How much does it cost to become a freelancer in Spain in 2023?

Being your own boss, doing what you’re passionate about, and setting your own hours in one of Europe's top destinations — what's not to love about self-employed life? But as they say, nothing in this world comes for free, so you might be asking yourself "how much does it cost to become a freelancer in Spain?" 

Before you switch up the status quo of your working life, you’ll need to know your initial investment. In this article, we’ll cover:

• The cost of registering with the Agencia Tributaria (the tax authorities)
• The cost of registering with Seguridad Social (social security)
• The cost of the cuota de autónomos — your on-going social security payments
• How much you’ll have to pay in IRPF (income tax) and IVA (value-added tax)
• Any extra initial investments that your niche might throw up

But first of all, here’s a little cheat sheet to make things easier 😉.

Now let’s dig a little deeper into the costs of becoming a freelancer in Spain, with the new freelance quotas for 2023 included in the calculation.

How much does it cost to register as a freelancer? Free with Xolo!

Although freelancing is a lifestyle in itself, if you want to work and live in Spain on a permanent basis, you need to keep everything above board. This means formalizing your employment to avoid fines and penalties 😶.

There are two necessary — and unavoidable — steps to register as a freelancer in Spain:

• Registering with the social security
• Registering with the tax authorities 

Without going through both of these processes, you aren’t officially self-employed in the eyes of Spanish law, which can lead to issues both with the government and with your clients. 

Registering with social security enables you to pay monthly contributions that give you access to public health care, unemployment benefits, and a pension. 

Registering with the tax authorities entitles you to issue invoices, deduct expenses from your freelance activity, and pay taxes. Yaaay!

So how much does it cost to register as a freelancer in Spain in 2023?

Some of you will be of the “if you want something done right, do it yourself” philosophy. That’s fine, you can register as a freelancer for free, but that ignores the amount of time and energy you spend on it. 

There’s a reason so many first-time freelancers in Spain turn to a gestoría, an accounting and management team, to take care of registration for them. Expat freelancers are often bewildered by the amount of red tape, confusion, and wasted time taken on registering as a freelancer — and that’s not even taking getting lost in translation into account. 

But while many gestorías charge their captive audience over €100 for the registration process, Xolo will register you for free!

Trust us, you’re not missing out if you never see Form 036 and we promise the government buildings aren’t that interesting. 

How much does the freelance quota — your social security contribution — cost in 2023? Between €230 and €500 per month

Once you’re officially registered as self-employed, you can enjoy all the good things that come with freelance life. Goodbye fixed schedules, smell ya later middle management. Now you can choose your own hours and work on the projects you want to do.

It’s not all plain sailing, though. Everybody’s first freelance quota, or social security contribution, comes as a shock. It’s nothing out of the ordinary. Your non-freelance buddies pay it before they receive their monthly paycheck, they just aren’t aware of it. 

Although until 2022 everyone paid around €294, 2023 began a new era of contributions based on actual income.

More or less, at least.

Put simply, it’s a predictive system. You tell social security how much you estimate to make, and pay the according contribution. You can change your estimation six times a year to keep it as accurate as possible, but there is no loophole here. At the end of the year, the tax authorities talk to their friends over at social security and balance the books by sending you a refund or a bill.

For a brief overview, the minimum contribution is €230 per month if you earn €670 or less, while the maximum hits €500 if you earn €6000. For an in-depth understanding, check out our article dedicated to the new freelance quota model from 2023 onwards.

How much does the flat-rate freelance quota cost? Between €0 and €80 per month

Yeah, well spotted. Paying out €230 when you’ve only earned €670 isn’t great news. 

But don’t despair. To encourage new freelancers like you to go their own way 🎤, you get a flat-rate freelance quota! But what do we mean by a flat-rate freelance quota? Here are some quick questions and answers.

Who can benefit from the flat-rate freelance quota in 2023?

To qualify for the flat-rate freelance quota, you’ve got to fulfill one of the following requirements:

• You’re registering as a freelancer for the first time
• You haven’t been a registered freelancer for the past two years, and you’ve never received a flat-rate freelance quota
• You have received the flat-rate freelance quota, but it’s been three years since you were last registered as a freelancer

How much is the flat rate and how long does it last?

The flat-rate freelance quota for self-employed workers in Spain is €80 per month and lasts for at least the first year of your activity.

You can extend your flat-rate quota for a second year if your income doesn’t exceed Spain’s minimum wage, which is currently €1080 per month.

What is the zero quota for freelancers in Spain?

Now we’re talking! The start of 2023 saw the introduction of the zero quota for freelancers. 

Reimbursed retrospectively, the zero quota is a 100% rebate for your social security contributions but is only available in certain autonomous communities in Spain. It serves the same purpose as the €80 flat-rate fee, but instead of paying €80, the zero quota predictably costs €0. Zilch. Nada. 

So which freelancers can access the zero quota? 

Put simply, as long as you qualify for the same requirements as the flat-rate quota, and you live in the autonomous communities of Madrid, Andalusia, or Murcia, you’re good! In the Balearic Islands, if you’re under the age of 35 or a female entrepreneur, you also qualify.

If you’re still not sure where to live and work as a freelancer in Spain, the zero quota could have a significant impact on your decision. Take a look at our article on the best places to be a freelancer in Spain, where you’ll find Mallorca, Madrid, and Seville, which all promote the zero quota.

Remember that your zero quota won’t last forever — just two years at the most. At some point, you’ll have to learn about budgeting and costs for freelancers in Spain. The sooner you get started, the better!

