[allie1]

I fully agree with all your points, but it still doesn’t make sense to me that they need to back-pay for health insurance as one of the regular welfare payments, when they haven’t had the opportunity to use it during that period.

[necovek]

Well, if they've paid it on time, they would have had an ability to use it. :)

Generally, taxes for public services are paid even if you don't use them — it's the nature of the beast. Many people with decent income in Serbia almost exclusively use private healthcare because of the annoying see-a-GP-to-be-scheduled-to-see-a-specialist-in-several-months dance, yet they are obligated to pay for it.

But sure, it still feels bad for whoever has to pay (it's like a car loan that you want to pay off, and you still owe more than what the car is worth at that point: feels terrible, but that's your legal obligation).

[allie1]

I was under the impression that for freelance income it was only a personal income tax. What you are referring to is for employees: https://en.m.wikipedia.org/wiki/Taxation_in_Serbia

Are freelancers considered employees here?

[necovek]

Income tax rates apply to any income from work, including contracted temporary work (including specifically "authorship works" which IT services generally fell under and which get 20% "normalized expenses", though if your actual costs are higher, you _can_ document expenses instead). Method of calculation is slightly different because of expenses and treatment of gross income, but rates are the same by law.

They are, however, not treated as employees (which have a lot of protections like minimum hourly wage, maximum working hours, maximum daily and weekly overtime hours, minimum number of paid vacation days, sick leave coverage at 60% of salary...). For freelancers, this does cause trouble with the pension fund employees not wanting to count your contributions toward your pension, but it depends heavily on who deals with processing your forms.

[necovek]

And to further clarify, as early as 2008 when I looked at it first, social insurance payments were required at the same rates employers and employees pay, with the main benefit being that if you already have other income (eg salary), your total social contributions should are capped at 5 times the average (eg if you've got a 3x the average salary, and a side gig getting you another 3x the average salary, you'd only be paying self-reported social insurance taxes on the extra 2x average salary).

[necovek]

Btw, this problem is endemic to all public services in Serbia. If you skip your self-registered healthcare payments for 6 months, you won't be able to use the services, but government will still charge you until you pay up, instead of voiding your contract.

I agree this should be fixed elsewhere too, not just in the case of back-taxation.