Spanish Digital Nomad Visa and Autónomo Status: Social Security and Tax

Question

I got the Spanish Digital Nomad Visa last year but didn’t fully understand the Autonomo status. My lawyers also never mentioned the social security and simply said I would pay the same taxes as Spanish residents.

It’s low for the first year but I don’t think paying €300 per month on top of taxes makes sense for me given I have an entry-level salaried income. Has anyone else experienced a similar situation?

I still don’t see many blogs, websites mention this information clearly. I feel maybe my research before applying was incomplete but more I look into it, most websites seem deceptive about these additional costs.

Spanish Digital Nomad Visa and Autónomo Status: Social Security and Tax

Answers

These are the answers of Spainguru’s Facebook group members:

“From what I understand, you have been using the reduced rate for over a year now, and now you would have to start paying based on your actual earnings. Yes, it may seem a bit high, but in fact, it’s the price you pay to have public health services, maternity benefits, unemployment insurance, and so on.

Regarding taxes, it’s always important to apply all possible deductions to improve your outcome, and in the end, the tax rate may be much lower than you imagined. Good tax advisory can make a big difference in this! If you need assistance, you can count on us.”

“The social security tax situation was clear to me when I applied for the Spanish Digital Nomad Visa. Not everyone that gets the Spanish Digital Nomad Visa is autonomo. So maybe some DNV blogs gloss over autonomo requirements and benefits.

But when I search for information about being autonomo then there is plenty of information online explaining this. Spain’s social security tax seems reasonable to me, maybe even a bargain. An autonomo earning €30000/year pays about €348/month. In return, they receive public healthcare, maternity/paternity leave, and unemployment coverage.

Compare that to the United States where a self-employed person earning $30000/year pays about $382/month in self-employment tax (15.3%) and receives none of these benefits. (Both systems provide retirement and disability benefits.)”

“It is a lot, and the only reason I think it will make sense for me is that I have a spouse & 4 kids, and we will all receive public healthcare from it. I’m wondering though, what happens if permanent residency is received after 5 years?

Do we need to continue as autonomo to be able to stay in the country? If not, and the payments are just for 5 years, and the first year is discounted, maybe it’s still worth it?

Conclusion

The status of being an “autónomo” under the Spanish Digital Nomad Visa comes with its set of obligations, primarily related to social security payments which can appear steep but offer substantial benefits like public health services and unemployment insurance.

These costs are integral to the system and contribute towards substantial social benefits, which can be especially advantageous for families.

Understanding these costs upfront can help manage expectations and financial planning for potential and current visa holders.