Supplementary Pension for Self-Employed Individuals: what are the tax advantages and how can you optimise them?

Supplementary pension for self-employed individuals: what is it?

In Belgium, the statutory pension for the self-employed is relatively low. To maintain a sufficient standard of living when you retire, it makes sense to save through a supplementary pension plan, such as the supplementary pension plan for self-employed individuals (PLCI -Pension Libre Complémentaire pour Indépendants). This is a branch 21 pension plan which protects the capital paid in for your pension, and is specifically designed for the self-employed.

This plan enables you to build up retirement capital for the future while immediately benefiting from significant tax advantages.

Thanks to this tax benefit, you pay less tax and lower social security contributions. What’s more, it’s easy to optimise the scheme to make the most of it.

PLCI and tax advantages: how does it work?

The PLCI premium that you pay each year to build your supplementary pension fund is tax-deductible as a business expense. This reduces your taxable professional income, which is used to calculate your income tax and social security contributions as a self-employed person.

In short, the higher your PLCI premium, the more tax and contributions you save, while building up more for your retirement.

How can I maximise the tax advantage of the PLCI and what is the legal ceiling?

Your tax advantage is not unlimited: the law sets a maximum deductible amount for your PLCI premium, based on two criteria.

The maximum deductible premium must not exceed:

• 8.17% of your reference taxable income, i.e. your indexed net taxable professional income from three years ago
• AND an absolute ceiling of €4,000.44 for income year 2025 (this amount may be indexed annually)

The PLCI: additional cover and a higher tax advantage

The social PLCI is a specific form of PLCI that offers:

• Additional protection without prior medical formalities in the event of incapacity for work, maternity and death
• The opportunity to save more and claim a higher tax deduction: 9.40% of your reference income, up to a maximum of €4,602.71 for 2025.

Adjusting your PLCI premium to save more and deduct more. Two options :

To benefit from the maximum tax deduction, your annual PLCI premium must match the legal ceiling. This means ensuring that your premium is aligned with the evolution of your reference income each year.

Have you taken out AG’s Supplementary Pension for Self-employed Individuals? 

Automatic optimisation of your tax advantage

You can choose to have your premium calculated as a percentage of your income (max. 8.17%). In this case, your premium will be adjusted automatically each year based on your reference income, which is communicated to AG by Sigedis, a public asset company.  This means that your premium and your tax benefit may increase or decrease depending on changes to your income.

Manual optimisation: where can you find your reference income?

Have you chosen a fixed premium amount that is supposed to stay the same year after year?  But you still want to maximise your tax advantage? You will need to manually check your ceiling based on your net taxable professional income from three years ago. You can find this reference income on the payment notice for your social security contributions.

Example and optimisation calculation with an AG PLCI *

Arthur is 40 years old and pays a fixed annual amount of €2,000 into his PLCI. His reference income is €35,000. This year he could pay €2,859.50 (which is 8.17% of €35,000).

	Fixed annual premium of €2,000 paid until retirement	Optimised premium of €2,859.5 (8.17% of €35,000), recalculated each year
Gross pension capital at age 67 (excluding profit sharing and based on a basic rate of 2%)	€66.220,31	€94.678,50
Gross pension capital at age 67 (based on a basic rate of 2% and including net profit sharing of 0.55%)	€71.895,25	€102.792,27
Annual saving on social security contributions (20.50%)	€410	€586,19
Annual tax saving (42.80%), including 7% municipal tax following deduction	€680,52	€972,97
Actual cost of the premium	€909,48	€1.300,34

*In the example, a maximum entry fee of 6% is applied.

Other benefits of your supplementary pension

Unable to work due to illness or an accident? As a self-employed person, this immediately results in lost income. The benefits provided by your health insurance fund, which you are entitled to from the eighth day of incapacity, are often not enough to maintain your standard of living.

Choose to protect yourself in case of disability

By adding the 'incapacity for work' supplementary cover to your PLCI contract, you add an additional layer of protection to your income, without needing to take out a separate ‘guaranteed income’ policy. In the event of incapacity, you will receive a monthly replacement income in addition to your statutory allowance from your mutual insurance company.

Incapacity: include cover for the repayment of your premium

You can also provide cover for the repayment of your PLCI premium while you are no longer able to work, including for the premium of this “incapacity for work” supplementary cover.

Act now! How can you make the most of your supplementary pension?

 No pension plan yet?

• Discover the benefits of all supplementary pension plans for the self-employed.
• Learn more about the PLCI and the extra cover in the event of incapacity for work.

Would you like to optimise your pension plan?

• Make an appointment with an advisor or your relationship manager to maximise your tax advantage and reduce both your taxes and social security contributions.