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How much I pay in TAXES in Spain | Self-employed versus Employee
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- เผยแพร่เมื่อ 18 ส.ค. 2024
- Hi guys, in this video I explain how much I pay in tax in Spain. I live in Andalucia in the Malaga area.
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I am self-employed / freelance which means I have to pay:
- Social Security
- VAT (value-added tax)
- Income tax
In Spain the self-employed status is called "autonomo".
I also calculate how much I would pay in taxes if I were an employee with a similar income.
What do you think of the Spanish tax system?
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This was very easy to follow and exactly what I've been hoping someone would talk about. I've been researching the cost of living in Spain and when I looked into taxes I thought they were pretty steep. The funny thing is there are a ton of youtubers posting videos on how low the cost of living is in cities like Malaga and Valencia, but they don't say a word about taxes. Hmmmm....is it because the low cost of living makes up for the high taxes or what's going on?Appreciate your insight - thanks.
For me the low cost of living makes it worth it. But I'd say that for someone making very little money being self-employed I wouldn't recommend....
Whoa, why does Spain hate the self-employed? Was considering moving there, but not anymore...I ain't rich.
Exactly! Most people I explain it to are also in shock.
This is the best video I’ve seen so far….
I am currently a freelancer and this video just broke down everything to my understanding. I consulted with a couple of tax consultants but didn’t get any beneficial information….. THANK YOU SOOOOO MUCH FOR THIS VIDEO.
I currently earn same amount as you and it looks like I’d be giving the Spanish government all my income 😢
Hi Gabriel, I'm glad you found it useful. I recently made a video with an overview of the Spanish tax system, perhaps you'd want to watch that as well: th-cam.com/video/31K35CLHyEM/w-d-xo.html
Greetings from Spain 🇪🇸
Wow. Those taxes are crazy high....
Agreed.
I love your Danish straightforwardness :)
Haha thank you - it's difficult to turn it off 🤣
You can also get a VAT refund which can offset the 21% paid.
True! But the VAT system can be quite complex to navigate if you need to pay equivalance charge VAT, dealing with amounts that aren't deductable (at first) and/or having problems actually getting the VAT back.
But for simplicity, yes :)
Without a doubt its complex, as you said its good to have an accountant and also it depends on the kind of work you do.@@FriiInfo
the taxes are craaazy 😵💫 thank you for this video!!
Glad you liked it! :)
In Serbia currently fighting with Gov. they never controlled us freelancers and in 2020 (crysis) they hit on us and requesting to pay taxes, pension( we can't have a pension if pay it) and helth insurance(we was never able to use it) for last 5 years, and it went fro 46 up to 80% from total income for all 5 years, which is inasane.
Oh that sounds rough 😑
Wow. My family is from there
@@BasicBeachCommunity1 Serbia?
@@milenkojovic419yes Serbia and croatia
You mean taxes for freelancers in Serbia is 80%? 😲
Great video! 👏🏻 Thanks
😀
Thanks for this video! Yes it’s brutal, Spain could do so much better.. just returned from Madrid
Brutal is a nice word 😄
What if you earn your self employed income from a another country working remotely while living in Spain. What’s the tax rate in that case if anything?
It's always a good idea to consult with a tax professional regarding your specific case, but in general you have to pay tax on all income (also foreign) if you are considered a tax resident in Spain (if you're here more than 183 days).
you're essentially rich in Spain 😂 I've been grinding over in Catalunya for a year now and am not looking forward to paying the 283EUR or whatever it is! It's a struggle, I know many people including the spanish work cash in hand just to make ends meet. I mainly work painting and decorating, with some other DIY and gardening, it's just finding a steady stream of clients that's the challenge, as expected. Informative video, thanks!
You are spot on. I totally understand why most people do cash in hand with the system being like this. But perhaps the system is also like this because there is so much cash in hand - the government needs a gauranteed way to collect the money.
