Sole Trader or Employment Contract: Where Do You Earn More in Slovakia?

Working as a sole trader (self-employed) is not employment in the traditional sense but rather a partnership between two independent parties: an entrepreneur and a client company. This type of cooperation is regulated not by the Slovak Labor Code but by civil law, which means there are no formal employment obligations. As a result, the income (remuneration) is often higher.

For companies, working with a sole trader is beneficial because it reduces their expenses. The company is not required to pay your social and insurance contributions (which are about 35.2% of the salary under a regular employment contract), withhold taxes (another approximately 13.4%), or comply with rules related to paid leave, sick leave, and compensation.

If you sign a service agreement or mandate contract with a company as a sole trader, the employer does not pay taxes on your behalf, does not provide paid vacation, and does not compensate for periods of illness. Thanks to these savings (up to 40–50%), part of the money can be redirected to you in the form of a higher income.

However, the responsibility is entirely yours. As a sole trader, you must pay your own taxes and contributions, you do not have the rights guaranteed by labor legislation, and you assume entrepreneurial risks: if you get sick, you do not earn money; if a dispute arises, you must defend yourself. There is no guarantee of employment, stable income, or compensation in case the contract is terminated. You also do not receive paid vacation or maternity leave.

The company is not obliged to follow the same rules as with a hired employee — neither regarding the minimum wage nor the timing of payments. Formally, this is not employment, although in practice such relationships often resemble regular employment, which in some cases may be considered a violation of the law.

What do you lose by agreeing to this format in Slovakia?

• No stability: the contract may not be renewed at any time.
• No social guarantees: vacation, sick leave, and maternity leave are at your own expense.
• Limited pension record: retirement benefits depend entirely on your contributions.
• No legal protection as an employee: in case of conflict, you are a contractor, not a staff member.

This option may be beneficial in the short term or in certain circumstances, but it requires a conscious approach, legal awareness, and a clear understanding of all the risks.

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