How much tax will you pay? It all depends on your line of work

How could we forget the wonderful world of taxes? Just like your salaried counterparts, as an expat freelancer in Spain, you’ll have to pay IRPF (income tax) and IVA (value-added tax, or VAT). 

The key difference between you and those working in a company is that you have to file quarterly tax returns to balance the books. If this isn’t #adulting, we don’t know what is 💸.

Here’s a quick crash course on the taxes for freelancers in Spain. 🤓

Spanish VAT — IVA

The amount of VAT payable by a freelancer is calculated by subtracting the input VAT (on expenses) from the output VAT (on income). Let’s break that down.

• You pay 21% VAT on almost all of your expenses.
• Your Spanish clients pay you 21% VAT for your services unless your work qualifies for reduced VAT. 
• Every quarter, you subtract the VAT on your expenses from the VAT your Spanish clients pay you and give the rest to the Agencia Tributaria. 

A quick tip: The VAT you receive from your clients is not your money! Be careful with your budgeting to avoid a nasty surprise. 

Spanish income tax — IRPF

As a typical expat freelancer in Spain, your Spanish clients will withhold 15% income tax on every invoice you issue and pay it to the Agencia Tributaria on your behalf. However, your international clients can’t do that, so you make up the difference through quarterly tax returns. 

That’s a very brief summary of a fairly complex world, but there’s no need to panic! When you create automated invoices through Xolo, our fancy algorithms calculate all your taxes and add them automatically. 

Remember, if you have questions about your invoicing, deductible expenses, or what to do if you’re not a typical expat freelancer, you can request a call with one of our local experts.

When you’re with Xolo, we offer advice free of charge because, you know, we’re nice like that 😇.

How much do you have to pay as an initial investment? That all depends on your work and ambition!

Until now, we’ve been looking generally at how much it costs to become a freelancer in Spain. But every freelancer is unique, so let’s take a look at some of the extra variables you might come across.

The first thing to bear in mind is that as a freelancer, nobody is going to simply give you an ergonomic keyboard, a welcome hamper, or a new camera for your travel blog. 

Therefore, you’re going to have to cough up for expenses like a coworking fee, a laptop, and any specialist equipment yourself. The good news is that as long as these expenses are directly related to your business, you can write off the VAT and lower your taxable amount for income tax. Woop! 

How much does it cost to move to Spain?

Sure, it’s not directly linked to your freelance work, but as an expat freelancer, you can’t ignore the costs of getting to Spain and starting your life there. The good news is the cost of living in Spain is relatively low compared to English-speaking and northern European countries. But don’t get ahead of yourself, there’s a lot you need to manage.

✈️ Flights

Flights vary hugely, depending on where you’re flying from. If you’re coming from Europe, you can usually pick up a bargain, but our North American and Australian friends will have to empty their piggy banks. 

🚇 Transport

Once you arrive, your best bet is to pick up a transport card. Both Madrid and Barcelona have 10-journey tickets for €11 to €13 so you can zoom around the city on buses and the metro system. 

🏠 Accommodation

When it comes to accommodation, there’s a wide range of prices, but you can live more than comfortably for €800 per month. But here’s a warning: That first month will usually cost you €3200, with two months of rent going to your deposit and another entire month going to those hard-working realtors. 

To go the cheap route, look for single rooms on pages like Idealista, where you can usually sidestep the moving-in costs. 

📱Phone, internet, and energy bills

Phone and internet packages in Spain are easy to find, and almost always come together. You can find a simple, but effective deal for around €30 per month which will give you 300mbps download speed and 10GB of data at the least.

In terms of energy, it’s always good to ask around for the best in your area. Clearly, energy prices have been unpredictable recently, to say the least, but if you’re paying much more than €40 per month, start asking questions.

👛 Accountancy and financial advice

Spain is famous for red tape, and gestorías exist to unravel that tape. Basically financial management companies, gestorías help freelancers like you to stay compliant and pay your taxes. 

Normally, gestorías aimed at expats charge the big bucks, safe in the knowledge that our demographic loves an English speaker 💗. But Xolo is different.  Created for freelancers, we’ll clear up your admin, you’ll have access to our accounting software and we’ll always be available for one-on-one advice when you need it. All of this for as little as €45 per month!

Xolo: Making sense of all the costs of becoming a freelancer in Spain

Moving to another country to work for yourself is an exciting ride, but it’s not easy! That’s why so many freelancers like you are turning to Xolo to dispel the myths and help you make sense of self-employed life in Spain.

Now you’ve got a full idea of how much it costs to become a freelancer in Spain, let’s get this show on the road. 

At Xolo, we’re a gestoría par excellence and take care of all the admin so you have more time to focus on what’s important to you. From one easy-to-use online platform, you can:

✔️ Create and send professional, compliant invoices at the click of a button

✔️ Forget about your quarterly tax returns — we’re on it

✔️ Build a network of freelancers like you on the Xolo Slack Community

Oh, and did we mention Xolo will register you as a freelancer for FREE?

So close all those tabs, you’ve finished your research. Head over to Xolo, sign up today, and we’ll be with you every step of the way.

About James

James McKenna has been a freelancer since 2017, working in subtitling, translation, and his main passion — writing. He loves nothing more than falling down a rabbit hole, a habit that has helped him specialize in areas as diverse as biotech, climate change, higher education, and business strategy.

Based in Barcelona, James learned the ropes the hard way, making mistakes that turned into valuable learning experiences. After working hard to establish himself, he is now working smart, and is always on the lookout for ways to streamline his business.