Freelancer quota guide
N26 brings you a practical guide to understanding the freelance quota in Spain.
7 min read
The freelance quota in Spain is the tax self-employed workers pay to the public tax authority (Hacienda) on their freelance income. This tax is paid monthly and represents the freelancer’s social security contributions from the moment they're registered with the RETA, or the “Regime for Self-Employed Workers.” The freelance quota is used to cover expenses like healthcare, temporary disability, maternity leave, work-related accidents or loss of employment, and will help determine the size of your retirement pension. Luckily, there are certain tools available—like the self-employed flat rate—to ease the financial pressure when you sign up.The freelance quota is calculated by multiplying your contribution base—or gross income—by your social security contribution rate. If you fall behind on your contributions, you'll need to pay a 10% surcharge on the original quota. That's why it's crucial to know which deductions can be applied, how much tax you need to pay, how to calculate the amount of your freelance quota, and which account it should be paid into. Payments are always due on the last day of each month. If you register or unenroll mid-month, you'll only have to pay for the days you've been registered. You can make your contributions in one of the following ways:If you register as self-employed, you'll be able to choose the contribution bases (minimum or maximum) that you want to pay each month. Naturally, this will impact the conditions of your retirement, sick leave, and termination allowance. As of January 1, 2021, the contribution rates increased by 0.1% for a “termination of activity,” rising from 0.8% to 0.9%—and by 0.2% for occupational contingencies, going up from 1.1% to 1.3%. These increases represent a 0.3% rise in the freelance quota. However, the global pandemic has prompted the government to negotiate a freeze on increases with self-employed workers' associations until June 1, 2021. The resulting minimum and maximum rates are shown in the graph below:
How and when do I pay the freelance quota?
- Register with any financial institution recognized as a Social Security Collection Office by submitting a contribution settlement form (RLC: Recibo de liquidación de cotizaciones)—available at the provincial offices of the Social Security General Treasury (TGSS).
- Complete a direct debit form—available from your bank (only if your bank is a collaborating entity with Social Security, as is the case of N26), the offices of the TGSS, or the Spanish Social Security website.
- Pay electronically via the Spanish Social Security website.