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What is the social security compensation 4%?

Last updated: October 27, 2022

The INPS compensation corresponds to an increase, for a maximum of 4%, to be applied to the gross remuneration invoiced by freelancers registered in the Separate management. This percentage can be charged to customers in the invoice as a social security contribution. The amount requested as compensation corresponds to 4% of all social security contributions, or 26.23% of turnover, which the freelancer must pay for each service rendered during the year.

Is the 4% INPS compensation mandatory?

The 4% INPS compensation to be added to the invoice is absolutely optional. In any case, it is strongly recommendable to agree immediately with the customer whether or not the compensation will be requested and included in the invoice.

Does it contribute to income?

Absolutely yes! There is a difference between social security contributions (deductible) and INPS compensation. The latter is in fact an increase in the remuneration and contributes to the determination of income.

Who should proceed with the payment?

The client who receives the professional's invoice is required to pay the full amount, including the increase of up to 4%. The freelancer will then decide how and where to keep the sum relating to the contributions, as well as to use it when it is necessary to pay the INPS contributions due.

How is the compensation applied?

Anticipating the presence of INPS compensation into the invoice is essential. This, in fact, allows you to avoid misunderstandings and tensions. Specifying whether the established amount is net or gross of 4% is a due deed, and can be presented in the negotiation, agreement and contract phase. If the latter bears the words "remuneration / consideration including all charges", then it is not possible to add the aforementioned percentage. Differently, if it is specified that the fee is to be considered net, it is possible to charge the client an additional 4%, adding this amount to the initial amount.

4% social security compensation in the flat-rate scheme

Freelancers adhering to the Flat Rate Scheme, in the event of an agreement for the request for INPS 4% compensation, must report the following informations on the invoice.

  • Compensation € 1,000.00

  • 4% INPS compensation: € 40.00

  • Revenue stamp: € 2.00

  • TOTAL: 1,042.00 euros

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