Can you be self-employed and an employee at the same time?

Employees sometimes consider starting a business of their own. However, leaving their job to devote themselves fully to the new venture carries risks, which is why many people ask whether it is possible to be self-employed and an employee at the same time. In other words, whether they can launch their own project without giving up their job.

That said, make sure that your employer allows it. In other words, check that you have not signed any exclusivity or non-compete clause. Below we explain everything you need to know if you want to be self-employed while working for a company.

Differences between multiple activity and multiple employment

The first thing to bear in mind is that multiple activity (pluriactividad) and multiple employment (pluriempleo) are different concepts. Multiple employment refers to people who work for two or more companies at the same time but remain within a single scheme, the General Social Security Scheme (Régimen General de la Seguridad Social). Multiple activity, by contrast, arises when a person pays contributions into more than one Social Security scheme.

As you can see, multiple activity is your situation if you want to work for a company and be self-employed at the same time.

Relief (bonificaciones) on the self-employed contribution

Because you are already paying contributions through your employment, your self-employed contribution will be lower, and you will pay less than a self-employed worker who contributes on the minimum contribution base.

The relief works as follows:

• First 18 months as a self-employed worker: a 50% reduction on the minimum contribution base.
• Next 18 months as a self-employed worker: a 75% reduction on the minimum contribution base.

There are two requirements to obtain this relief:

• Registering as self-employed for the first time in the Special Scheme for Self-Employed Workers (RETA).
• Starting the multiple-activity situation with that registration.

This relief cannot be combined with other forms of relief, such as the flat rate (tarifa plana). You may apply for one or the other, but not both.

Payment of taxes

The payment of taxes also involves certain nuances that should be borne in mind. The idea is as follows. As regards your employment, the corresponding Personal Income Tax (IRPF) withholdings will apply. When it comes to reporting your self-employment income, in addition to IRPF, you will have to file quarterly VAT (IVA) returns. Although this adds complexity, it is by no means impossible. What you will need to do is pay close attention to your tax returns and your income tax return, because it is relatively easy to forget one of the taxes or contributions, with the resulting risk of penalties.

Is it possible to remain in multiple activity indefinitely?

Yes, technically it is possible to remain in multiple activity indefinitely. The problem is that this can become problematic in the long run, because after three years the relief for self-employed workers will no longer apply. In addition, you should check whether it is worthwhile for you, because your entitlements or conditions regarding disability or accident benefits will vary. Consequently, a high level of income is needed in both cases for it to be profitable.

Are there any legal limitations on multiple activity?

Yes. In principle, a limitation exists for certain civil servants or members of the branches of the State (judges). In this case, they will need to submit a declaration of compatibility showing that there is no interference between their position and the multiple activity. Only if it is approved by the Administration may the activity be carried out.

Are there any age limitations on multiple activity?

Yes, because in Spain there is an age limit for being self-employed. A person cannot be self-employed unless they are of legal age, so you must be at least 18 years old to be in a multiple-activity situation.

Financial security and retirement

You could receive two pensions, one as a self-employed worker and another for having worked as an employee, provided that you have paid contributions for at least 15 years under both schemes.

If you do not reach 15 years under one of the two, you can accumulate your contributions in the scheme in which you are able to contribute.