Autónomo (Self Employed) in Spain
Summary – Becoming Autónomo
*Please note, this is a summary of the full article below. For detailed information, please read the complete article.
If you wish to work as a self employed worker in Spain, you have to become autónomo. For the first year, this will cost an average of between 80 and 150 euros per month in fixed fees (social security and tax advisor/accountancy). Plus you will have to pay IVA (VAT) and IRPF (income tax, which you may get back the following year). The fixed fees will increase after the first year or two, depending on your circumstances.
You must calculate whether becoming autónomo is the best option for you based on your expected income for the first year of business. Becoming autónomo does has it’s benefits. You contribute to the social security system and therefore have full access the the Spanish health system for you and your family. You contribute to and validate your Spanish state pension and in most cases you have access to sick pay if you cannot work. Becoming autónomo makes you a fully legal worker in Spain.
Full Article or Translation
Becoming autónomo in Spain essentially means registering with and paying two state departments, the social security office and the hacienda:
Registering with the social security gives you access to three benefits – Public health care for you and your family, a state pension (minimum working period required) and sick pay if you cannot work (minimum working period required).
In order to access these benefits, you must pay a fixed monthly fee on the last day of each month. For the first 12 months, this fee is heavily reduced and ranges from 60 euros to 120 euros depending on your age (and in some cases your profession). If you live in a rural community (less than 5000 inhabitants), this reduced fee may be extended to two full years depending on the type of work activity. In most cases, the reduced payment amount increases after the first year and goes up incrementally over the following year (first 6 months at 120 euros then second 6 months to 200 euros for example). Once you have completed two full years of work, you will pay the full amount for autónomo which is currently set at 283 euros per month (this is the minimum amount payable). To calculate your autónomo fee, please see the calculator at the bottom of this article.
The Hacienda is Spain’s central tax department. At the end of each quarter, you must present all of your invoices for income and outgoings and pay 20% of all profits as IRPF (income tax). Depending on your end of year tax return (Declaración de la renta — April-June of the following year), this money will be return or kept as income tax.
IVA (VAT) accumulated from sales must be paid to hacienda at the end of each quarter. As an autónomo, you can deduct IVA from purchases made for your working activity. For example, for products that you resell to clients, consumables and any investment that you make into your business.
This does not affect all autónomo workers, but if you provide a service for another business, you should deduct ‘retenciones’ from the invoice. Please speak to your accountant to clarify this.
These three payments must be paid on 20th of the following month, once the quarter finishes.
Declaración de la renta
It is compulsory to present an end of year tax return if you are autónomo. This must be presented between 1st April and 30th June, after the tax year in question.
Please see our article here on the ANNUAL TAX RETURN
Accountant and tax advisor (asesores)
If you are considering becoming autónomo, we highly recommend employing the services of an accountant and tax advisor (all Spanish autónomos do this) due to the complexity of the tax system here.
Prices vary from 15 euros per month for a very basic service that doesn’t usually include book-keeping, up to 100 euros per month for a complete fiscal advisory team. You should speak to various asesores to establish which can provide the best service for your business. Please remember that cheaper is not usually in this case. You are responsible for any mistakes your asesor makes and they can be quite costly if tax returns and IVA are not presented correctly.
At LingoMar, we can offer assistance for autónomos
Get in touch via the contacts page HERE
Calculate your autónomo (social security) payments
*this article will be updated regularly as changes to the legislation occur and when new information comes to light. Be sure to check back to see new updates.