Question
Is becoming an autonomo in Spain a mistake considering the costs of social security, or are the benefits and lower cost of living worth it in comparison to other countries like the Netherlands?
Answers
These are the answers of some Facebook group members:
”It does balance it out and it basically forces you to make a clever decision and not randomly become self-employed. I’m from The Netherlands myself and have been living here for 5 years. There’s nothing to be scared about.”
”It would have to be a well-considered decision in terms of the work you do and the supply of work you have, don’t forget the tax return every three months, but if you’re prepared to really commit to a budget and a lifestyle you can afford everything is possible”
”Of course, you need to make some money, but that’s why you earn more as self-employed, you need to cover all expenses. Just do it and see if it works. You can stop at any time. Don’t forget that during the first two years, you have a heavily reduced social security payment. Spain is a nice country. And you can always move back. Don’t hold yourself back because of fear.”
”It does depend on what you’re comparing to. So compared to the U.K. it’s bad and expensive. Add the fact you have to pay an accountant to manage your quarterly and end of the year but that usually means paying them a monthly retainer so is like an extra tax, the authorities don’t really like freelancers (is my perception) and audits are a possibility and it seems more common than anywhere else I’ve lived. Plus you can’t easily take benefits, like sick pay or unemployment, and your allowance for claiming business expenses is very low in my opinion.”
”There are lots of things to consider. Firstly will you have a consistent enough invoicing to pay the social security each month? Yes ultimately you will get a SIP card for your healthcare but most people still pay for private healthcare too. We have been autonomo here for 5 years, and I recently got a pension calculation for if I retired at 66, and the amount is very poor as I will only have had 16 years of contributions, you really need over 20 years to get a good pension. Finally, it does depend on where you live. We have lived in Alicante & Javea in the same province, both for over 2 years. It was much cheaper living in Alicante city than it is living in Javea.”
”What additional benefits would you get? I should have thought the social care system in the Netherlands would be better than Spain”
”Spain isn’t self-employed friendly. The state doesn’t like autonomos. They try to change things but they complicated them so hard that even their accountants can’t figure out. Yet a non-Spanish speaker. To round up, it’s financial suicide to be self-employed. Benefits not much. Public health care is hell. Now you can be self-employed in Netherlands with an EU VAT number and work/live in Spain”
”If you are willing to work hard in a well-paid industry, then being autonomo is fine. I think that if you earn less than 2000€\month it can be tricky”
”People will always complain about what they have to pay! When I was an employee my boss showed me what she was paying for my social security and I was shocked but it also explains why the wages are lower here. So employees might not technically be paying themselves but they still are. The healthcare here is so much better than in Ireland, I can’t speak for other countries. I’m pregnant but I’ve no stress or worries about public or private healthcare. I don’t earn a huge amount in the first place, but I still think it’s worth it”
”If you are making a Netherlands wage, living in Spain, yes it will be cheaper overall than living in the Netherlands when you take into account all costs of living. But many of us compare it to the UK – which is pretty brutal. However the UK is a broken system, so it’s not an ideal comparison really. It depends where you compare it to”
”Yes the taxes are high but the cost of living is less and the weather is amazing. I was self-employed in the UK where I was taxed less, however for me the other advantages balance it out. The Spanish health system is brilliant. Your first two years’ social security payments are reduced and then you pay according to your income. I suggest you pay a recommended gestor to set you up for the first year at least. I now do my own tax returns”
”I had a Ltd Company in the UK which cost me a lot more than being Autonomo as Accountancy fees were higher. My accountant here charges 36 euros a month for submitting quarterly returns and provision of bookeeping software. I add in my invoices and expenses and they do the rest. I pay a little more if I want specific business advice and for my year end calculations and submission. Cost of living is lower than UK and quality of life is better too. Do your maths, make sure you have enough savings “in case”, work out the pros and cons, learn a little Spanish, have an open mind, understand that work is work wherever you are in the world, recognize it’s not all sunshine and sangria and bills still need to get paid, understand that you have to work harder than a local to get stuff done due to the language and difference in culture, buckle up and get ready for the ride of your life and enjoy! Always invest in getting professional advice for your personal circumstances”
”The only thing I’d say is to check out living costs carefully. Rent and property is cheap in some areas, not at all in others, and while eating out and some food is slightly cheaper, utility bills are high, and most other things are similar prices to other European countries. Cars are expensive for example. But overall, if you make enough it’s really not as bad as people make out. You need to make sure your business is sustainable essentially”
”I agree, but it does depend on where you are from, I guess. I am from the Netherlands and although the monthly social security amount in Spain is quite high, you do get health care without any co-payments, pension and sick leave in return, which you all have to pay for privately in the Netherlands if you choose to do so (of course health insurance is mandatory). The cost of living is a little lower in Spain (of course it depends on the area) and so are some other taxes. For example: car tax is extremely low here compared to the Netherlands, in Spain, I pay less a year than I payed a month in the Netherlands, there is no dog tax which was pretty high for me in the Netherlands with 4 dogs, etc. In the Netherlands, I didn’t have insurance for sick leave or pension as a freelancer (too expensive for me) and all in all, I had about the same amount to spend after taxes and monthly expenses as I do here in Spain, even with the high social security payments I am currently paying as autónomo. So for me, it’s not more expensive and I get a little more in return, but it does depend very much on your personal circumstances”
”The answer depends on your particular case but broad parts to consider are the following: 1. Cost of living in the location, this is equivalent to boosting your income by 50% compared to the Netherlands.