If you find some foreign clients (with money) I'm sure you can make a decent living! The contractor I have used a lot is great and most of his clients are Scandinavians.
Spanish guy here! Yep, you just discovered the shitty system we have here in Spain, were being an entrepeneur is not rewarded, if not punished, forcing a large part of the population to live in an underground economy.
Thx you for this information
Good to hear that it's useful
It's ridiculous here how much they charge!!
for 70 euros a month you can get an amazing private insurance
In which country? 😁
Yeah! I moved to Spain just over a year ago and my biggest complaint are the taxes, they are insanely high considering that the different tiers are actually quite low (the highest tier is quite easy to reach and you pay 45% for every euro over 5k/month, which is brutal).
Just staying here one more year and then I'm moving to a country with a territorial tax system where I can potentially pay 0% and byeeeee Spain.
5k/ month is a lot of money in Spain though - very few people earn that much 😰 But yea - I have also considered moving somewhere else in the long run for tax reasons.
Did you think of any certain countries though, where 0% tax would be real?.. They say that Cuprus is one of them in the EU. I'm thinking to go there one day, and see.
why i cant find a video of actually how to pay the taxes for self employed or content creators... like where do you go how do you apply what do you have to do where do you go
Most people use an accountant or "gestor" who does this for them. If you don't have a working understanding of the Spanish tax system it's pretty difficult to do it yourself. I am glad I have one.
@@FriiInfo is accountant expensive?
@@hiitsevanator151 depends on your type of activity. 50€+ per month. I pay 130€ per month currently.
Quick question here, I have been consistently hearing that there few jobs in Spain but how are all this football fans able to afford game tickets every week??
Social security 🥳 nah, in all seriousness I have no idea. The level of disposable income here highly depends on one's housing situation. Those living in family-owned real estate (that's paid off) can have an okay disposable income with a median salary. Those who are forced to rent, on the other hand, most likely struggle more (at least / especially in the more popular cities & areas).
If you like taxes! Come to Sweden!
Even more higher than spain!
If you are self employed you Pay 50%+ in taxes!
And Do not expect a wellfare system. You can be waiting for over a year to see a speciality Doctor.
But If you are an asylum seeker, you Will get everything for free! Like an apartment, free healthcare, dentalcare etc. But We Swedes has to pay very high prices for dental care and so on!
This is Why many Swedes leave Sweden, for ex Spain.
Yup, I am from Denmark.. Scandinavia equals high taxes for sure.
That's awful! I hope Swedish people will rebel against it otherwise Sweden won't be Sweden anymore if most people leave. It won't be just a matter of losing population but even worse a matter of damaging your economy by keeping unemployable people living out of welfare.
Move to Marbella. Don't be stuck on little tax info you gathered or experienced in the state you live in. Each state is different. Also, being a employee and or self employed or both: That still can get taxed high depending on the state. Find new money making skills like becoming a trader or investor. Those are usually the least taxed depending on the country or state.
I seriously doubt that the tax is much different in Marbella compared to Torremolinos.
@@FriiInfo It is exactly the same hahahah Spain is not USA, you are right don't worry
Thank you for this very clear video! I have a question regarding your VAT calculation. I understand you should pay it on your e-commerce revenue, which was about €900 per month. I see that you calculated 21% of the VAT on your overall revenue (or income as you call it). Can you explain why? Your primary job also required VAT? Thanks, upfront!
Hi there, you are right - I realize that this part does actually require more of an explanation than what I have in the video. The VAT only applies to my e-commerce activities, but there is a calculation in between that I don't show. So the e-commerce "income" I show in the video is the revenue minus direct expenses, so my income before VAT but after deducting the products I buy (I do reselling). I really hope that this makes sense, otherwise, let me know! :)
Thank you for pointing it out! :)
@@FriiInfo I appreciate your reply. I am still navigating through those taxes. I am astonished how high they are. If you still want to do videos on the topic, it would be interesting something such" how much revenue should I have on a monthly basis to get to for example 1500€//2000€ net income. I found in Google different calculations on the topic which makes me more confused.
