Everything you need to know to work as a freelancer in Madrid

James McKenna
Escrito por James McKenna
el 02 de noviembre, 2022

Madrid is well known as one of the best cities for vacations in Europe, but did you know it’s also a startup hotspot that welcomes ambitious solos with open arms? Quintessentially Spanish, there’s also a healthy community of expats, giving you the best of both worlds in your professional and social lives. 

However, while you’re guaranteed excellent weather, delicious tapas, and a cultural experience that rivals the best cities in the world, work as a freelancer in Madrid comes with its complications — especially if you don’t know the language. There are tons of hoops you’ve got to jump through to stay compliant, and the famously unhelpful admin workers can be a black hole for your valuable time. 

But fear not! We’re here to break down life as a freelancer in Madrid into clear, manageable chunks so you can hit the ground running. 

Common Spanish phrases for freelancers in Madrid

It is theoretically possible to set yourself up as a solo in Spain without learning the language, but you can go much further and faster if you’re fluent. Changes like this don’t happen overnight, so if you’re new in town, here are some of the most useful words and phrases for expat freelancers in Madrid.

  • Agencia tributaria (AEAT) — The Spanish tax agency
  • Autónomo — A freelancer
  • Cuota de autónomos — Your monthly payment to social security
  • Darse de alta (de autónomo) — Register (as a freelancer)
  • Declaración trimestral — Your quarterly tax reports, which Xolo can take care of for you
  • Factura — An invoice
  • Funcionario — A Spanish civil servant or admin workers 
  • Gestor — An accountant
  • Hacienda — The Spanish treasury department 
  • IRPF — Your personal income tax
  • IVA — Value added tax (VAT)
  • (La Declaración de) la Renta — Your yearly tax return (submission). Based on a January to December fiscal year, you submit it between early April and late June.
  • NIE — A número de identidad de extranjero: The tax identification number for foreign nationals living in Spain
  • Seguridad social — Social security

Why live and work as a freelancer in Madrid?

If you’re desperate to get away from a cold, rainy climate, there are few places in the world better than Madrid. With more than 300 days of sunshine a year, a free tapa with your drink, and breathtaking art galleries, it’s easy to see why it’s such an attractive city to live in. 

It’s a noticeably sporty city, with all kinds of clubs to join or informal groups that meet up to break a sweat in one of Madrid’s enormous parks. Madrileños are known for their friendly, outgoing attitude, so it’s relatively easy to get integrated. This crosses over into your freelance work too.

If you work as a freelancer in Madrid, you can join a thriving community of solos who collaborate, support, and motivate each other. The city is great for networking too, from small-scale, informal meetups to enormous events like South Summit.

What does it take to make it as a Madrid freelancer?

Before you get too seduced by the Madrid lifestyle, remember you will have to actually work to afford it. And unlike company workers, you have a lot of responsibilities that can eat into your free time if you’re not smart about them. From keeping your books and invoices in check to fulfiling your quarterly tax returns, you can get into serious legal issues if you’re not on top of things. 

Therefore, you need to be well aware of all your responsibilities and be ultra-organized when it comes to your finances. Microsoft Excel has long been the savior of freelancers in Spain and around the world, but it is pretty limited in what it does. If you’re familiar with your formulas, you can keep on top of what comes in and what goes out, but there's nobody to ask questions to when things get confusing. 

More recently, new platforms have been popping up, such as Xolo. As well as creating compliant invoices with ease, there is a huge knowledge base and support from teams of local experts. This means you can skip the common problems of work as a freelancer in Madrid and focus more time and energy on building your business. 

New call-to-action

How to get started as an autónomo in Madrid

As this article focuses specifically on how to work as a freelancer in Madrid, we’ll be brief on what you need before registering as an autónomo. If you’re coming from abroad, you’ll first have to sort out your visa. Then, when you get to Spain, you’ll have to organize: 

  • A bank account
  • Your national identity number (NIE)
  • Your social security number 
  • Proof of residency (empadronamiento)

If you know anyone who has been through these processes before, you’ll have heard about how frustrating these Kafkaesque bureaucratic offices can be. Preparedness and patience are the two keys to this game. As another tip: don’t expect your funcionario to offer any advice. You may have to be a bit pushy to get things over the line.

