- Third semester: 186.25 euros, for a 30% reduction in the fee.
Posted: Thu Dec 26, 2024 4:28 am
The idea of starting a business crosses the minds of many young people who are tired of not finding a decent job. Starting an adventure alone or in company involves a series of risks that must be taken into account when making such an important decision for your future.
Is it really worth it to be self-employed? This is the question we will try to answer in the following lines and in another subsequent post.
First of all, you should know that working for yourself is not cheap. You need to estimate whether, with the income you expect to receive, it is worth registering as self-employed and paying the taxes that this entails. A significant number of young people opt for the underground economy if they do not earn the minimum wage (648.60€/month), committing an illegal act that can lead to a significant fine.
Two options to issue an invoice legally
Register with Social Security as a self-employed person.
Register with the Tax Agency , which would require you to submit quarterly and annual VAT and personal income tax returns. In this case, you would invoice using your NIF.
If you choose the first option, you should be aware of the grants and subsidies you may be eligible for.
Aid and subsidies for people under 30 years of age
Flat rate: you must apply for it when registering with the RETA (Special Regime for Self-Employed Workers). The amount to be paid to Social Security varies over the first 18 months of activity, so three reduction brackets are established on the base and minimum contribution rate.
- First semester: 50 euros exactly. This amount came into colombia mobile phone numbers database effect on 10 October 2015, until then it amounted to an 80% reduction in the fee (53.39€).
- Second semester: 134.06 euros for a 50% reduction in the fee.
Once the benefits have ended, the minimum monthly fee will be 267.04 euros.
Bonuses: women under 35 and men under 30 will benefit from a reduction in the common contingency fee and a 30% bonus on their contributions for two and a half years from the date of registration. The minimum fee will be 185.10 euros per month.
This aid is incompatible with the flat rate, you have to choose one or the other.
In the case of young people under 35 years of age with a recognised degree of disability equal to or greater than 33%, the 80% reduction will apply during the first twelve months from the date of registration and, afterwards, the 50% bonus will be maintained for a maximum of five years.
After learning about the aid and subsidies that young people have access to in order to become self-employed, it is time to discuss the two main disadvantages of this alternative for the future.
Disadvantages of becoming self-employed
The minimum Social Security contribution is independent of the level of income and the time spent working. In other words, the law does not distinguish between someone who spends 40 hours a week on his business and someone who gives private lessons at an academy three afternoons a week, nor does it differentiate between someone who earns 10,000 euros and someone who earns 500.
Every three months you must declare VAT and personal income tax , regardless of whether the invoices have been collected or not.
Now that we know the difficulties of being self-employed in Spain without prospects of a large income, we propose a simpler and more profitable legal alternative when launching your own business: becoming a member of a worker cooperative.
The cooperative is responsible for all the invoicing procedures, so you provide your client with their tax information, not yours. You only have to communicate the invoice amount to the association, which is responsible for collecting payment from the client and, once payment has been received, giving you a statement of income, deducting:
The cost of Social Security : you will pay into the General Regime for the time you indicate as worked: hours, days, etc.
The IRPF retention , generally 2%.
Civil Liability Insurance (€1 per day of contributions) and Occupational Risk Certificate (1% of the total amount), in case you do not have them.
Management costs (between 4 and 8%).
As you can see, with a cooperative you save yourself the tax obligations of self-employed workers. In addition, in the months that you do not invoice, you do not pay social security or commissions.
The only requirement to join these associations is to pay a small entry fee , which in most cases is fully refunded when you leave.
Self-employed advantages
Some of the best-known cooperatives in Spain are: Freeautónomos ; SBP-CA (for journalists); or SMartIb (for artistic and cultural projects).
After learning this information, you are better prepared to make a decision about your future. Good luck!
Is it really worth it to be self-employed? This is the question we will try to answer in the following lines and in another subsequent post.
First of all, you should know that working for yourself is not cheap. You need to estimate whether, with the income you expect to receive, it is worth registering as self-employed and paying the taxes that this entails. A significant number of young people opt for the underground economy if they do not earn the minimum wage (648.60€/month), committing an illegal act that can lead to a significant fine.
Two options to issue an invoice legally
Register with Social Security as a self-employed person.
Register with the Tax Agency , which would require you to submit quarterly and annual VAT and personal income tax returns. In this case, you would invoice using your NIF.
If you choose the first option, you should be aware of the grants and subsidies you may be eligible for.
Aid and subsidies for people under 30 years of age
Flat rate: you must apply for it when registering with the RETA (Special Regime for Self-Employed Workers). The amount to be paid to Social Security varies over the first 18 months of activity, so three reduction brackets are established on the base and minimum contribution rate.
- First semester: 50 euros exactly. This amount came into colombia mobile phone numbers database effect on 10 October 2015, until then it amounted to an 80% reduction in the fee (53.39€).
- Second semester: 134.06 euros for a 50% reduction in the fee.
Once the benefits have ended, the minimum monthly fee will be 267.04 euros.
Bonuses: women under 35 and men under 30 will benefit from a reduction in the common contingency fee and a 30% bonus on their contributions for two and a half years from the date of registration. The minimum fee will be 185.10 euros per month.
This aid is incompatible with the flat rate, you have to choose one or the other.
In the case of young people under 35 years of age with a recognised degree of disability equal to or greater than 33%, the 80% reduction will apply during the first twelve months from the date of registration and, afterwards, the 50% bonus will be maintained for a maximum of five years.
After learning about the aid and subsidies that young people have access to in order to become self-employed, it is time to discuss the two main disadvantages of this alternative for the future.
Disadvantages of becoming self-employed
The minimum Social Security contribution is independent of the level of income and the time spent working. In other words, the law does not distinguish between someone who spends 40 hours a week on his business and someone who gives private lessons at an academy three afternoons a week, nor does it differentiate between someone who earns 10,000 euros and someone who earns 500.
Every three months you must declare VAT and personal income tax , regardless of whether the invoices have been collected or not.
Now that we know the difficulties of being self-employed in Spain without prospects of a large income, we propose a simpler and more profitable legal alternative when launching your own business: becoming a member of a worker cooperative.
The cooperative is responsible for all the invoicing procedures, so you provide your client with their tax information, not yours. You only have to communicate the invoice amount to the association, which is responsible for collecting payment from the client and, once payment has been received, giving you a statement of income, deducting:
The cost of Social Security : you will pay into the General Regime for the time you indicate as worked: hours, days, etc.
The IRPF retention , generally 2%.
Civil Liability Insurance (€1 per day of contributions) and Occupational Risk Certificate (1% of the total amount), in case you do not have them.
Management costs (between 4 and 8%).
As you can see, with a cooperative you save yourself the tax obligations of self-employed workers. In addition, in the months that you do not invoice, you do not pay social security or commissions.
The only requirement to join these associations is to pay a small entry fee , which in most cases is fully refunded when you leave.
Self-employed advantages
Some of the best-known cooperatives in Spain are: Freeautónomos ; SBP-CA (for journalists); or SMartIb (for artistic and cultural projects).
After learning this information, you are better prepared to make a decision about your future. Good luck!