I don’t know if you’ve heard yet, but we’re living in strange times. And with uncertainty over job security and the rising cost of living, many people are asking themselves if they can get the freedom of freelance life with the security of a salaried job. This is called pluriactivity in Spain, and a diverse range of people chooses this pathway to maximize their income or explore new opportunities without taking a leap of faith.
But if you’re going to have one foot in employment and the other in self-employment, you’re going to need to know the rules. And wouldn’t you know it? Xolo has the solution!
In this comprehensive guide, we'll walk you through the ins and outs of simultaneously working as an employee and self-employed in Spain, then give you a step-by-step guide to how to register and stay compliant. So close that YouTube tab, sit up straight, and pay attention.
Can you be employed and self-employed at the same time in Spain?
Let’s start with the basics: Yes, you can be employed and self-employed simultaneously in Spain. But there are a few regulations and requirements that might pose a problem.
For starters, you'll need to make sure that your employment contract doesn't have any clauses that prohibit you from taking on additional freelance work. If it does, you'll need to discuss this with your employer and possibly renegotiate your contract.
Next, you'll have to pay special attention to your tax obligations. If you work for someone else, your employer will handle your income tax and social security contributions. But as a freelancer, you'll be responsible for managing these payments yourself. It's essential to keep accurate records and ensure you're paying the right amount of taxes to avoid any legal issues or huge payments down the line.
Finally, you'll want to make sure you're not biting off more than you can chew. Juggling both roles can be rewarding, but it can also be pretty demanding. Make sure you're striking the right balance between your full-time job and your freelance gig to avoid burning out.
In the following sections, we'll answer some key questions about working in a company and for yourself, offer examples of what pluriactivity in Spain is, and give you a step-by-step guide to launch your own side hustle.
What is pluriactivity in Spain? A closer look
Alright, so you might have come across the term pluriactivity, or as our Spanish amigos say, pluriactividad, in one of your freelancing rabbit holes. We know it’s often difficult to get a clear-cut explanation of these terms on other sites, so we’ll do our best to break it down for you.
In a nutshell, pluriactivity is a legal term for people who work simultaneously in two or more different jobs or roles. In the context of this article, it means being employed by a company while also running your freelancing gig.
Pluriactivity in Spain is pretty common, as it allows you to diversify your income sources and explore new opportunities that you’re passionate about. It has recently come under the microscope even more, with so many people sensing job insecurity at the same time as costs all around them skyrocket.
As an example of pluriactivity, let’s take a look at Sam’s case. Sam moved from the USA to Madrid to work in the Spanish headquarters of an international insurance firm. But Sam also has a passion for wedding photography and quickly gets a long list of clients who’ve seen her stunning Insta account.
If she wants to get the camera out at the weekend and bring in some extra income, she’ll have to register her photography work as pluriactivity. This means:
- Checking her company contract for anything preventing her from doing two jobs
- Registering for pluriactivity
- Continual management of her freelance taxes
Pluriactivity in Spain: FAQs
Everyone’s situation is slightly different, so we’ve put together some FAQs on pluriactivity in Spain so you can get a quick answer to those lingering questions:
Do I have to re-register as an employed worker to qualify for pluriactivity?
If you're already employed, there's no need to re-register as an employee. However, you will need to register as a freelancer (autónomo) with the Spanish Social Security System and Tax Authorities. This is a separate registration process, and it's essential for ensuring that you're making keeping up with your freelance social security contributions.
Do expat freelancers need a separate tax identification number for their freelance activities in Spain?
Expat freelancers need to register with the Spanish Tax Agency (Agencia Tributaria) and get a tax identification number (NIF), which is the same as your foreign identity number (NIE). This number will be used for both your employee and freelance activities and ensures you’re correctly paying taxes on both income sources.
Does pluriactivity mean I pay social security twice?
While pluriactivity means you’ll pay social security contributions for both roles, you're not exactly paying "twice”.
As an employed worker, Your social security contributions as an employee will be deducted automatically from your salary, and your employer will also contribute on your behalf.
As a self-employed worker, you'll make separate social security contributions based on your contribution base. These payments will be made directly to the Social Security System and are separate from the contributions made through your employer for your full-time job.
So, although you are paying social security contributions for both your employee and self-employed roles, the amounts are still in line with your earnings, so it's not exactly a double payment. Also, depending on your situation, you may be eligible for bonuses or reduced rates on your freelance contributions.
Can expat freelancers take advantage of the reduced flat rate tarifa plana for social security contributions?
Yes, expat freelancers in Spain who are new to the game are usually eligible for the flat rate tarifa plana, which offers reduced social security contributions for the first 12 months of freelance work. This can help you save on costs while you’re setting up your side gig.
Does paying social security as an employee and a freelancer give me two pensions?
Yes! As long as you’ve been paying both your social security contributions through your salary paychecks and your freelance contributions for 15 years each, you’re eligible to take out two pensions 🥳.
A step-by-step guide to registering for pluriactivity in Spain
1. Get your legal residency
As an expat freelancer, the first step you need to take to qualify for pluriactivity in Spain is to get a valid residency permit. If you’re currently legally working in a Spanish company, you’ll already have covered this step, so it’s straight onto step two for you.
If you're from an EU/EEA country, you're automatically legally allowed to work in Spain. However, you’ll still need to apply for a foreign identity number (número de identidad de extranjero — NIE).
