Picture this, you work as an employee in Spain, but you want to earn some extra money on the side through one of your own ventures to help pay for the rising costs of living. Are you allowed to have a contract and be self-employed at the same time?
Let’s take the following scenario, you work for a company in Spain, but you want to make some extra money teaching English after work and at weekends.
Or perhaps you have a couple of clients, but then you get offered a full-time contract at a different company, can you legally keep working for your original clients as well?
The short answer is yes you can, however, it’s not a case of just deciding to do it, you must register as autónomo (self-employed) as well as being an employee with a contract.
According to article 28 of the Entrepreneur’s Law of 2013, a worker who is both self-employed and salaried must register and contribute to two different systems.
The first of these is the Special Scheme for Self-Employed Workers and the second is the General Social Security Scheme.
This means that your employer will pay your social security contributions for your contracted job and you must pay extra social security contributions for your self-employed work.
Essentially you will be paying social security twice.
In order to be legal, you’ll have to sign up to the Régimen Especial de Trabajadores Autónomos (RETA) stating the type of work you intend to carry out.
READ ALSO – Self-employed in Spain: What you should know about being ‘autónomo’
Remember that different types of work/careers are categorised differently in Spain and once you sign up to one, you are only allowed to do freelance jobs that fall within your chosen category. If you want to do more than one type of work on the side, you will need to sign up separately for a second category and it can get complicated.
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Social security fees
If you’re simply trying to make an extra bit of cash on the side to help pay your rent for example, you’ll need to think hard about whether it’s really worth doing this extra work and signing up as autónomo.
This is because of the high social security fees you’ll have to pay as a self-employed worker, on top of the income tax on your earnings.
Usually, for autónomos, this starts out at €80 per month for the first year (you may also be able to pay this for a second year if your earnings are minimal). After this it will increase in increments depending on how much your net monthly income is. It starts at €200 per month for those earning less than €670 and goes all the way up to €590 per month for those earning over €6,000.
Typically if you’re earning around €1,000 extra per month after expenses, then you will pay €260 in social security fees.
If you just want to earn a bit of extra money on the side and you’re earning below the minimum amount, you’ll likely have to pay €200 per month in social security fees, which is a lot just to make a bit of extra cash.
If you’re an English teacher and you charge €20 per hour for example, this means you’ll have to work 10 hours just to pay your social security fees before you even earn anything for yourself. To get another €200 for yourself, that’s 20 hours, which is quite a lot to do on top of your other job.
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Thankfully there are reductions to help you out
If you’re are also working as an employee, however, you can benefit from several deductions, which are not available to someone who works exclusively as self-employed.
There is a reduction of up to 50 percent on the minimum base for the first 18 months and a reduction of up to 75 percent for the next 18 months.
This means that if you’re doing something like selling your art on the side, you’ll need to be making good money to be able to afford the social security fees, not just some extra pocket money, depending on the deductions you’re eligible for.
You’ll need to work out for yourself whether you have time to do your self-employed job as well as your contract job, given the amount you’ll have to earn to make it profitable.
