In which situations do young people most often lose money unnecessarily?

Young people most often lose money in two ways: they either fail to reclaim tax that could be refunded to them, or they choose an unsuitable structure for their work or business activities.

Those working part-time often do not file a tax return even though they may be entitled to a refund. Employees and people working under various work agreements may fail to claim all the tax allowances or tax credits to which they are entitled. Similarly, people in business sometimes fail to claim certain eligible expenses.

With passive income, such as investments in different types of assets including securities, cryptocurrencies, derivatives and possibly real estate, the way the investment is structured may itself be tax-inefficient.

What mistakes do young people make with part-time jobs, freelance work or self-employment?

These are different categories of income.

For part-time work, students should ideally work under a student temporary work agreement. This allows them to claim an exemption from social insurance contributions on earnings of up to EUR 200 per month under one agreement. If they earn more, contributions are payable only on the amount above this threshold.

Another mistake is failing to file a tax return voluntarily when there is no obligation to do so because taxable income did not exceed 50% of the tax-free personal allowance. By filing a return, the taxpayer can often claim a refund of overpaid tax.

Freelancing is not a legal form; it is a way of working. From a tax perspective, it matters whether a person works as an employee, under a work agreement, as an author, as a sole trader or through a company. This is where a degree of legitimate tax optimisation may be possible by choosing the appropriate legal arrangement. In addition to operating as a sole trader, young people may consider active or passive copyright agreements or establishing their own company, either from the outset or at a later stage of the business.

Any such arrangement must, of course, reflect the economic reality. In practice, the authorities frequently examine cases in which what is effectively dependent employment is performed under a commercial-law arrangement, such as a trade licence.

Another common source of mistakes is determining when an occasional activity becomes a business activity requiring a trade licence. From a legal, tax and social insurance perspective, the dividing line can sometimes be very thin. Selling goods through online platforms and the activities of influencers or YouTubers are good examples.

Young people also tend to underestimate administrative requirements, particularly the need to keep records of income and expenses, maintain accounts where required and monitor all the administrative obligations associated with running a business.

Are there cases where young people pay more tax or social insurance contributions simply because they do not know the basic rules?

Definitely. We have already mentioned several examples.

For part-time work, filing a tax return is often beneficial even when there is no obligation to do so.

For business activities, it is a question not only of choosing the appropriate business structure, but also of determining which expenses the taxpayer claims and, in the case of a sole trader, whether flat-rate or actual expenses are more advantageous.

Which expenses do young sole traders often fail to claim even though they could?

Anyone who decides to operate as a sole trader should calculate whether it is more efficient to claim flat-rate expenses equal to 60% of business income, plus social and health insurance contributions, or to claim actual expenses.

Actual expenses must meet the general tax-deductibility test: they must be incurred to generate, maintain or secure the taxpayer’s taxable income. In practice, taxpayers more often include costs that are not fully related to their business, particularly personal consumption expenses.

On the other hand, there are also situations in which taxpayers fail to claim expenses to the full extent permitted by law. Young sole traders often overlook costs such as laptops, phones, software, internet access, professional courses, advertising, coworking spaces and travel, particularly when an asset is used only partly for business purposes. Where an asset is used for both business and private purposes, tax legislation allows a taxpayer to claim 80% of the cost of acquiring, repairing or maintaining it as an expense.

What do young people most often overlook when filing a tax return?

Young people often overlook the most basic point: filing a tax return may be worthwhile even when they are not required to do so. For example, an employer may have withheld advance tax payments from income earned through a part-time job or work agreement during the year, and the individual may be able to reclaim the overpayment through a tax return.

Another common mistake is failing to include all income in the tax return. Many people remember income from a part-time job or self-employment but forget, for example, certain income from investments in shares or cryptocurrencies, online platforms or various commercial collaborations.

A third mistake concerns occasional income. Young people sometimes assume that any supplementary income of up to EUR 500 is automatically exempt from tax. That is not how the exemption works. It does not apply to every type of income — in simplified terms, it applies only to income received from individuals who are not entrepreneurs — and certainly not to regular activity that may have the characteristics of a business.

A very practical mistake is that sole traders forget they must file their tax returns electronically. Printing, signing and delivering the return to the tax office is not sufficient.

Paper tax returns, where permitted, are also prone to formal errors, such as using the wrong form, omitting a signature, or failing to attach the required annexes or income certificates. The tax authority will often point out these errors, but they unnecessarily prolong the entire process.

Influencers and online content creators are a separate topic. If someone receives a product, clothing, equipment, a hotel stay or another non-cash benefit in exchange for promotion, it may not qualify as a tax-exempt gift — particularly if it is connected with their employment or business activities. It may therefore constitute taxable income even if no monetary payment reaches their bank account.

What mistakes do people make when they start earning extra income through social media, brand collaborations or online projects?

Many people who earn regular income through social media do not realise that their activity may constitute a form of business. Whether they provide advertising services, create digital content or offer other online services, a regular activity carried out for profit is very likely to be considered a business. This may require a trade licence and bring related tax and social insurance obligations. It makes no difference whether the income is received in cash or in kind. If an influencer receives money, a barter arrangement, a hotel stay, clothing or equipment in exchange for promotion, this may be taxable income. Whether money reaches their account or they receive “only a free product” is not decisive.

Nor can they assume that the tax authority will not learn about this income. On the contrary, European regulations require these companies to report income to the financial authorities.

If you could give young people one piece of advice that could save them the most money, what would it be?

As the saying goes, it is too late to start dealing with taxes only when a letter from the authorities arrives. From the moment people begin earning income, they should understand whether it comes from a part-time job, a business, copyright royalties, investments or social media collaborations.

Although people should focus primarily on what they do best, they should also consider taxes, social insurance contributions and basic administrative obligations from the outset.

A basic overview is enough to begin with: what will I be doing, what type of income will I earn, and what options and obligations will follow? At some point, it will certainly be sensible to discuss these matters with professionals. This can reduce costs as well as potential risks and penalties. Most importantly, it leaves taxpayers with more time and energy to focus on the core activities in which they are the experts.