Blog

In this article, we will cover 7 essential expenses for self-employed workers in Spain, along with tips for managing them effectively. By understanding and preparing for these expenses, you’ll be better prepared to manage your finances and achieve long-term success as a self-employed in Spain.

1. Social Security payments

The first of the essential expenses for self-employed workers in Spain is the Social Security fee.

The Social Security fee you will have to pay if you become self-employed in Spain for the first time is €80 per month for the first 12 months. That is the fee of the new Flat Rate in force as of January 1, 2023.

In 2023 the Spanish Social Security contribution system changed. If you don’t enjoy the Flat Rate, you must choose your contribution base according to the monthly net return tranche you will have.

We recommend this Guide on the new self-employment quotas in Spain. If you want to know how to change your contribution base, take a look at our video on the process of changing your contribution base.

2. Workers

Usually, to progress in your activity, you have to contract employees. This expense varies wildly, depending on the type of contract, the agreement to be applied, working hours and the number of workers you have hired. 

Get the idea that you will have to pay for your worker’s social insurance about 40% of what you will pay in normal conditions.

Example: If you will pay your worker € 1000, 40% is €400, so you finally pay € 1400 to have an employee. That’s why we consider it wiser to contract freelancer’s services.

3. Tax adviser expenses for self-employed

As a freelancer, you must be aware of the forms, tax filings, tax changes, and legal. The most comfortable is to contract a tax adviser. The average price in Spain is between 100 and 120 euros. 

At this point, we can help you since we charge you € 70 per month with our Basic plan. 

We prepare your taxes and domicile them in your bank account. That way, you don’t have to worry and waste time paying for the forms by going to the bank at the last moment. 

See what we include.

Essential tips for understanding expenses for self-employed 

And here you have a quick checklist of some tips for understanding self-employment expenses in Spain:

– Keep correct records of all business-related expenses, including receipts and invoices. And maintain your accounting books up to date.

– Understand the tax laws and regulations in Spain that apply to self-employed people.

– Familiarize yourself with the different tax forms and deadlines you’ll need to meet as a self-employed individual. We will keep you advised if you become a client.

– Know which business expenses are deductible on your tax return, such as office supplies, travel expenses, and professional development.

– Take advantage of tax incentives and deductions for self-employed, such as deductions for home office expenses or retirement contributions.

– Stay up-to-date with changes in tax laws and regulations that may impact your business expenses or tax liability. We will keep you informed of all applicable law changes if you contract our services.

4. The cost of electricity, water, gas, telephone or Internet

These expenses are inevitable if you have a place designated for developing your activity. Even if you work at home, the telephone and the Internet are usually necessary expenses. 

Within this point, we could include the maintenance of your office. That is the purchase of materials such as a chair to sit and work, a table, a computer, a printer, and so on. 

The lessor must pay the IBI, but in some contracts, it is specified that the tenant of the premises must pay it.

5. Your website

To get customers and manage and generate your business, it is crucial to have a web page where you can set your prices and the characteristics of your services. 

Obviously, all this has a variable cost, but it is necessary to assume. And, of course, not to mention the cost that your page implies according to the Data Protection Law. 

6. Insurance expenses for self-employed

Depending on the activity you develop, you have to contract insurance. And that should be an essential expense and not relegated to the background. 

We are talking about liability insurance, and also, private health insurance would be a better option in Spain.

7. Purchase of merchandise

You have to use an amount of your budget to replenish the product you sell. To do this, you should calculate the prices of your products to be competitive.

Remember that if you offer a quality product, your customers will recommend it with pleasure, even if it has a higher price than others offer for less quality.

Conclusion

In conclusion, self-employment in Spain can be a rewarding experience, but it’s crucial to be aware of the essential expenses that come with the territory. By keeping accurate records, understanding the tax laws, and planning for these expenses, you can ensure that your business is financially stable and profitable. 

Remember to review and adjust your financial plan regularly to stay on track and achieve your goals. With the right approach and a commitment to managing your finances effectively, you can enjoy the freedom and flexibility of being your own boss while achieving financial success as a self-employed individual in Spain.

Related articles

How To Earn More And Make Your Customers Happy (without lowering prices)

Electronic Services and Form 368 In Spain