Živnosť or s.r.o.: which to choose in Slovakia in 2026
Everywhere this question gets the same answer: a trade licence is cheaper, a company looks more solid. Both statements are true and neither helps you decide.
The choice actually turns on something else: what you are liable with when something goes wrong, and where the numbers stop favouring one form over the other. Below is both, with the 2026 figures.
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The difference in short
A živnosť is you, doing business as a person. No separate legal entity, no share capital, minimal paperwork.
An s.r.o. is a separate legal person. It has its own assets, its own liability and its own tax return.
Everything else — price, speed, taxes, how clients read you — follows from that one distinction.
Liability is where to start
As a sole trader you are liable with everything you own. Not with what you invested in the business — with your property, your car, your savings. A claim against your business is a claim against you.
With an s.r.o. liability is limited to the company's assets. The important exception: a managing director who acts negligently or in breach of their duties can still be liable personally, and in Slovakia this is not theoretical.
For a consultant working alone with small contracts, the risk is modest. For anyone signing contracts with real penalties, holding stock, employing people or doing physical work on client premises, this single paragraph decides the question.
Cost and speed of starting
Živnosť: free trades cost 0 € electronically, craft trades 11 €. The licence arrives in 1–3 working days.
s.r.o.: about 220 € before 17 August 2026, over 500 € after — and from that date a notary or lawyer becomes mandatory. The full breakdown is in how to open an s.r.o..
Tax and contributions: the 2026 numbers
This is where the question is decided — but not where people usually look. The tax rates differ little. Contributions decide it.
Income tax
| Form | Income | Rate |
|---|---|---|
| s.r.o. | up to 100,000 € inclusive | 10 % |
| s.r.o. | 100,001 – 5,000,000 € | 21 % |
| s.r.o. | above 5,000,000 € | 24 % |
| Živnosť | up to 100,000 € inclusive | 15 % |
| Živnosť | above 100,000 € | 19 % on a base of roughly up to 43,983 €, then 25 % |
Add, for an s.r.o., a 7 % dividend tax to take the profit out to yourself.
On 100 euros of profit: the s.r.o. pays 10 € of tax, 90 € remains, 7 % dividend tax on that is 6.30 €. You receive 83.70 €, an effective rate of 16.3 %. The sole trader pays 15 %.
So on tax the difference is about one and a half percent, and it favours the trade licence. Every "a company is more profitable" conversation breaks down right here at small turnovers.
The sole trader's contributions — where the real money is
Health insurance: minimum monthly advance 121.92 € (16 % of the minimum base of 762 €). For people with a severe disability the rate is 8 %, so 60.96 €.
Social insurance: minimum standard contribution 303.11 € a month.
Total minimum: 425.03 € a month, about 5,100 € a year — regardless of what you earned.
That sum, not the tax rate, is what decides the choice.
What changes on 1 July 2026
The era of a fully contribution-free first year ends. A micro-contribution is introduced:
- 131.34 € a month for those whose 2025 annual income was between 2,876.91 and 9,144 €, and for new sole traders after six months of operating
- the threshold at which standard social contributions arise is 2025 annual income above 9,144 €
In practice: the first year of a trade licence used to be almost free on social insurance. The relief is now shorter and smaller, and it belongs in the calculation from the start rather than as a second-year surprise.
Lump-sum expenses and their ceiling
A sole trader can skip collecting receipts and deduct 60 % of taxable income. On top of that, 100 % of documented social and health contributions for the year are deductible.
But the lump sum has a limit: a maximum of 20,000 € a year, reached at an income of 33,333 €.
This is the important point. Below 33,333 € a year the deduction grows with income and a trade licence looks very attractive. Above it the deduction freezes while income keeps rising — the tax base starts growing faster than income, and the advantage gradually melts.
The lump sum is not available to VAT payers registered for the whole calendar year.
The short version on money
- Up to about 33,000 € of income a year a živnosť is usually better: the lump sum works at full strength and 5,100 € of contributions is bearable.
- Above that the advantage blurs: the deduction has hit its ceiling, the contributions have not gone anywhere, and the s.r.o.'s 10 % becomes interesting.
- If your costs are large and real — stock, rent, subcontractors — the lump sum loses its point; calculate on actual expenses, and there an s.r.o. at 10 % often wins.
Rates change annually and the burden depends on your cost ratio and on how much you actually take out. Run these numbers on your own turnover with an accountant before deciding — between the two forms the difference is measured in thousands of euros a year.
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How clients read you
In B2B an s.r.o. is read as a more serious counterparty. Not because of the law but because of habit: a company implies a structure that outlives one person.
In B2C it makes almost no difference. A private client looks at reviews, price and how quickly you reply.
What happens when the business grows
A trade licence does not scale. Taking on a partner, selling the business, bringing in an investor — all of it requires a legal entity. A company can be sold; a trade licence cannot, because it is you.
If growth is part of the plan, the question is not whether to have an s.r.o. but when — and doing it later means migrating contracts, invoices, the bank account and usually the website with all its details.
Both forms need the same things
Whichever you choose, the following applies:
- mandatory details on the website — the list differs slightly between forms, see here
- a cookie banner if there is analytics or advertising on the site
- an eKasa if you take cash or card on the spot — when it is required
- VAT registration once turnover crosses the threshold — the two thresholds
If you need the digital side
Whichever form you pick, the website carries your details, and they differ between a sole trader and a company. I build sites where that is right from day one rather than patched after the first inspection.
I have lived in Slovakia for over ten years and launched 12+ websites for Slovak companies. I work as a Slovak s.r.o. and issue a faktúra with an IČO.
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