Autonomo

Hi, my partner has recently applied for a position with a care agency in Alicante. She has been told it is an autonomo position, which I know means she will have to pay her own tax. However, as she is only likely to be earning around 1,000 euros a month, what will her outgoings be? I have heard you have to pay approx 270 euros a month to be autonomo and then pay a gestoria, so it makes me wonder if it is worthwhile? Would she then have to pay additional tax on her 1,000???

Thanks,

Amatista

Your partner will basically be paying a small fee to the Gestor / Asesor  to become set up as an Autonomo and then a monthly fee of about 260 Euros Per Month. On top of that they will need to pay a fee to the Gestor in order to submit the 4 Quarterly IVA returns, the yearly Wealth Tax and the yearly business tax submissions.

  On the plus side, if you can provide Facturas, you can claim back the IVA on Phonebills, Petrol, Car (New purchase or lease). Motorway tolls, and a number of other things.

The reality is that, all things considered, the take home pay will be closer to 700 Euros than 1000 Euros.

I thought so Tumbit thanks. Don´t make it easy do they??

Are they going to be paid cash?  If so, why bother paying paying the ridiculous autonomo taxes each month?  Everything seems to be cash in hand where we are in Spain.  You need to lose the British attitude of doing everything properly if you are going to survive in Spain in my opinion.

Thanks for that Sanchez. Believe me, after 16 years of being ripped off in Spain, I don´t feel a moral obligation to pay the ridiculous autonomo amounts either - if they want to pay third world wages, then how can they expect people to pay over €300 a month to be autonomo?? I work full time from home, and although we both want to ´do things by the book´ it is proving impossible. Employers won´t give contracts, and pay so little that to survive on 1,000 a month, then have to pay over €300 a month out of it, you are screwed!! Not sure if she will be paid in cash or not, we will have to see next week.

Amatista

I have to agree with Sanchez1

But it might depend if you are being paid by the agency or if you are being paid directly by the individual you are caring for etc.

Yes, the problem is you see, if she is to be paid directly from the agency (most likely) then as a bank transfer it will show as being a salary, I expect. Anyway, thanks for your comments - I agree with both of you - will just have to wait and see what is offered. Surely the Spanish authorities can see, however, that so many people are unemployed because of their ridiculous employment laws. It should be straightforward - if you work for a company, that company gives contracts and pays tax on your behalf. If you work for YOURSELF then of course, you would have to go autonomo. Simples??

Your 'Mistake' there is trying to find a logical solution to a problem....  Not the Spanish way, I beleive

CORRECTO!

I guess all this will depend on how much you need the money, there are plently of people who would work for less, if you are lucky enough not to need this kind of wage and can wait for something better than thats great! If not, well i guess you know the answer.

I agree that its not a lot and a real pain to pay that amount per month, unfortunately that is the system here and nothing that can be done about it for now.

Joan

Hi Joan,

Yes I understand what you are saying, but it just seems such a constant struggle to make an honest living here. The authorities don´t help themselves, which forces a lot of people to accept jobs which are cash in hand - and who does that help? No-one! Anyway, onwards and upwards and we will see how  it all works out.

Thanks for your comments. I don´t feel ´lucky´ by the way, just because I don´t feel €700 take home pay is enough for a full time job - it all depends on your outgoings I guess. We have always worked hard, and would like to see a fair wage for hard work.

Amatista

Another persuasive reason for not paying the 260 euros autonomo - just think where those taxes are going.  They are going to pay the salaries of the vast army of public sector wasters in Spain.  Most of them only work from 8 until 2/3, with a 1/2 hour breakfast break.  I'm sure as an autonomo you'd be working a lot more hours than that!!

Amatista, I agree about salaries in Spain.  They are shockingly low, and it is very difficult to get a permanent contract.  It's much easier and cheaper for an employer to give temp contracts and then get rid of you at the end of the contract.