But there’s good news! Xolo will help you register as an autónomo for free, as long as you don’t unsubscribe from the service in the first six months. Forget about travelling to different offices hoping you’ve got enough photocopies of your documents. All Xolo ask for is:

  • Your NIE
  • Ten minutes of your time 

How much does it cost to live and work as a freelancer in Madrid?

Before looking at the general living expenses in the Spanish capital, we’ll cover the working costs for autónomos. Getting a NIE and a social security number will set you back a small admin fee, but it can get more expensive to set yourself up as a freelancer. With the complications and technical language involved, many choose to go down the accountant route.

An accountant will charge you around €50, but beware there are some considerable fluctuations in cost and quality among accountants. As mentioned before, you can register to work as a freelancer in Madrid for free with Xolo, and save yourself a lot of time and stress as you do it.

Another cost associated with your business is la cuota de autónomos. Although some think it is a fee for being a freelancer, it is actually the social security payment that would come out of your paycheck if you were working in a company. 

As of 2022, new autónomos pay just €60 per month for the first year. From the second year, the cuota rises yearly until it settles at €294. There are movements in the Spanish government to change this to match the individual’s earnings. But Xolo members can always reach out to professional accountants if they have any questions regarding changes in the cuota

Living costs for freelancers in Madrid

You can easily get an apartment to yourself for under €1000, or go for a room in a shared flat for as little as half of that. Average monthly costs for everything aside from your rent are €703.59, but you can easily tighten the purse strings if you’re feeling the pinch. 

With an excellent metro and bus system, many solos that work from home choose to live outside of the center where you can get a bit more luxury for the same money. You can get 10 trips on public transport for €12.00 at time of writing, or get around the city the healthy way on the BiciMAD bikes that give you a powerful battery boost. 

Like the rest of the world, Spain is suffering from the global energy crisis. Therefore, the fluctuations in cost make it hard to specify on an average cost for gas and electricity. And, while food prices have risen due to inflation, they are still far lower than in more expensive places such as Northern Europe and the USA.

Eating out and entertainment costs for freelancers in Madrid

Madrid is a city that lives outside, and sitting out on a terrace for dinner is practically a national pastime. Although it depends on where you come from, you’ll probably find that drinks are reasonably priced, and a tapa with every round means you often don’t have to go out for a sit-down meal.

When you do decide to splash out, you can easily get well wined and dined with a three-course meal for under €50. For lunch, you can get the Spanish staple menú del día (starter, main, dessert, soft drink) for between €10 to €15, and if it’s a business lunch, you can offset the IVA on your tax returns. 

A night out in the rich and varied neighborhoods in the center will be considerably cheaper than in Northern Europe. However, with many places open until the not-so-early hours of the morning, Madrid’s famed nightlife can get pretty expensive simply because of the amount of hours you’re out. For a more cultured experience, expect to pay no more than €15 for the iconic museums of el Prado, Thyssen-Bornemisza, and Reina Sofía — but it’s always best to book in advance.

What legal and financial responsibilities do you have if you work as a freelancer in Madrid?

In brief, solopreneurs have to take care of all billing and invoicing, quarterly and annual tax returns, and social security contributions. Although that doesn’t sound like much, these processes can eat into your working day, so streamlining them is of top importance.

Social security — the cuota de autónomos

Starting with the easiest of these processes, you can set up a standing order for your social security payments and take a hands-off approach. In your first year, you’ll pay €60 per month,  but it rises steeply to €294. Factor this into your budgeting from day one for a bit more peace of mind at the end of each month. 

Invoices and tax payments

Aside from including details of your work and the amount you charge your clients, Spanish invoices need to include sections for the following two tax obligations:

  • Income tax payments (IRPF) — 15%
  • The standard rate of value added tax (IVA) — 21%

In your first two years of work as a freelancer in Madrid, you can set your IRPF at 7% to get your businesses going. However, you will still have to make up the difference after the grace period, meaning a lot of solos stick to the 15% rate from the outset. Remember that the 15% does not accurately reflect what you owe — your true tax rate is calculated in your quarterly tax returns

Usually, your Spanish clients will pay your IRPF directly to the Agencia Tributaria, which is one less thing to worry about. However, your clients pass their 21% IVA contribution on to you, so don’t spend it! You’ll have to give it up in your quarterly tax returns. 

