As of July 1, 2020, the monthly premium and service statement submitted to the Social Security Institution (SGK) and the withholding tax return filed with the tax office are combined into a single document called the “withholding and premium service declaration.” Although the single-declaration system has been in effect, many employers still have questions about how it works. Below are clear answers to the most frequently asked questions to help employers comply with the rules.
Single-Document Period
Although the withholding and premium declaration has been consolidated into one document starting from the July 2020 reporting period, employers still submit separate insurance notifications to SGK and withholding reports to the tax office. This separation has caused confusion, so the following frequently asked questions and answers clarify common issues within the applicable legislation.
- Who must submit the withholding and premium service declaration?
- Those required to submit the withholding and premium service declaration are employers who must report persons insured under subparagraph (a) of the first paragraph of Article 4 of Law No. 5510. Additionally, entities subject to insurance for personnel of pension funds are responsible for withholding unemployment insurance premiums and must report accordingly.
- Is the withholding and premium service declaration submitted electronically?
- Under Article 257 of Tax Procedure Law No. 213 and Article 100 of Law No. 5510, withholding and premium service declarations must be submitted electronically. These declarations are not accepted on paper under any circumstance.
- When must the withholding and premium service declaration be submitted?
- The declaration containing the earnings and service information that form the basis for the current month’s premiums must be submitted no later than the 26th day of the following month by 23:59.
- For completed private building construction or contracted projects, can the declaration be submitted before the following month?
- For completed private building construction and contracted works where all employed insured persons have had termination notices submitted, it is possible to file a declaration that contains only the earnings and service information relevant for premiums within the month when the transactions occurred, without waiting for the next month.
- Under what conditions is the declaration considered submitted to the Social Security Institution?
- Within the scope of Law No. 5510, a declaration that contains the earnings and service data used to calculate premiums for insured persons at each workplace will be deemed submitted to SGK when the employer or an authorized intermediary (a natural or legal person with authorization) approves it and files it with the tax office.
- If there is an error in the declaration submission, will the declaration be accepted?
- No. A declaration will not be accepted if it contains an error that prevents premium accrual. When such an error is detected, the error and its source must be reported electronically, and the filing party is required to correct the mistake. The declaration will be requested again and accepted only after the identified errors are fixed.
- Are the requested declaration details filled out for each insured individual?
- The declaration must include earnings and service details that constitute the basis for premiums, and these details should be completed on a per-workplace, per-insured basis.
- When submitting a correction declaration for earnings and service information, should it include only the employees being corrected?
- When filing a correction declaration for the earnings and service data, you may either re-enter all information or cancel the previous declaration and enter only the items to be changed or added. To proceed with partial changes, you must check the box on the correction declaration that states: “I declare that, except for the changes and additions shown in the table below, the information I previously declared for the insured employee(s) for this period remains the same.”
If you have specific circumstances or need help preparing or correcting a declaration, consult your payroll or accounting professional who is familiar with electronic submissions to the tax office and SGK to ensure compliance with the applicable procedures and deadlines.