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.
How and when do I pay the freelance quota?
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:
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.
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What are the minimum and maximum freelance quota amounts?
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:
Freelancers
€286.10
€1,233.20
€289
€1,245.45
Incorporated freelancers
€367.80
€1,233.20
€371.51
€1,245.45
The self-employed flat rate
This special tax and social-contribution rate is aimed at promoting self-employment and entrepreneurship. With the self-employed flat rate, prospective freelancers can save money thanks to a lower quota during the first year—and for up to two years after registering as self-employed. The monthly payment is reduced to €60 instead of the standard minimum monthly quota of €286.15.This widely used measure has changed quite a bit in recent years. While the self-employed flat rate has recently increased from €50 to €60, this rebate has also been expanded to benefit “incorporated freelancers” (self-employed workers who have set up a commercial partnership or a company). The self-employed flat rate can also be extended from one to two years for newly registered freelancers in communities of less than 5,000 inhabitants.Applying for the flat rate is relatively simple—just ask for this option at the Spanish Social Security office when registering as a freelancer. However, you'll need to meet the following requirements in order to qualify:
You must be registering as a freelancer for the first time, or not have worked as a freelancer in the two years prior to signing up. If you've received this rebate in the past, you’ll need to wait three years after the de-registration date before you can benefit from the flat rate again.
You can't be a freelancer assistant (family member of the business owner).
You can’t have any outstanding social security payments or tax debts to Hacienda.
The two- to three-year waiting period does not apply to freelancers who resume their freelance work following maternity leave.
Incorporated freelancer quota
As mentioned above, incorporated freelancers share certain features that distinguish them from conventional freelancers. While freelancers are self-employed and work independently, incorporated freelancers operate as companies—regardless of their legal status. In addition, incorporated freelancers must provide their company's deed of incorporation when registering. Incorporated freelancers must fulfill two criteria:
They totally or partially control the incorporated company, depending on whether or not it has shareholders
They work for the company itself
The minimum freelance quota contribution base for incorporated freelancers is higher than for other self-employed workers. They pay €1,214.10 per month (rather than €944.40), and the minimum contribution adds up to €387.87 per month, compared with €286.15 for conventional freelancers.
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SMEs (small and medium-sized enterprises) are often family-run businesses where the owner hires family members. For this kind of working relationship, the RETA created the concept of the “freelancer assistant” (autónomo colaborador)—a direct relative of the self-employed business owner who also works for them. To qualify for this status, you must:
Be an immediate family member of the freelancer (i.e. spouse or first-degree relative such as children, parents, and in-laws, or second-degree relatives such as grandparents, grandchildren, siblings, or brother- or sister-in-law).
Work in the business on a regular basis. You won’t qualify if you only help out occasionally.
Be at least 16 or older. Under Spanish law, anyone under 16 years of age cannot engage in any type of professional activity.
You cannot be registered as an employee anywhere else. If you're working for another company (whether full- or part-time), you won’t be eligible.
Live in the same dwelling as the freelancer. You have to share your home with the registered freelancer or be their dependent in order to qualify.
While this type of worker is not eligible for the freelance flat rate, certain tax breaks make it worth registering. For example, freelancer assistants benefit from a 50% rebate on the freelance quota during the first 18 months after registration, and a 25% rebate for the following six months.
Quota for freelancers with other employment activities
If you're wondering if it’s possible to register as a freelancer even if you're working for a company—it is! Because you're already making social security contributions through your other job, you can claim rebates—though these will vary depending on your working hours. To be eligible for reduced quotas, you must register for the first time with the Spanish Social Security's special regime for self-employed workers, and participate in other employment activities after you’ve registered.For instance, if you work full-time for a company, you'll get a 50% rebate on the minimum contribution base for the first 18 months, totaling €466.35. You'll then contribute 75% for the following 18 months, or €699.50. For part-time employees, the calculation is based on 75% of the minimum amount (€669.50) during the first 18 months following registration, and 85% (€792.70) for the 18 months after that. Because individuals who practice two professional activities at the same time are taxed on both incomes, a maximum social security threshold applies in the same fiscal year. This means that freelancers with other employment activities who pay more than €13,822.06 per year to Hacienda can reclaim any money exceeding that amount. Plus, N26 is a Social Security Collaborator entity, which means that you can pay tour quota through N26, and also receive any other type of payments from Social Security.
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FAQs
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