Understanding the 6 types of self-employed workers in Spain

Hola to all you expat freelancers in Spain! If you’re reading this, we can safely assume you want to work for yourself, but do you know about the six types of self-employed workers in Spain? 

Knowing which category you fit into can help you optimize your work and financial life, ensuring you're on the right side of the law and making the most of your entrepreneurial adventure. 

In this article, we'll dive into the six types of self-employed workers in Spain and give you a rundown of the key info you need to succeed.

But before we get started, we’re going to give you a refresher course on two key concepts that we’ll be referring to throughout the article: social security regimes and income tax systems.

What are the social security regimes for self-employed workers in Spain?

A social security regime in Spain refers to a set of rules and regulations that govern the country's social security system. It is a comprehensive program designed to provide financial support, healthcare, and various benefits to workers and their families in Spain, including self-employed individuals.

Aside from the general regime for employed workers, the social security system for self-employed workers in Spain is divided into several regimes. These regimes include:

RETA (Régimen Especial de Trabajadores Autónomos)

RETA is the Special Regime for Self-Employed Workers in Spain. This social security regime covers most self-employed workers, such as self-employed individuals, freelance professionals, and economically dependent self-employed workers (TRADE or TAED). Under RETA, self-employed workers must pay monthly social security contributions that are linked to their expected income.

Special Agricultural Regime (Régimen Especial Agrario)

The Special Agricultural Regime is a social security regime specifically designed for agrarian self-employed workers who carry out agricultural, livestock, or forestry activities for profit. Under this regime, agrarian self-employed workers must pay monthly social security contributions based on a flat rate, which depends on factors like age, professional activity, and years of contribution.

Other Social Security Regimes

For other types of self-employed workers in Spain, such as members of associated work cooperatives or industrial partners of companies' regular collective and limited partnerships, there are more specific regimes. These regimes are tailored to the unique characteristics of their specific type of self-employed work and may have different contribution requirements and benefits.

Clearly, this is a brief snapshot of the regimes for the different types of self-employed workers in Spain. If you’re into that sadomasochist life, there is a thrilling 732-page book 🙄 on the RETA that you could take on holiday with you. Alternatively, you can always reach out to an expert who will give you everything you need to know about the right regime for your business. 

What are the income tax systems for self-employed workers in Spain?

Let’s now move away from the social security system and head over to the tax authorities — la Agencia Tributaria. 

The rates and structure of income tax change between the six types of self-employed workers in Spain, so to make sense of the differences and similarities, you’ve got to know your systems.

Progressive income tax system

The progressive income tax system applies to most self-employed workers in Spain, such as typical self-employed individuals, freelance professionals, and economically dependent self-employed workers (TRADE or TAED). 

Under this system, income tax rates range from 19% to 45% depending on the worker's income. This system ensures that individuals with higher incomes pay a larger share of their income in taxes compared to those with lower incomes. 

Flat-rate corporate income tax system

The flat-rate corporate income tax system applies to self-employed entrepreneurs who create and manage their own companies or businesses, such as limited liability companies (SL). Under this system, a flat rate of 25% (as of 2021) is applied to the company's taxable income. This simplified tax structure allows businesses to predict their tax liabilities more accurately and facilitates business planning.

Special income tax systems

Certain self-employed workers, such as members of associated work cooperatives or industrial partners of companies' collective and limited partnerships, may be subject to special income tax systems based on their specific category. Most self-employed workers in these more confusing categories will heavily rely on an accounting and management service, or gestoría, to keep them compliant.

Now let’s turn to the six types of self-employed workers. As a proviso, your first port of call for living and working in Spain is to get a foreign identity number, or número de identidad de extranjero (NIE). 

1. Self-employed workers — autónomos

Self-employed workers, freelancers, or autónomos in Spain are what first come to when you think about working alone. They work independently, are not subject to an employment contract, and are directly responsible for their business's operations and financial management.

As an example, let’s take Maria, a hairdresser who recently moved to Spain. She offers her services to various clients, manages her own workload and schedule, and takes care of invoicing and taxes. Well done Maria, you’re a self-employed worker 😀.

How to become a self-employed worker

To become a self-employed worker in Spain, you need to follow these steps:

1. Register with the Agencia Tributaria by completing Form 036 or 037 and selecting the Economic Activities Tax, Impuesto de Actividades Económicas (IAE) code that corresponds to your business.
2. Register with the Social Security System, Tesorería General de la Seguridad Social (TGSS) by completing Form TA0521 and joining the Regime for Self-Employed Workers (RETA).

Main obligations for self-employed workers in Spain

As a self-employed worker in Spain, some of the main obligations include:

• Issuing invoices for your services with income tax (IRPF) and VAT (IVA) 
• Filing quarterly VAT returns
• Filing income tax (IRPF) quarterly prepayments and your annual income tax return
• Paying monthly social security contributions

In 2023, social security contributions for self-employed workers went through an overhaul and now fluctuate depending on how much you’re making. However, to help new freelancers get started, there is a helpful flat rate quota for your first year, sitting at just €80 per month. 

On the income tax side of things, self-employed workers are on a progressive system, ranging from 19% to 45%. 

2. Freelance professionals — profesionales liberales

Freelance professionals, or profesionales liberales, are very similar to their self-employed counterparts, and terms are often used interchangeably. However, what we’re talking about here are people who provide specialized services or expertise in a specific field, such as law, engineering, or consulting. Freelance professionals can be divided into two subcategories: collegiate professionals and non-collegiate professionals.

• Collegiate Professionals: These workers have to join a professional association or colegio profesional in their field, like lawyers, architects, and physicians.
• Non-collegiate Professionals: These are people who don’t have to join a professional association, but still provide specialized services. Examples include graphic designers, consultants, and writers.

