How much income does it make sense to be self-employed?

[jrineakter]

Being self-employed in Spain became a common option during the crisis years, after many companies closed or laid off the majority of their workers. If you couldn't work for someone else, there was always the option of generating work for yourself.

Weighing the pros and cons
In times of instability, the option of creating self-employment is always considered as an alternative to be taken into account, but before taking the step it is worth considering to what extent it is worth becoming self-employed. Ask yourself the question that begins this text: from what income does it make sense to be self-employed?

The answer is not entirely simple, so the decision should not be made in the heat of a dismissal or any other professional failure. Before taking that step, it is worth thinking a little about the significant tax burden that this group suffers in our country . Despite the many benefits and bonuses that are made available, the amount that must be paid is usually, depending on income, excessively restrictive.

When is it worth paying this fee? It depends: if you have definitely decided to undertake a professional project, the option of being self-employed is much simpler than that of forming a limited company. The process and the procedures are simpler and faster, two important aspects when starting a new regularised professional activity.

Do the math before you start
In this sense, to start a business as a self-employed person, you just need to register with the Tax Office and with the Special Regime for Self-Employed Workers (RETA for its denmark number data acronym in Spanish). From there, it's time to grab the calculator and do some calculations. Compare the monthly payment to the expected income, which must be realistic.

If you are registering as a self-employed worker for the first time, the flat rate is 50 euros per month. It does not matter what your age is, the fee is the same for everyone during the first year in the scheme we are talking about. Initially, a flat rate was approved for those under 30 years of age, but seeing the great response it had to the demands of older self-employed workers, the Government extended this rate to all ages.

According to data from the Ministry of Employment, since its implementation, more than 1,200,000 new self-employed workers have benefited from the flat rate, which has had a significant impact on the creation of self-employment. Based on these statistics and returning to the initial question: with this rate, from what income does it pay to be self-employed? The answer has nuances, because each person adjusts their standard of living to their needs and concerns, but in principle it pays off, at least, when income is higher than 800 euros, which is currently the Interprofessional Minimum Wage.

Beyond the economy
Then you have to weigh up the emotional benefits and disadvantages of being self-employed. On the positive side, there is the fact of not having a boss and, consequently, having a high level of creative and professional freedom. On the negative side, you have to take into account the instability that comes from not having a fixed salary , since there will be months when you receive a large income and others that are much more complicated.