@@silviazac7492 That's a good idea :) The thing that makes the difference in the end is often the social security aspect - if you're employed the employer pays this for you, but if you are freelance you have to pay this yourself. That makes a big difference.
@@FriiInfo Indeed. I was surprised to see there is no tax free minimum income. In Germany revenue up to 9k€ per year has no income taxes and the starting point is lower, 14% while in Spain it starts already at 19% so income taxes are higher in Spain. However Germany has other tax burdens, higher than in Spain for freelancers. As a freelancer I think there is no way to escape the tax burden in western European countries🤷
@@silviazac7492Andorra?
I can understand why you have to pay 21% VAT on your ecom income. But why do you also deduct VAT from your primary job? If you dont have your ecom income, would you still have to deduct VAT from the primary job salary?
great video, i wonna ask why did you choose to pay tax for your e-commerce in Spain, i do undestand tha you are living in Spain, but you could consider be tax resident in another country?
Hi there - Yes, this is something that I consider from time to time. I don't mind paying my part in taxes, but of course it would be nice to pay a bit less. However, for me Spain is still more tax-friendly than my own country (Denmark).
I'd be curious to know--from the people who are aghast at this level of taxation--whether they know the relative costs of health care in Spain and the United States, for example.
The US has a very expensive healthcare system that is managed differently, I'd argue it's a bit like comparing apples and oranges, or what do you think? But of course, it's nice that healthcare is "free" in Spain as long as you don't mind waiting a very long time for appointments. It would just be nice if taxation and social security depended on one's income instead of these high flat rates. ☺
@@FriiInfo well, the government is working on that and I think next years “cuota de autónomo “ is going to be way more flexible for everyone thus if you make more money youll pay more but if you make less you’ll obviously pay less. I’d rather have this system along with the “long waits” than living in a brutal country like the USA where healthcare is a business and not a human right
@@Dangermaniac206 Not at all, see the proposals they are making... a person that earns from 0 to 650 euros, will be paying 250 MONTHLY, as an spanish citizen, being honest, i do not recommend you to come here to entrepeneur, Spanish government is full of thiefts..
While you make a good point, your comparison of spanish tax (amount) against health care (cost) in the US is incorrect. You should compare the spanish Social Security against US health care payments - and Spain wins hands down. Spanish taxes are a totally different thing and does not affect the quality of the health care you'll get. You can improve on the quality by letting Social Security cover the basics and getting an additional insurance for whatever extras (like dental, for example).
thx
You are very welcome :)
Hey fantastic video! What accountant are you using I am also looking to get one around Málaga? Also what is a normal rate? I found a site for €70 a month but wanted to compare
Glad to hear it is useful. I have been using a company called Voila Asesores:
www.voilaasesores.es/
I would say it's one of those areas where paying for a qualified service can save you money and headaches in the long run.
Does the social security pay for health care? And if yes, and if you have a family, will they all get health care as well for that 288 euros? Thanks!!
Social security includes health care correct. Exactly who is covered I am not sure, but I'd assume it extends to your immediate family provided that you live together.
@@FriiInfo Thanks. That sounds like it should be accurate. When the time comes, I can look it up for the most current info from the government.
Hi Thank you very much for this video, can you please explain about the tax which is for having TH-cam channel in Spain?🙏
Hi there! What an interesting and relevant question here :) So first of all you need to register as autonomo and then there is a flat social security amount that you have to pay every month (this will depend of your yearly income, whether or not you do it full time, if you qualify for a discount). Probably in the range of 60-300 euros per month. Then on top you have to pay income tax.
Since taxes are an individual matter it is a bit difficult to answer, but I home this can give you some sort of an idea.
Best regards
Nina
Get a LLC...