Head to our guide to invoicing as a freelancer in Spain to find out how to create invoices and get details on what sort of activities qualify for tax exemptions. 

Tax returns

At the end of every quarter, anyone working as a freelancer in Madrid has to submit their tax returns for the trimester. You can do it manually via the form 130 (IRPF) and form 303 (IVA), with payment to be made before the 20th of the following month. However, to avoid the headache, most autónomos outsource this to a gestor or an all-in-one service like Xolo.

Your yearly tax return, the dreaded Declaración de la Renta, comes around between April and June every year. Even people working in a company have to file these reports and everyone who has tried to do it themselves has a horror story to match, so we’d highly recommend getting an expert to work through the complex process. 

New call-to-action

Where to work as a freelancer in Madrid

Anybody seduced by rooftop terraces, soundproofed rooms, and free coffee can usually find one of the major players in the coworking world with a quick Google search. They are a great option, offering security for sensitive work and a whole host of extras. However, they’re often too great an expense for solos just getting started. Therefore, we’ll only cover places that are free to go to, although you’ll usually have to buy a coffee or a sandwich for the privilege.

Madrid is awash with cafes dripping with personality and great Wi-Fi. You can keep things fresh by bouncing between them, and although you might pay slightly more than you’d like for your café con leche, they’re often designed with solos in mind. 

This hub is a charming, quirky kind of joint that has the vibes of a rich eccentric’s living room. Excellent Wi-Fi, a fireplace to warm your bones on chilly winter days and a chill. If you need that natural light, it’s got window seating, and a great menu of quality grub.

With vintage décor where no two seats are the same, Lolina has a lot of working space over two floors. The Wi-Fi is not as amazing downstairs, but more than good enough for most web-based work. You also don’t need to leave your chair for a well-deserved signature cocktail. 

  • Public libraries

For quiet, deep work, there are libraries scattered all over the city, and some are quite frankly jaw-dropping. Escuelas Pías, for example, feels like you’re sitting in a grand cathedral in the bustling neighborhood of Lavapiés. Refurbished and reopened in 2021, it is still relatively under the radar, so you should be able to find a seat with little problem. 

Getting help and advice as a freelancer in Madrid

Without the support of finance and HR departments that you’d get when working in a company, it’s hard to know where to turn when you need advice. But with the tips below, help is never far away.

Freelancer communities

The solo network in Madrid is huge, and there are WhatsApp groups and communities that you can join for great contacts and advice. Xolo has a Slack channel, where you can pick the brains of those who have been in the game for a long time.

Individual accountants

Gestores are a big deal in Spain because of the somewhat incoherent maze of government websites and portals. Without any real guarantee of quality outside reviews and word of mouth, solos run the risk of paying a lot for very little in return. 

Accountancy and invoicing platforms

More and more freelancers are taking the easy route, and over 100,000 have chosen Xolo. As well as super-simple invoicing and tax calculations, you get access to a knowledge base, an active community of solos, and local experts who know everything about work as a freelancer in Madrid.

Solos who decide to switch countries can take Xolo with them. We know the ins and outs of legal and financial processes in over 150 countries. And that team of experts? They stretch all over the world.

Forget about Spanish red tape and focus on building your business!

If you’re new to work as a freelancer in Madrid, all of the responsibilities covered here might seem daunting. But you don’t need to go it alone. 

On one super-simple platform, Xolo cuts out the boring admin for freelancers in Madrid and lets them focus on what they do best.

✔️We’ll get you registered as an autónomo for FREE

✔️Create and send sleek-looking invoices to clients all over the world from one dashboard

✔️Get access to a team of experienced local accountants who can take care of all your tax returns

If that sounds like what you need to start work as a freelancer in Madrid, sign up to Xolo today.

New call-to-action