Introduction

When an employee receives their salary, it is generally subject to deductions like taxes and Social Security Contribution (SSC). In Indigo, to define how much taxes and SSC should be deducted, there are two fields in the employee's profile that need to be accurately set up: Tax Profile (for taxes) and Employment Type (for SSC).

In this article, we’ll take a closer look at these fields and how the combination of the two shapes the employee’s overall taxation and SSC deduction.

Employment Type

The Employment Type tells Indigo how SSC should be calculated. It defines the contract type on a time basis, but not the actual hours to be worked–those need to be specified in the Work Schedule profile instead.

When combined, the Employment Type and Work Schedule Profile fields help Indigo apply the correct SSC for every situation, even when different employees work different shift patterns under the same employment type.

The Employment Types are:

Full Time: the employee works 40 hours a week. SSC is deducted and matched by the employer according to the category.
Reduced Fixed Hours: the employee works a fixed number of hours which is less than 40 hours a week. SSC is deducted based on the reduced weekly wage and matched by the employer according to the category.
Hourly: the employee works a variable number of hours a week. SSC changes with the hours worked, as weekly earnings fluctuate. Categories are still applicable.

⚠️ Important

No SSC should be deducted if:

The employee is 65 or older
The employee works with you as their second job. More on this 👉 here.

In such cases, for the SSC Type dropdown, select the option 'No Social Security'. ⬇️

➡️ Set up Employment Types ⬅️

Tax Profile

A person can have more than one job and the MTCA (former CFR) needs to classify each job so that the correct tax rate can be applied. That's what Tax Profiles do. There are two major classifications: Main and Part-time. A Main job can be 40hours a week (full-time), but doesn't have to be. A Part-time job by definition is a job of less than 40 hours a week.

Main

This refers to the employee’s main source of income, which is subject to both taxation and SSC. Within the Main category, the MTCA further classifies employees based on their personal status, as this affects their tax rates:

Main Single
Main Married
Main Parent

The last two have their own subcategories according to the number of children. (More on this topic in this 👉 article.)

Part-time

This always refers to a secondary job, meaning the employee has a different main job. Their secondary job is also subject to taxation, but not subject to SSC.

In this case:

The company is not responsible for SSC deductions.
The earned income, up to €10,000 per year, is taxed at a flat rate of 10%. Any income above €10,000 is taxed at the standard rates.

⚠️ Important ⚠️

SSC can only be deducted from the main source of income. This means that SSC is only paid on behalf of the employee by their main employer.

➡️ Set up Tax Profiles ⬅️

🧠 Full Time Vs Main: Wording Matters in Indigo

Sometimes the words Full Time and Main are used interchangeably, even though in Indigo they refer to two different concepts. This happens because:

A Full Time job (40 hours per week) is almost always the job the employee earns the most from.
Since higher earnings lead to higher SSC contributions—and therefore a better pension—employees generally choose their highest‑earning job as their Main job.
Because of this, the Full Time job is identified as the Main job in most real‑world situations.

However, the reverse isn’t always true:

A Main job is not always Full Time; it can also be Reduced Fixed Hours or Hourly.
Ultimately, it’s up to the employee to decide which of their jobs should be considered their main source of income.

See a quick visual representation below:

Employment Type ➡️ Tax Profile ⬇️	Full Time	Reduced Fixed Hours	Hourly
Main	✅	✅	✅
Part-time	❌	✅	✅

Combinations

Now let's focus on some common scenarios and their corresponding Tax Profile and Employment Type combinations.