Thank you for sharing this information in such a clear and unintimidating way! I live in Spain and I buy a lot of services and equipment for my business from overseas companies. Can I use these invoices to offset some of my tax bills? What is the best way to do that? I am used to getting a factura oficial for expenses paid for in Spain but what about from foreign countries (UK and USA in particular) ? Any help greatly appreciated
Hi there, if those are direct business expenses then yes they are deductable. It will depend on which "activity" you are registered for in Spain and whether you operate as "autonomo" (freelance / self-employed) or whether you create a company (with a company you can deduct more things). But I am not an accountant so it is better to consult with one. I have an accountant that takes care of everything for me and I would have no idea what to do without him. They are pretty strict in Spain though with what you can and cannot consider business expenses.
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I pay much less in brazil
That's the thing, most countries do.
@@FriiInfo I have spanish nationality, but cant afford to live there
48% taxes for autonomo
38% taxes for an employee
Porque?😢
Hi! What are you referring to here? :)
@@FriiInfo no referencing, I'm just shocked with these tax rates from your video.
So I'm dramatically asking "why" in Spanish.
Read it with a crying voice and a long "e" vowel, like "Porqueeeeee??!!!". As characters often do in soap dramas, with eyes rolling and fake fainting 😁😅
@@FriiInfo jokes aside, I mean it's really rough. How Spaniards are supposed to provide to a family or buy a house?
@@kirill4531 good question. It is not easy to save up money living on a median Spanish income. Some people are fortunate enough to live in family-owned real estate (passed down through generations). The high tax burden means that it's not the worst country to be poor in given the support from the social security system. Unless you're autonomo, then there's not much help to get.
@@FriiInfo having said that maybe it makes more sense to open a company (l.l.c.) and make more tax reductions based on costs? This way you can add your rent partially, business lunches, traveling, laptop, internet bills, maybe some software subscriptions
What if you don't work? (Have looooot of inheritance or retired) 🤔
Spain has a wealth tax so that depends on how much money you have :) If you receive pension payments they will be taxed in Spain.
@@FriiInfo very interesting, thank you 🙂
Do you pay VAT on money earned outside of Spain? Just trying to calculate stoppages, would I just go off the table and exclude your VAT calc as all my clients are outside the EU.
Hi there - so I think in most cases you wouldn't charge VAT if you send an invoice to someone outside of the EU. But you can check this website for guidance:
europa.eu/youreurope/business/taxation/vat/cross-border-vat/index_en.htm#outsidetheeusellgoods-1
hey, i will start working as an expat in madrid with around 40k euros gross yearly, I have found this amount to be a good amount for a starter(1year experience after university). what would you say?
I don't know your field but that sounds not too bad at all 😊
Be careful, if the amount is gross, you will end up earning around 20k per year in net... Consider the costs of living etc.. to see if it is worth it
Hi, thank you for your video. Question, on your e-commerce income can you do expenses before paying tax? As example, on your business income 1000€ you could spend on business lunches, paying for rent as business (home office) and office equipment and other related stuff like flights hotel stays and so on, rather than just paying tax?
As I am only self-employed (autonomo is it called here) there are very few things I can deduct. I cannot deduct flights, hotels, business lunches, home office etc... They are very strict in Spain with this. If you create a company you can deduct more things.
@@FriiInfo but there should be a reason why you do so or money is not most important thing in your current life stage?
@@makki4064 sorry what do you mean?
@@FriiInfo if you would choose to split your incomes into two countries and pay taxes on ecommerce in your native country would you pay higher then? thank you
@@makki4064 I am a tax resident in Spain so I can't do that without being double taxed. Plus my home country Denmark has a similar tax burden, possibly somewhat higher even, although the benefits are better. I hope that answers your question 😊
Hi! Thank you for your video. I have a question - can you have a work visa if you come over and register as an autonomo?
