It’s a situation that many will recognise… You already have a day job, but someone has asked you to do a one-off task for them. Signing up for the monthly autonomo’s quota of over 270€ seems a little steep, especially as the job in question might even pay less than this! As you’re currently paying your monthly seguridad social in any case, it seems odd that you should have to pay them twice. What options do you have if you want to emit a proper invoice (“factura”) without signing up as self-employed?
According to the way the Spanish tax system works, one thing are social security payments and another thing are tax payments. The two are very different systems with limited communication between them, and it’s technically possible to sign up to pay tax without signing up to pay social security contributions.
Is this legal? This is where Spanish law gets a little hazy. At the moment, there’s currently no proper set of norms regulating this kind of activity, although this is being debated for 2017. If you are already working full-time and paying your social security, and can prove that the work is a one-off job rather than a long-term contribution to your living standards, you have arguments for showing that what you are doing is “alegal” rather than “illegal”. In practice, many people do work odd jobs without signing up to pay the self-employed quota.
Many people cite the “limit” for the amount you can earn without being officially self-employed as 3000€, as above this limit there’s other taxes and forms you’d have to sort out in any case. If you’re earning more than the minimum wage (some 9000€ yearly) from your “odd job”, you might also have some explaining to do. There is some legal precedent of people being let off fines when earning below this level, but no guarantees.
Social security aside, not paying your taxes (VAT/income tax) is definitely illegal and can get you into serious trouble. To make sure you’ve got this covered, you will need to:
- Sign up in the Hacienda as an autonomo
- Declare VAT contributions from what you’ve earned at the end of the trimestre
- Declare IRPF (income tax) in the annual Declaración de la Renta
- Sign off as an autonomo in the Hacienda when you’ve finished (important to remember this!)
Hi Penelope,
I currently have a full time job but I’ve also been accepted for some freelance work by a translation agency. I’m assuming the company will take out the tax from what I earn, I think they said it will be 21%, so do I have to do anything else like register with any agencies or anything? And does the 3000€ limit apply to me for this second job? I just don’t want to be doing extra work for nothing!
Thanks!
First and foremost, congratulations on finding the translation job! Completely sympathise with not wanting to pay more tax than you’re actually earning
Translators need to pay 1-3 kinds of tax. The first one, which all translators need to pay, is IRPF (income tax). It’s correct that the company hiring you will normally “plan taxman” for this kind of tax, although rates have now lowered from 21% – at present, I believe they should be either 15% or 7% if you’re in your first year of business. You declare this tax when you fill in the annual Declaración de la Renta – which, by the way, you need to do even if you’re not self employed.
The second kind of tax translators may pay is IVA (VAT). Whether you pay this or not depends on the kind of translation you do. If you’re doing translation work of a literary kind (the sort that would potentially generate its own author’s copyright), you are exempt from VAT. If not, you need to charge 21% VAT. You play taxman for this and need to pay it in every quarter. In order to pay quarterly declarations, you’ll also need to be officially signed up as self employed.
The third kind of tax is the monthly Social Security “quotas”. This is a legal grey area. You’re already paying social security once in your full-time job, but even so technically you have the requirement to pay it again. However, as mentioned above there is some legal precedent for people being let off for picking up some extra cash from time to time.
Another option you might like to consider is signing up to a cooperative. If you’re working a regular second job but not earning much, this could be a good alternative.
As I’ve mentioned several times here, I’m not qualified to give legal or financial advice, so make sure you double-check this and use it as opinion rather than fact. I’d also try to get a bit more info from the company hiring you – you can’t be the first person to be in this position, and they also have legal responsibility to make sure everything’s covered. In any case, hope this helps and let us know how it goes!