How to set up as an independent contractor in Slovakia

If you’ve decided to go it alone as an independent contractor, then Slovakia is an ideal location.

With friendly tax options for self-employed people, and the benefit of EU membership, this central European republic ticks all the right boxes. And whether you want to work from the modern capital Bratislava, the historic old town of Košice, of the stunning scenery of the High Tatras, it’s the perfect place to balance work and life.

Before you can start living the self-employed dream, though, you’ll need to know how to:

• Register your business in Slovakia

• Avoid misclassification as an employee

• Create compliant contracts that protect you

• Invoice and collect payments from around the world

In this article, we’ll cover all these things, and help you navigate your tax responsibilities as a self-employed worker. We’ll also discuss some of the other risks and liabilities you should be aware of.

First, it’s important to clarify how Slovakia defines independent contractors.

What is an independent contractor according to Slovak law?

Independent contractors are workers who provide paid services (or products) to another party. However, they are classified differently to employees, and are usually not entitled to the same benefits, such as paid leave, sick days, and minimum wage. On the flip side, contractors have more freedom and flexibility in the way they work.

See also: Why businesses hire contractors vs. international employees

In Slovakia, there is no specific law or code that exclusively covers the difference between employees and independent contractors. However, the country’s Labor Code clearly outlines the legal boundaries of employment relationships. Based on these guidelines, you are generally considered to be a contractor if you:

• Determine your own work schedule and working hours

• Perform work (or are able to) for other companies

• Set your own rates and scope of work

• Provide your own tools or equipment

• Are not integrated into one specific company and its operations (i.e. you don’t have an internal email address)

• Are able to delegate or subcontract work

• Work without direction or supervision

When you work with clients, it’s important to be correctly classified to avoid penalties and fines, and to ensure that you are paying the right taxes.

Business registration in Slovakia

Before you can begin working as an independent contractor in Slovakia, you’ll first need to choose a formal structure for your business.

The most popular model for sole owners is the sole trader (živnostníka) structure, as it’s quick and easy to set up and maintain. In this structure, you have full control of the enterprise, although there is no legal separation between you (the owner) and the business; you are personally responsible for all its debts and liabilities.

If you want more legal protection, you’re working with other partners, or you anticipate generating a large amount of revenue, you can also incorporate a formal company or enter into a partnership. If you’re unsure which structure is most suitable for your business, it’s a good idea to speak with a registered solicitor or accountant.

If you do opt for the sole trader model, you will need to acquire a trade license. This can be done in person at your nearest Trade Licensing Office (Živnostenský Úrad, or ŽÚ), or online through a government portal. Note that, if you register in person, the ŽÚ will automatically register you as self-employed with the state health insurance scheme.

Depending on your business activity, you will require one of three licenses:

• Unregulated trade license

• Regulated trade license

• Craft trade license

If you’re not sure which license you need, you can see a full list of trades and professions on the Interior Ministry website.

You must also register as self-employed with your local tax office. This must be done in person. If you acquired your trade license online, you must also register with the state health insurance scheme.

How do I get paid as an independent contractor in Slovakia?

As an independent contractor, it’s down to you to handle your invoices and payment collection. Unfortunately, this means billing each client individually and collecting payment through their preferred payment method — which can be inefficient and time-consuming.

Some of the most common ways to collect payments include:

• Bank transfers

• Direct deposits

• Paper checks

• Money orders

• Virtual wallets

• Digital transfer services like PayPal and Wise

These methods all have their own pros and cons. For instance, bank and digital transfers can be pretty quick, but often come with hefty service fees. And if you have clients in other countries besides Slovakia, the payment collection process can be even more complicated. 

Alternatively, you can use a trusted solution like Remote. Our platform is a simple, secure, and reliable way to get paid quickly in euros — and with no hidden fees. Learn more about how our platform can help.

Independent contractor taxes in Slovakia

As an independent contractor, you’re responsible for filing and paying your own taxes and health insurance contributions.

The good news is that, as a sole trader, you pay personal income tax on your business profits. This means you do not have to fill out extra returns, or pay additional corporate taxes.

If your annual income is lower than €38,553, you will be taxed at 19%; if your annual income exceeds this number, you will pay at the rate of 25%.

As a self-employed person, you must make advance payments throughout the year (based on estimates of your taxable income). At the end of the year, the Slovak tax authorities will then determine if you have underpaid or overpaid. You must submit your tax return by March 31.

You must also make health insurance contributions on a monthly basis (which are calculated based on your income). You are not required to make social security contributions, although it is generally recommended to do so.

