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SELF-EMPLOYED

Everything that changes for self-employed workers in Spain in 2024

Spain's 3.3 million 'autónomos' will have to get their heads around several new changes next year including amendments to social security payments, VAT and income tax returns.

Published: 11 December 2023 13:51 CET
Updated: 27 December 2023 13:19 CET
Everything that changes for self-employed workers in Spain in 2024
Changes for self-employed in Spain in 2024. Photo: Christina Morillo / Pexels

Social Security payments

2023 was the first year that social security payments based on real earnings instead of a set amount for everyone were introduced. Next year, this will continue and amounts will be adjusted accordingly.

In 2024 the amounts will be reduced further for those on low incomes, while they will increase for those who earn more. Social security fees will be reduced between €3 and €10 per month for anyone earning €1,300 or more, while anyone earning over 1,700 per month will pay between 2.5 and 6 percent more.

READ ALSO – GUIDE: How to register with Spain’s social security system

For example, an autónomo who is just starting to be financially stable and earning €2,030 per month will pay €10 more per month in 2024.

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

Changes in reporting VAT

The self-employed associations and the Treasury are working to carry out the transposition of European Directive 2020/285, which came into force in 2020. This means eliminating the obligation to declare quarterly VAT statements for those self-employed workers who invoice less than €85,000 per year.

The EU requires this by January 2025, so the changes will begin to happen in 2024, however, it will not be fully in force until the following year.

This means that self-employed workers will not be required to issue VAT invoices and those who earn less than €85,000 will be able to choose between the current general VAT regime or take advantage of the new special franchise regime.

Zero social security payments for those in the Canary Islands, Extremadura and Galicia

In 2024, new self-employed workers in the Canary Islands, Extremadura and Galicia will join those in some of Spain’s other regions (such as Madrid) and benefit from not having to pay social security when they first sign up.

Canary Islands: In the Canary Islands, the zero quota will apply from January 1st, 2024. The region will subsidise 100 percent of the Social Security contributions for new self-employed workers during the first two years. They can also benefit from a further year if they earn less than the Minimum Interprofessional Wage (SMI). Self-employed workers can benefit if they have not been registered in the two previous years, do not have outstanding debts, are not carrying out two different professions and are not invoicing through a cooperative.

Extremadura: Extremadura will also reward its new self-employed workers with aid of €960 per year which should be used for social security contributions. To be eligible they must maintain their business in the region for two years, not be a director or administrator for a commercial company, and not work for partners of public limited companies or civil societies. They must also not be registered as employees at the same time or for six months afterward.

All those self-employed workers in Extremadura who registered in the system during the second quarter of 2022 can also qualify.

Galicia: All new self-employed workers in Galicia will also be able to enjoy the zero quota from 2024. 100 percent of the social security payments will be subsidised during the first year only. It is expected to benefit some 10,000 new self-employed workers in the region.

Income tax returns

Another new rule in 2024 will be that all self-employed workers will be required to file their Income Tax Return, known as the Declaración de la Renta next year, regardless of their income.

Currently, those self-employed workers who earn an annual net income equal to or greater than €1,000 have to submit the Income Tax Return, but from 2024 everyone will have to do this, even if they earn less or have experienced losses and didn’t earn any more that year.

Digital improvement funding

From next year, Spain’s Kit Digital will also be available for communities of property owners and civil societies. The kits are aid for small businesses and the self-employed in the form of vouchers to carry out operations such as website creation, marketing campaigns and social media.

From 2024, both communities of property owners and civil companies with a commercial purpose of between 0 and less than 50 employees can apply for the kit. To be eligible, they must comply with the general requirements of the Digital Kit Program, like the other businesses. The deadline for applications will be December 31st, 2024.

READ MORE: How small business in Spain can claim €12,000 for digital improvements 

The obligation to issue digital invoices has been delayed

Spain’s Create and Grow Law, approved in September 2022, establishes that it will be mandatory for self-employed workers and small businesses to only issue electronic invoices, but it’s being delayed, largely due to the early elections this year.

Self-employed workers and companies with an annual turnover of more than €8 million will have one year to adapt and change over to electronic invoices.

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WORKING IN SPAIN

What’s the law on having two jobs in Spain?

With the current cost of living crisis, working more than one job is becoming more and more common, but what are the rules on working multiple contracted jobs in Spain and the tax implications of this?

Published: 25 June 2024 13:24 CEST
Updated: 29 June 2024 08:10 CEST
What's the law on having two jobs in Spain?

Often it’s necessary to have more than one job at a time, particularly if they don’t pay well and you’re struggling to make ends meet.

In fact, historically that is part of the reason why establishments stay open so late and why siestas were so common – because people would have one job in the morning and then go home for a rest before starting their second.

This is still commonplace today and is in fact becoming more and more popular, with the rise in the cost of living, driving an increasing number of people to take up a second job.

Whatever your reasons for having two jobs or more – to save up more money or gain extra experience and work your way up, there are some financial implications you should be aware of.

What does the law say?

Currently in Spain, there is no restriction that prevents a person from having a second job, with two contracts in two different companies, for 80 hours a week.

According to data from the first quarter of this year from the Active Population Survey (EPA) prepared by the National Institute of Statistics (INE), the number of people with a second job in Spain stands at 591,300, although according to affiliation data of Social Security, some 800,000 people have more than one position.

This trend has been seen in each quarter of the EPA since 2022 and, right now, is close to a historic number.

Categories you should be aware of

There are two types of categories when you work in multiple jobs in Spain – these are pluriempleo and pluriactividad. Pluriempleo literally means multiple employment. This is understood as a person who works as an employee in two or more companies under the same Social Security regime.

In this way, it differs from pluriactividad or multiple activities, which is when people work for others and have their own business at the same time or their second job is under a different social security regime.

For example, if you work as a hotel receptionist in the morning and then in a restaurant at night, these positions are considered to be part of the same regime, but if you work in a hotel in the morning and then as a nurse in a hospital at night, these are two different careers and therefore social security regimes.

If you’re self-employed as well as having a contract job, this is a slightly different situation. To find out more, read our guide below. 

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

What are the tax and social security implications?

If you have two separate jobs, you are required by law to report your situation to Social Security, and to each of the companies you’re employed by.

When it comes to the Tax Agency, it’s important to note that you are obliged to submit your yearly Income Tax return (Renta), when you are paid by more than one employer and your income exceeds €22,000 per year.

READ ALSO – EXPLAINED: The key changes to Spain’s 2023/2024 annual tax return

In 2024, the maximum social security contribution base for employees has been set at €4,720.50 per month. This means, that regardless of whether your income from two positions exceeds this amount, the social security base will not be more than this.

The amount of IRPF (Personal Income Tax) must also be taken into account. If you are combining two contracts, it’s important to calculate the withholding tax.

This is because companies calculate personal income tax based on your annual compensation expectations. They do not take into account the existence of another job, so they apply the discount depending on what they are paying you only.

This means that they will keep less than what they should and when you’re filling out your Renta yearly income tax return, you will most likely have to pay the extra to make up the difference. 

In this case, you should request that both companies calculate personal income tax according to your earnings, so that you can get a good idea of the amount you have to pay working two positions.

You may also consider hiring a gestor or accountant to file your yearly tax return for you if you have a particularly complicated situation and work three or more jobs for example. 

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