For members


Self-employed in Spain: What are the tax rules if you do two or more jobs?

When you sign up to be self-employed or autónomo in Spain you have to state what sector or industry you’ll be working in, depending on your career or business. But what happens when you cross over industries and want to work in more than one?

Self-employed in Spain: What are the tax rules if you do two or more jobs?
What are the tax implications for working in two activities at once? Photo: Brooke Cagle / Unsplash

It is increasingly common to carry out several self-employed activities at the same time to be able to make ends meet and adapt to the demands of the market. It could supplement your income and open up new opportunities.

When you sign up to be an autónomo (self-employed) you will need to be registered for IAE (Tax on Economic Activities) also called registration epígrafe. Essentially it’s a numerical code that identifies the activity you carry out.

READ ALSO – Do I have to register and pay tax if I earn below minimum wage?

Take for example an autónomo who works in marketing. They will have registered for one IAE, but if they want to supplement their marketing income and work as a tour guide or a language teacher at the same (also in a self-employed capacity), they will have to register for another IAE.

Your epígrafe or IAE will determine several factors:

  • If your activity is business or professional – If you are going to carry out a professional activity, you must apply withholding tax to your invoices within Spain. The general rate is 15 percent, but if you are a newly self-employed person, the rate is reduced to seven percent during the first year of registration and the following two.
  • The Value Added Tax (VAT) regime: The type of VAT you pay, whether it’s general, simplified or equivalent surcharge (mandatory for retailers).
  • Personal Income Tax (IRPF) – This can be an objective estimation or a direct estimation. 

If you want to sign up for more than one, you must inform both the Treasury and Social Security, since it can affect the way you pay your taxes as seen above.

To do this, you must make a declaration of census modification and fill out forms (modelos) 036 or 037. This means you will avoid having to present form 840 on the Tax on Economic Activities.

The good news though is that you can sign up for two different activities at the same time without having to pay two lots of social security fees.

READ ALSO: How self-employed workers in Spain should invoice clients abroad 

It’s important to remember that when it comes to accounting, you have to manage income and expenses separately for each of the two or more activities.  

When you present your income statements each trimester, you will have to fill in your income and expenses for each different activity. If the two activities belong to different sectors, you must also apply the VAT deduction regime separately for each sector.

It’s useful to keep in mind that as of January 2023, self-employed people have had to pay social security based on their net income, rather than a flat fee.  

READ ALSO: Will you pay more under Spain’s new social security rates for self-employed?

What to do about IVA or VAT?

The most important thing to remember is that method used to settle personal income tax and VAT must be the same for both activities. The simplified VAT regime is exclusively for taxpayers who declare personal income tax by modules.

Sometimes it may happen that you will have to charge VAT for one activity and not for the other. For example, selling bread in a bakery (with VAT) and giving cooking classes (without VAT). 

Taking this example, the VAT incurred in the acquisition of goods and services that are related to the cooking classes cannot be deducted.

However, the VAT paid on the acquisition of goods and services related to the activity in the bakery is fully deductible. 

The VAT paid for expenses common to both activities is partially deductible by applying the percentage related to the general pro rata.

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For members


The social security changes that affect part-time workers in Spain

On October 1st 2023, the Spanish government will implement new conditions which will affect the social security benefits and pensions of part-time employees in the country. 

The social security changes that affect part-time workers in Spain

Royal Decree 2/2023, set to come into force in a week, will affect the social security contributions of 2 million people in Spain who have trabajo a tiempo parcial (part-time work), the vast majority of whom are women.

From October 1st, a part-time workday will equate to the same amount as a full-time workday, in terms of the total number of days/months/years Spaniards have to work before being able to claim a pension or access certain welfare benefits such as temporary incapacity or care of a family member.

Currently, workers in Spain have to work 13,595 days to access a full pension when they retire at 65 years of age, 37 and a half years of trabajo cotizado (contributed work).

To get the minimum pension after 15 years of work, the minimum number of days worked is 5,745.

READ MORE: How many years do I have to work in Spain to get a pension?

Previously, part-time work would not count as a full day but rather a fraction based on the hours worked. 

Under the new legislation, one day of part-time work counts the same as one day of full-time work. 

According to the Spanish social security’s website, it doesn’t matter how many hours are worked on a part-time basis on any given day for it to count as one day of work. 

The change doesn’t necessarily mean that part-time workers will get the same pension as full-time employees (as this is also determined by gross salary), but it does influence how easily and quickly they can reach 100 percent of the regulatory contributory base to access a full pension.

READ ALSO: What you need to know about Spain’s new pension reform

The measure represents another step forward for Spain’s Socialist-led government in its attempts to close the pay and work rights gap between women and men, as women are far more likely to work part-time in Spain in order to be able to take care of their children. 

New leaves of absence schemes to care for family members were also recently introduced, new mothers can now get €100 a month to help with childcare costs, and Spain introduced the EU’s first paid menstrual leave

Up to 57 percent of new contracts signed in August 2023 in Spain were for part-time work.