Take Clarissa, an expat lawyer from the United States who decides to practice law in Spain. She has to join the local lawyer’s bar (colegio de abogados) to legally offer her services. On the other hand, Emma, a freelance marketing consultant, can work independently without joining a professional association.

How to become a freelance professional in Spain

To become a freelance professional in Spain, follow these steps:

1. If you're a collegiate professional, join the relevant professional association in your field.
2. Fill in Form 036 or 037 with the Agencia Tributaria and select the right IAE for your business professional activity.
3. Register with social security with Form TA0521 form and join the RETA, just like your self-employed friends.

Main obligations for freelance professionals in Spain

Aside from joining a professional association, freelance professionals in Spain have identical obligations to self-employed workers.

3. Self-employed entrepreneurs or corporate freelancers — autónomo societario

Self-employed entrepreneurs, also known as corporate freelancers, create and manage their own companies or businesses. They can establish various types of legal entities, such as sole proprietorships, limited liability companies (SL), or cooperatives, to conduct their business activities.

Lucy, for example, is a British expat who opened a boutique marketing agency in Barcelona. She decides to set up a limited liability company (SL) to provide marketing services to local and international clients. Well done Lucy, you’re a corporate freelancer!

How to become a self-employed entrepreneur/corporate freelancer

To become a self-employed entrepreneur or corporate freelancer in Spain, follow these steps:

1. Choose the right legal structure for your business (sole proprietorship, SL, cooperative, etc.). If you need help deciding which is best for you, the team at Xolo can help you out!
2. Register your business with the Commercial Registry (Registro Mercantil) and get a company tax identification number (CIF).
3. Fill in Form 036 or 037 with the Agencia Tributaria and select the right IAE for your business professional activity.
4. Register with social security with Form TA0521 form and join the RETA, just like your self-employed friends.

Main obligations for corporate freelancers in Spain

As a corporate freelancer, you have quite similar social security and tax obligations to your non-corporate friends. 

However, one key difference is that legal entities such as limited companies pay a flat rate of 25% on their profits. This makes corporate freelancing more cost-effective than the progressive system for sole traders, as long as you earn around €40,000 or more per year.

4. Economically Dependent Self-Employed Workers (TRADE or TAED) — trabajadores autónomos económicamente dependientes

Economically dependent self-employed workers, also known as TRADE, Trabajador Autónomo Económicamente Dependiente or TAED, Trabajador Autónomo Económicamente Dependiente, are those who get at least 75% of their income from a single client. These workers have more rights and protection than other self-employed workers, as they are more vulnerable to fluctuations in their client's business.

Say hi to Carlos, a software developer who works exclusively for a single tech company, providing development services and deriving over 75% of his income from this client. Carlos is considered an economically dependent self-employed worker. He gets similar conditions to his salaried colleagues but has the freedom to choose the hours he works.

A quick warning about false self-employed (falso autónomo) work in Spain

A false self-employed worker is someone who is registered as self-employed but works under conditions similar to an employee, such as having a fixed schedule and being subject to the employer's control. Employers may suggest this to avoid paying social security contributions to their workers. 

This practice is illegal and can lead to penalties for both the worker and the employer. It's crucial to ensure that your working relationship adheres to the legal guidelines for self-employed workers to avoid the risks associated with being classified as a false freelancer.

How to become an economically dependent self-employed worker

To become an economically dependent self-employed worker in Spain, follow these steps:

1. Fill in Form 036 or 037 with the Agencia Tributaria and select the right IAE for your business professional activity.
2. Register with social security with Form TA0521 form and join the RETA, just like your self-employed friends.
3. Sign a formal agreement with your client that outlines the nature of your working relationship and your status as a TRADE or TAED.
4. Register your TRADE or TAED status with the Spanish Tax Agency and the Social Security System.

Main obligations for economically dependent self-employed workers

Economically dependent self-employed workers have similar obligations to other self-employed workers, such as managing their business operations, fulfilling tax obligations, and paying social security contributions. 

5. Agrarian self-employed workers — autónomo agrario

Agrarian self-employed workers carry out agricultural, livestock, or forestry activities for profit. They work independently and are responsible for the management and operations of their agricultural businesses.

Picture Ana, a British expat who moves to the Spanish countryside and starts a small organic olive farm. She manages the farm herself, selling her olive products at local markets and online. Ana is considered an agrarian self-employed worker — good for her.

How to become an agrarian self-employed worker

To become an agrarian self-employed worker in Spain, follow these steps:

1. Fill in Form 036 or 037 with the Agencia Tributaria and select the IAE code that corresponds to your agricultural activity.
2. Register with the Social Security System (Tesorería General de la Seguridad Social) by completing the TA0521 form and joining the Special Agricultural Regime, Régimen Especial Agrario, or SETA.

Main obligations for agrarian self-employed workers in Spain

Agrarian self-employed workers get a handy kickback in terms of social security. While most freelancers qualify for a flat rate contribution of €80 per month, agrarian freelancers benefit from a €50 contribution for the first year.

6. Other self-employed workers

Other self-employed workers are those who don't fit into the previous categories but still carry out professional or business activities independently. Some examples include self-employed collaborators, members of associated work cooperatives, community members or partners of the community of property and irregular civil companies, and industrial partners of companies’ regular collective and limited partnerships.

How to become this type of self-employed worker

Due to the ambiguous nature of these unique categories, we’d highly recommend getting in touch with experts on the different types of self-employed workers in Spain before making any decisions.

The six types of self-employed workers in Spain: At a glance

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Now you understand the six types of self-employed workers in Spain, you can go about starting your business and getting on with work. 

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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.