On the plus side, you can claim tax deductions on multiple business expenses. In Slovakia, you can also claim business expenses as a percentage of your income (up to €20,000), which can be hugely beneficial if your expenses are low. Note that this option is only available for non-VAT payers.

VAT information for independent contractors in Slovakia

If your annual income exceeds €49,790, you will need to register for — and start charging your clients — VAT. You must file (and pay) VAT returns on a quarterly basis.

The standard VAT rate in Slovakia is 20%, although some goods and services are charged at the lower rate of 10%.

Liability considerations for independent contractors in Slovakia

As a sole proprietor, you are personally liable for finance and tax debts, which means your private assets can be forcibly used to settle your business debts. Many independent contractors purchase liability insurance to help mitigate this risk.

It’s also important to cover yourself when drafting and signing agreements with clients. Our legal experts can provide you with fully compliant contract templates, for both Slovak and international clients.

Accounting requirements for independent contractors in Slovakia

As a sole trader, you do not need to publish financial statements or accounts.

However, you must still keep organized, accurate records of all your income and expenditure (including client invoices, purchase orders, bank statements, and receipts). This will help you correctly file your taxes, give you a stronger picture of your financial situation, and generally make life easier if you are audited by the tax authorities.

While you can manage these records yourself (using an accounting or bookkeeping tool), it’s worth noting that tax laws change regularly in Slovakia. As a result, it may be a good idea to work with a professional bookkeeper or accountant.

The dangers of contractor misclassification in Slovakia

As we’ve mentioned, independent contractors are classified differently to employees in Slovakia. Many of the protections and benefits employees enjoy do not typically apply to contractors.

As a result, companies may deliberately misclassify you to circumvent their legal obligations, while at other times, it may happen accidentally. Whether it’s intentional or not, misclassification can result in penalties and fines for both you and your client.

As an independent contractor, you can work with your clients to ensure this doesn’t happen. Discuss your role and responsibilities with them, and review the working arrangement regularly.

If your working relationship changes over time and you become more integrated into a client’s company, you can ask to be converted into an employee.

Use our Contractor Compliance Checklist to avoid misclassification

Work through this checklist to help determine if a new hire should have a contractor or employee relationship.

Download

How do I ask the company I’m working with to convert me to an employee in Slovakia?

Open a dialogue with your client and carefully discuss the risks and benefits of moving to an employer-employee relationship. In particular, be clear about how it can benefit both parties — not just you.

You can even suggest the help of a third-party solution, such as Remote, to ease the transition. Our global employment services help both parties stay compliant by taking care of key HR functions (like payroll management and benefits administration) in line with Slovak law.

4 ways Remote makes life easier for contractors and their clients

As you can see, there’s a lot to take on board when setting up as an independent contractor. Remote can help you with many of these challenges, allowing you to focus on growing your business and delivering to your clients. Here’s how:

1. International payments in countries around the world

Navigating all of your clients’ different invoicing, approvals, and payments systems can be complicated and time-consuming. And manual methods of invoicing and collecting payments can increase the risk of fees, errors, and delays.

Remote gives you access to a highly secure, streamlined dashboard that makes invoice management and international payments cost-effective and efficient. You can use our platform to get paid in euros (or other currencies), without any hidden fees.

2. Localized in-app contracts and advice

When you draft agreements and contracts for your clients, you run the risk of non-compliance with local labor laws — especially when working with international clients. Remote offers localized contracts tailored to Slovak laws, ensuring that you stay compliant. Our legal experts can also provide guidance on complex issues, such as local classification and intellectual property protections.

3. Invoicing automation

With Remote, you no longer need to rely on spreadsheets and other manual tools to invoice for payments; we remove many of the inaccuracies and delays caused by archaic processes and manual management. Our platform lets you create invoices, submit them for approval, and subsequently get paid in your local currency without needing to switch to any other tool or software.

4. Tax management

Tax management is notoriously complex work. Remote helps you quickly and efficiently deal with tax management by compiling data about your income based on your invoices and payments received.

Setting up as an independent contractor in Slovakia

Having the freedom and flexibility to work on your own terms is liberating. But your administrative responsibilities can distract from what you really want to be doing: helping your clients, delivering great work, and collecting invoices.

By using a stable, trusted platform like Remote, you can manage these obligations quickly and efficiently, allowing you to focus on your business goals. Specifically, we can help you:

• Avoid intermediary fees and delays with international client payments

• Draft compliant contracts for Slovak and foreign clients

• Enhance your invoice management and avoid manual processes

• Comply with local labor laws regarding work practices

Our platform makes it quick, simple, and seamless to get started as an independent contractor. Learn more about how our expertise can save you time and resources today.