sole proprietors in Slovakia, or their accountants, are required to submit their returns only electronically via the tax portal financnasprava.sk. For this, an electronic identifier (eID) with an activated signature is required, or a power of attorney if filed by an accountant.

Income tax must be paid by March 31 or by June 30 if the filing deadline was extended.

Health insurance will calculate the final amount at the end of the year (additional payments or refunds).

Social insurance will notify about contributions for the next period (from July 1 or October 1) if income exceeds the set threshold.

How We Help with Taxes and Reporting—Solutions from Oki-Doki.sk

We help sole proprietors not only with registration but also with business support at all stages:

✅ Accounting Services for Sole Proprietors — `from €30` per month

Tax return filing, VAT registration under §7a, contributions calculation, quarterly reports.
👉 More about accounting services for Sole Proprietors

✅ Free Online Tax Calculator

You can calculate the estimated tax burden and compare options:
👉 Go to the calculator

Taxes and Contributions for Sole Proprietorships in Slovakia in 2025