If you're from outside the EU/EEA, you'll need to apply for a suitable visa first, before getting your NIE just like your European counterparts above. And here’s a tip — if you mainly work from your laptop, you might find that a Digital Nomad Visa, introduced in early 2023, is the easiest route.
2. Register as a freelancer with the Spanish Tax Agency (Agencia Tributaria)
Now you’re legal in Spain, the next step is to register as a freelancer with the Spanish Tax Agency. You’ll have to fill in a super-fun form (sarcastic face) — either 036 or 037, depending on your situation. This will give the tax authorities your personal information, residency details, and a general idea of what your freelance work will be.
3. Register as a freelancer with Social Security
With your NIE in hand, you’ll now have to register with the Spanish Social Security System (Tesorería General de la Seguridad Social). Giving similar details to those you gave to the Agencia Tributaria, you’ll now be on the Special Regime for Freelancers (RETA). This is a complex way of saying Social Security can see what you’re up to and will make sure you’re paying the right contributions every month.
4. Review your employment contract
If you're already working as an employee in Spain, make sure your employment contract doesn't have any clauses that prohibit you from taking on additional freelance work. If it does, you may need to discuss this with your employer and possibly renegotiate your contract 🤞.
5. Manage your tax and social security obligations
As a freelancer, you'll be responsible for managing your income tax and VAT payments, as well as your social security contributions. Make sure you keep accurate records of your income and expenses, submit your income tax and VAT returns periodically, and pay your social security contributions on time.
For your salaried job, the internal finance department will take care of your income tax (IRPF) payments and social security contributions. Although it’s technically not your responsibility, we would advise you to check your income tax rate. Some accountants can be a little lazy and put you on 2% — great in the short term, but you’ll have to pay the difference on your annual tax return.
6. Bring in outside help
Salaried workers have a finance department to sort them out, but almost nobody takes on the complex world of pluriactivity in Spain without an accountant to back them up. Even if you get the gist of these steps, Spanish admin has a habit of getting more complicated and time-consuming than any human could reasonably expect.
But don’t let that put you off! Almost all freelancers and pluriactivity pros outsource the convoluted work to a gestor — an admin and accounting specialist who will take care of all your frustrating legal forms and processes so you can focus on your actual work.
For example, at Xolo, we’ll register with the Agencia Tributaria and Social Security for FREE, take care of your tax returns and even give you a super-simple invoice generator to save you holding everything together with fragile Excel formulas.
5 key benefits of working in a company and freelancing at the same time in Spain
Now that we've covered the basics, let's get to the fun part — the perks! Being employed and self-employed at the same time in Spain can come with some pretty sweet advantages. Here are a few you should know about:
1. Social security incentives
When you're starting life as a freelancer, you’re probably eligible for the tarifa plana or flat rate. Aimed mainly at pure freelancers, this reduces your self-employed social security contribution (also called the freelance quota) to just €80 per month for the first year to help you get your business off the ground.
Pluriactivity workers also get a nice social security kickback to ease the burden, and the amount depends on whether your salaried job is full-time or part-time.
For full-time work:
- Up to 50% off the minimum contribution base for the first 18 months of Social Security registration.
- Up to 75% off the minimum base for the subsequent 18 months.
For part-time work:
- Up to 75% off the minimum contribution base for the first 18 months.
- Up to 85% off the minimum base for the next 18 months.
Here’s a key point to remember. These bonuses for pluriactivity workers can’t be combined with other offers, such as the flat rate for new freelancers. However, if eligible for multiple incentives, pluriactivity workers can choose the one that best suits their needs 😃.
2. Tax deductibles
Just like those who go fully freelance, some of your business-related expenses can be deducted from your income, which reduces the amount of income tax and VAT you’ll pay. Just make sure you keep detailed records and consult with a tax professional to ensure you're taking advantage of all the available deductions and benefits.
3. Diversified income
Pluriactivity means you have multiple income streams — a huge advantage in these uncertain economic times. By diversifying your income, you can reduce the risk of financial setbacks and increase your overall financial stability.
4. Personal and professional growth
Working in two different roles can be an excellent opportunity for personal and professional development. You'll have the chance to learn new skills, expand your network, and potentially discover new passions.
5. Women in pluriactivity
For pregnant women working on the pluriactivity system who become pregnant, potential risks during pregnancy will be assessed to determine the appropriate benefits. For example, if your salaried job is data entry, but you freelance as a sky diving instructor, most people would consider the latter riskier than the former.
- If the risks affect all activities (both employed and freelance roles), you can get benefits under both schemes, provided you meet the independent requirements for both.
- If the risks don’t affect all your activities, you'll only get benefits under the scheme of the risky activity in question.
Xolo: Because nobody launches a business for the admin
We know we’ve just hit you with a huge amount of information there, and it’s a lot to take in. But if you’re wondering how people manage pluriactivity in Spain without tearing their hair out, don’t sweat it! We can share the secret with you.
Ain’t nobody got time to stay on top of everything, even more so when they’ve got two jobs on the go. That's where Xolo comes in. Xolo helps you navigate the complexities of working in a company and freelancing in Spain. From taking care of the admin and managing your finances to ensuring you comply with all the regulations, we’ve got your back.
And the best part? This gives you more time to focus on what you love doing — growing your business.
So why not give Xolo a try and see how it can make your pluriactivity journey a whole lot smoother?
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.