2. Social security is actually not high by European standards. The problem is more that for low earners (less than €15,000 etc) the rates are very high as a share of income, as the minimum post-introductory rate is around €235 a month. But middle earners actually pay less than Germany, France, Italy etc. Holland is lower taxing but not by much.
3. Clients in Spain usually pay less than Dutch clients for the same work, due to more competition and lower costs etc. Basically, if your client base will remain the same (secure international clients). You will be in almost all scenarios better off with the cost of living unless your earnings are under €15,000. On the other hand, if your income would fall, moving location, would be a very important factor”
”It depends on you, your prices and your resilience. I’m Spanish and started my business from 0. The customers, mostly when I started, didn’t pay me too much. So at the beginning, It was a sea of tears. Now, 8 years later, I’m more or less balanced”
”You need to have an income stream from Central / North Europe in order to live well. Here in Vigo, I can’t complain about public health care. Many things are cheaper, especially rent and real estate in rather rural places. Rental costs in cities and energy prices have been going up recently. I am paying 110 euros per month only for electricity even though I am not heating. Groceries cost the same as in Germany or a little more. And, if you don’t live in a big city, you definitely need a car. In Germany, even if you live in a smaller town, there is good public transport and bike lanes. I am hoping that Spain will become more bike-friendly”
”We like to complain about the taxes, but we also like to live here for a reason. Putting aside all the stuff we don’t like, living here is still better than living in most other places. Nowhere is perfect; most places are much less perfect”
”When looking at the cost of housing, also bear in mind that most housing involves people stacked on top of each other. Many have internal courtyards, so you can keep an eye on your neighbours and they on you. No central heating or insulation (sound or heat), no electrical safety certificates or smoke detectors. Just looking at the price is a bit deceptive”
”I have the same exact concerns – and almost didn’t make the move (albeit I was coming from Costa Rica – so taxes were way cheaper – but the cost of living was out of control. (I lived on the beach)….and now that I’m here – the quality of life is superior and the cost of living is cheap as all get out. Rent/groceries/restaurants…I haven’t had to access any sort of health care – so no first-hand experience with that. But my rationalization overall – was to just give it a year and see how it pans out. I can always leave if it’s too much. So far – I’m saving money – and enjoying all the amenities and culture and FOOD this place has to offer”
”I think most people complaining about the costs, are from a country with a weak or no social system, hence the low payments for social security. In most EU countries, you would pay much more social security than here. The other half of complaint is from people who charge for their work too low rates. They believe that is the way to stay competitive, so they charge same as an employee would get and forget to add the 30% for social security and 10% to cover the business costs, like office, computer, software, etc. That’s why they live under the wage minimum, which is of course frustrating if you work so much. If you manage to charge proper rates, you will be fine. I’m from Germany and would pay much more SS there. So, this and good rates and the sun and cheap life make Spain for me the best country to live”
”If you’d compare Barcelona to Amsterdam there’s not a lot of difference. I think Amsterdam would actually be way more expensive. Of course, it’s all about location. I’m not going to compare Barcelona to the countryside of the Netherlands or Amsterdam to the countryside of Spain”
”I have been both autónomo in the Netherlands and in Spain. I definitely paid less taxes in the Netherlands, but social security is not so easy to compare. Also because the system in Spain is changing and we don’t know yet where we are heading (apart from the next 3 years or so). The same counts for the costs of living, which depends quite a bit on your situation. My costs of living are definitely lower than in the Netherlands. But hey, I was living in Amsterdam and am living in the countryside in Asturias now (way cheaper than the Costas, Madrid or Barcelona). It also depends on where you earn your money. My clients are Dutch while I live and work in Spain, best of both worlds IMHO”
In conclusion, according to Spainguru Facebook group members, the decision to become an autonomo in Spain depends on various factors and individual circumstances. While some people view the costs of social security as a drawback, others believe that the benefits and lower cost of living in Spain make it worthwhile. The opinions vary, with some emphasizing the advantages of living in Spain, such as the pleasant weather and a good public healthcare system, while others highlight the complexities of the Spanish tax system and the potential limitations of being self-employed. It’s important to consider factors like income stability, client base, location, and personal preferences when evaluating the feasibility of becoming an autonomo in Spain. Seeking professional advice and carefully assessing one’s financial situation can help make an informed decision.
