Student jobs in corona times
Students often combine their studies with jobs. To a certain extent, this is possible under special conditions, both in terms of social security and taxation. During the corona crisis, student jobs benefit from some extra facilities.
Social security measures
The scheme for student jobs primarily relates to social security. The aim of this beneficial regime is mainly to prevent undeclared work. Due to the favorable conditions regarding social security (and also for tax purposes) it is not worth the effort: the student barely has any advantage by working undeclared. On the contrary: by declaring his work, he can enjoy labor law protection, which is much more difficult with undeclared work. The employer also has more advantages than disadvantages with the correct registration of the employment contract.
In order to benefit from the special scheme for student work, a number of conditions apply.
First, the student must be old enough. In principle, this is as from the age of 16, exceptionally it is also possible as from the age of 15.
The employee must be a student, basically full-time. Part-time students can also do a student job, but then they cannot receive waiting allowances, they are not allowed to work during normal school hours and cannot work at the company where they receive their practical lessons.
The employment contract is limited to 12 months and the work may not take place during class hours.
The main limitation or condition is that the total number of hours that a person may perform as a student job may not exceed 475 hours. Each student receives a package of 475 hours (the quota) per calendar year. And on that package of 475 hours you pay less social contributions than a regular employee. The student can consult how many hours he/she has left via the Student@work application. You can work more than 475 hours, but as from the 476th hour worked, the social contributions will increase (both for the employee and the employer).
If all conditions are met, no standard social security contributions are due on the salary. However, a solidarity contribution is due. For the employee this amounts to 2,71% of the gross salary and for the employer the contribution is equal to 5,42% of this gross salary.
Please note that with respect to child allowances, limits apply to net livelihoods. This differs by region. In general, student work that falls within the above limits does not affect further child allowances.
Tax aspects to be taken into consideration
There are 3 tax aspects to be taken into consideration: the withholding tax on earned income, the personal income tax of the student and the personal income tax of the parents.
Regarding withholding tax, this is quite simple. If the labor agreement qualifies as student work for social security purposes (see above), the salary is not subject to withholding tax, so the student receives his gross salary.
It is therefore of key importance that the student does not work more than 475 hours in the given calendar year.
Should the employer withhold withholding tax after all, this can only be reclaimed by the student through his/her personal income tax return.
With respect to the personal income tax of the student: the student does not benefit from a special tax system. But that also means that if the student's income is lower than the tax-free minimum, he/she does not owe income tax.
For tax year 2020 (income 2019) this tax-free sum amounts to 8.860 euros and for tax year 2021 (income 2020) it amounts to 8.990 euros.
These tax-free amounts are net amounts: 8.990 net (if you use the standard calculation of the professional costs) corresponds to a gross amount of 12.842,85 euros.
And then there is the personal income tax of the parents: are children with a student job still considered dependent on their parents? In addition to the standard conditions that the child must be part of the family and must not receive income that is a professional cost of the parents, the child may only have limited livelihoods. There are 3 hypotheses with 3 different limits:
The child is dependent on both parents: 3.330 euros
The child is not disabled and dependent on one parent: 4.810 euros
The child is disabled and dependent on one parent: 6.110 euros
These amounts apply to income year 2019 (tax year 2020) and are net amounts (which equals the gross amount minus 20%).
Income from a student job up to 2.780 euros is not counted as own livelihood. This means that if a student is dependent on both parents, he/she can receive a gross income of 6.942,50 euros.
After all: 6.942,50 - 2.780,00 = 4.162,50 euros - 20% = 3.330 euros.
Depending on how many children there are, the student job can still cost some money if the student is no longer dependent on the parents.
Corona support for job students
As a measure to support student work during the corona crisis, the government decided to keep student work out of the quota during the second quarter of 2020 (April, May and June). This has 2 consequences:
The hours of the second quarter are not taken into consideration to calculate the 475 hours limit for 2020.
No withholding tax is deducted from this salary.
But be careful: the other restrictions (and we are thinking in particular of the rules regarding dependent persons for child allowances and tax) will continue to apply in full. Being allowed to work more often does not mean that you are left with more.