Hi there - glad you enjoyed it ☺️ I am pretty sure you cannot simply register as autonomo and then become eligible for a work permit. In that case I think Spain would have a lot more inhabitants all of a sudden 😉
You might want to look up the recently passed Digital Nomad visa for Spain.
I don´t want to know how many people don´t start their own businesses and let they grow and hire some employees later, because they have to pay in the company growing time so many taxes/social securities from the first day. Stupid idea from the government.
Agreed. In Spain one can end up paying high taxes on a low income as autonomo - not super encouraging to get started in the first place.
No wonder la liga players are always trying to avoid taxes.
LOL 😄
How can I be accountant in Spain
I know a bunch of foreign accountants here so that should be possible for sure!
Is €4000 before tax a good salary for a couple with two kids (6 snd 2 years) in Madrid?
If the company pays your social security it's an OK salary! You won't be able to live in luxury but for a "normal" life it's fine I'd say :)
@@FriiInfo thank you so much for your response. Btw, all your videos are awesome and very informative. Keep up the good work!
@@subhadas19811 Thank you so much, I'm glad you enjoy my videos!
What happen if you dont pay taxes ???
I think the Spanish authorities will come after you at some point ;) But depending on your situation, you may not be tax liable in Spain, it is better to check that with a professional :)
It is likely nothing will happen. My parents where living in spain for 10+ years and never paid taxes. Now it is probably even easier if you work remotely.
Ouch, those taxes sting hard.
yup!
Hello friend
Are salaries so low in Spain?
The median salary for employees is around 1700€ according to most websites - it is worth noting that as an employee the social security is paid by the employer, whereas in my case as a freelancer / selfemployed worker I have to pay this myself.
Damnnn that’s too much taxes. Might as well give them your entire income.
Yup it's pretty brutal. They currently owe me some money - will I ever get it? Good question.
@@FriiInfo hopefully you ll get some of the money back. Won’t be surprised if they take it too.
@@chimebath85 I'm hoping for the best but expecting nothing 🙏
Men VAT bliver jo taget ud af din omsætning, ikke din fortjeneste? Disse er jo vidt forskellige tal i de fleste tilfælde. Jeg kan desuden anbefale at sælge i USA for at undgå VAT :D
Men hvis jeg holdt de samme priser og ikke skulle betale moms ville mere gå direkte i lommen ☺️
@@FriiInfo Ja, det ville du kunne opnå ved at sælge i USA
@@maltefrom True, men tror lige jeg bliver i Europa ;)
@@FriiInfo Det er op til dig. Jeg bor i London men sælger i USA vha. af et 3pl firma. Jeg sælger også i UK men stopper snart med dette pga. VAT. Men hvis tallene fungerer for dig er det jo fint
horrible
The taxes? :)
@@FriiInfo the system overall 😁
That's stealing 💀😬
It sure feels that way!
I have offer to live in Malaga with one of employer for 50k euros. can you help me what will be the tax on that & how much can I save per month?
I'll be moving with my wife. Also she will be searching for job in Malaga.
I would say that's a good salary for Malaga! You can check this page to know your net salary:
cincodias.elpais.com/herramientas/calculadora-sueldo-neto/
Maybe use Google Translate if you want it in English.
Hope that helps! :)
Wow, you are basically self employed to be poor. Wondering how you could pay rent ,food, transportation after all taxes , let alone to save for your future.
Yup, the tax burden is quite high....
that is crazy..too much tax ..leave
Haha! Yes, maybe some day :)
@@FriiInfo You often see these vids" expats going and buying bars and biz in Spain...They inevitably become working poor. The country is in a poverty trap and thats why it all looks very cheap and inviting..These expats pay high taxes , work like mad and inevitably go bust in a 3 year period or at least never make serious money. Meanwhile the Spanish govt collects all the taxes from them...In your case its maybe different coz you dont have expensive infrastructure to support
damn, ur left with nothing
Spain = not tax friendly 🙃
Thx for this information
No problem :)