Fortunately, I've got a decent job in Gibraltar that pays a decent salary. Personally, I'm not prepared to work for the salaries on offer in Andalucia.  Why would I when I could earn 2-3 times more in the UK?  Spain is just as expensive as the UK now, so you need a decent salary to live.

If Amatista registers as autonimo does that not also mean she is VAT registered and then must also account for VAT on all money/income received?

If that was the case would mean handing over another 18% each quarter?

I'm not overly familiar with these autonimo/salary arrangements so possibly someone else would comment and clarify.

That´s where I get confused Faro - would it be approx. €300 per month social security PLUS 18% tax every quarter??

Amatista

I dabble in legal & tax matter but I am no expert!!!!

But my understaing is that if you are deemed self employed then you must pay social security contributions and also pay VAT and income tax. Spain does not have a VAT registration limit as does UK.

Someone has said the social security contribution is EUR260 per month.

A self employed person must file model 130 and modelo 303 quarterly.

Modelo 303 is VAT

Modeol 103 is income tax

You would be required to pay 20% of net income quarterly as an on account tax payment but as your income is low this would be refunded after you file your final end of year tax return but it does impact on cashflow etc.

If that is the case as regards VAT then you could ask can you add VAT on top which usually gets the reply let's not worry about tax and we'll keep it all cash. This is why the cash economy thrives in Spain and more so since it's now 18%.

Hi - hope I can clarify the VAT issue.  I am an autonomo and when I receive commission on sales I have the income tax deducted by the company I work with as an associate and they then pay it to the government.  They also add on the VAT so I am given the VAT on the commission.  When my accountant does my quarterly calculations, I can claim all the VAT I have paid on fuel and other expenses, and then eiher owe the balance to the government or they owe me.  There is no minimum turnover so all autonomos are in the same position.

As far as I am aware, the tax calculation is only done once per year and it can take ages to get overpaid tax back!

I have followed this thread with interest and agree with the concerns expressed about having to pay so much when you are not earning much - or even making a loss.  However, for me this is outweighed by the fact that for my payment of 271€/month, I am accruing pension rights and I qualify for full healthcare - something I have used a lot since I came here!

ClaireT makes a very valid point, however, I pay into a private UK pension  AND pay for Private Mecial Insurance for myself, wife and daughter for less that the 270 Euros (plus Asesor fees) that it would cost me if I had continued to be registered as Autonomo in Spain.

Amatista - you need to clarify exactly what the deal is in terms of payment.

Certain payments made by companies are subject to witholding tax.

I will and thanks

Hi there,

As an autonomo myself I will give you an exact example of what I have to pay if I invoice 1000 euros.

Invoice 1000 euros

IRPF (Tax paid in advance by the company hiring your services directly to the Hacienda, 15% of the 1000 euros)- 150 euros. If you are in negative at the end of the year, that is you have more expenses than profit, you will be able to get it back next year. It is very stupid, because you always get 15% less out of your salary if you invoice a company or another autónomo. If you invoice an individual it does nor apply.

VAT-It is applied on the 850 euros you have left. So, the invoice to the "client" is 1003 euros.

At the end of the "financial year", as I said if you are in negative, you get the 150 euros back. I have never paid "income tax" up to now. I put all the invoices of the house, utilities, restaurants, gasoline, etc. as expenses, so I am always in negative.

Now, if you are under 35 you pay 174 euros autonomo fees (social security), every month, if not you pay around 250 euros. Add to this the accountant fees, in my case 100 euros plus VAT every month.

Also, before in the autonomo fees you only got insurance and retirement, now if you have 1 year of autónomo you also get unemployment in case you don´t have any income, or something like this, I don´t know the exact situation.

I don´t know what else to tell you. If you want, PM me, there is another interesting thing you can get when registering autónomo- a grant, the minimum of 3000 euros. It takes time to get it, but it eventually comes. 

I have seen posts about the cash in hand, but the people now are "smart". They will not give you a contract, but also want to justify the amount paid in their accountancy and have it as an expense towards tax, so they want autónomos.

Hope I could help.

All the best,

Valentina