if it works on behalf of someone else, but you need to have an additional incometto work as a self-employed person, that is, on green receiptsmay be the solution. Thus, these two types of activity have different rules regarding taxes and contributions for Social Security. Therefore, it is important that you clarify your doubts before deciding to combine the two activities.
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work for someone else
if youwork on account someone else does not have to worry about the contributory obligations to Social Security or the monthly IRS payment about your income. THE employer’s responsibility.So, monthly the company where you work makes the IRS withholding due on your monthly income according to the IRS withholding tables that are released annually. You are solely responsible for filing the annual IRS tax return.As for the Social Security is also the employer making the contribution corresponding to its share. In other words, you will withdraw 11% from your salary, which you will hand over to Social Security (together with the contribution for which you are responsible). net salary, that is, already deducted from the amount related to the IRS and contribution to Social Security.
Working on green receipts
In the case of workers with green receipts, the situation is different. You self-employed workers have to deal with taxes and Social Security contributions themselves.In tax terms when issuing receipts you have to consider, in addition to the IRS, the VAT that you will have to deliver to the State. As for the Social Security must make the quarterly statementle deliver the contribution amount directly to the State.
As for the IRS, in the first year of activity, you do not have to withhold, as long as you do not exceed €12,500 in income (if you exceed you have to make the retention). If it exceeds in the following year, you will have to include the IRS withholding in the receipt according to the current rate for the CAE indicated in the opening of the activity. The retention will be made by the entity to whom the service was provided, which will have to hand it over to the State. If in one year you do not reach €12,500, in the following year you will not have to withhold tax until you reach that amount.Also read: IRS: Guide for those who work on green receipts
As for the VAT, in the first year of activity is also exempt. But if it exceeds €12,500 in the following year will pay VAT. You will have to include this amount in the green receipt that you issue and you must make the quarterly statement delivering to the State the amount received from the company to which it provided services.
As to contributions due to Social Security, must pay from the beginning of the activity, submitting the quarterly statement and making the corresponding monthly payment. The contribution will be 21.4% on 70% of the average income for the previous three months. Through the declaration, Social Security calculates the contribution amount you will have to pay in the following three months between the 10th and 20th of each month.
Working for others and on green receipts
As a general rule, there is no impediment to accumulating work for others with green receipts. However, there may be cases where this is not possible.
when it is not possible tto work for others and to green receipts?
it will not be possiblewhen there is incompatibility between the two activities. In other words, under the terms of article 128 of the Labor Code, the employee must retain loyalty to employernamely not trading on their own account or on behalf of others in competition with them, nor disclosing information regarding their organization, production methods or business. exclusivity clause that prevents you from performing any other activity. You should therefore talk to the company’s Human Resources and express your desire to have your own activity. In most cases it is accepted, as long as it does not imply less dedication to your activity in the company.
Accumulating on behalf of others and green receipts: Obligations
If you combine the two activities, keep in mind that theThe rules on Social Security contributions and tax filing change.
No IMonthly RS there is no accumulation of income. Ie, each activity is taxed by itself. In the activity on behalf of others it is taxed according to its salary and in the work the green receipts also apply the rules of this activity.What changes is the annual declaration. You will have to deliver the Annex A of IRS Model 3 relating to earnings as an employee and the Annex B regarding the income you obtained as a self-employed person (note that for income from green receipts you will only pay tax if the income exceeds €12,500)Note, you can choose to do the aggregation and both income will be taxed together. But to do so, you must do a simulation before delivering, and then choose the one that allows you to pay less tax (or receive a greater refund).
In this case, for the work performed at green receipts may not have to make Social Security contributions.In fact, do not have to make discounts for Social Security, if you cumulatively meet the following conditions: Work for someone else and on green receipts for different entities and that do not have a domain or group relationship between them; Have a monthly income on green receipts less than 4 times the amount of the Social Support Index, that is, in 2022 a value lower than €1,772.8 (2022 IAS is €443.2)Have a monthly income as an employee higher than the value of the Social Support Index, or that is, in 2022 at €443.20If you are exempt, you do not have to submit the quarterly statement. If you do not meet the three conditions, you will have to pay Social Security contributions. the only condition that fails to meet is to have an income related to green receipts greater than 1,772.80even so will benefit from a reduction, since the contribution rate will only be levied on the amount that exceeds this value. That is, if, for example, your average monthly income in a quarter is €2,000, you will only pay 21.4% x (2,000 – €1,772.80), that is €48.62.
On behalf of others and green receipts for the same entity
In this situation, we are talking about a special work regime: the accumulation regime.This can happen, for example, if, in addition to normal work, the company asks you to provide training and asks you to issue a green receipt as remuneration for this work. In this case, in terms of IRS, the aforementioned for green receipts applies. Social Security, the current one applies for employees. In other words, the company will have to make contributions on this amount as income on behalf of others: deduct 11% from the amount paid to the worker and pay the corresponding part to the company.