Pricing and freelance income

It is for anyone thinking about, planning or carrying out a move to Spain. The aim is simple: price your work so you keep what you need after Spanish costs, and plan ahead for the slow months.

Start with "What being self-employed (autónomo) costs in your first year". Once you know your costs, move on to "Setting your freelance rate so you keep what you need". The other pages cover realistic earnings, splitting each payment, and surviving slow months such as August.

This Topic is not about employee pay, a full household budget or proving your income to a landlord.

Key rules

• Reduced first-year quota: New autónomos pay a flat 80 euros a month for the first 12 months, and can get 12 more months at the same rate if net income stays below the minimum wage.
• Invoice withholding: Invoices for professional activities to Spanish businesses must show an income tax withholding of 15%, or 7% in the first three years of activity if you qualify.
• VAT rate: Most freelance services such as design, IT, consulting, translation and writing are charged 21% VAT on mainland Spain and the Balearics.
• Quarterly income tax: Each quarter you pay 20% of your cumulative net profit since 1 January, less earlier payments and withholdings.
• Reserve size: Keep a reserve of 3 to 6 months of expenses, and up to 12 months if your income is very irregular.
• When VAT is owed: VAT is owed for the period when you issue the invoice or deliver the service, even if the client has not paid yet.

Pricing and freelance income: the whole process, step by step

• Check what freelancers really earn and how long break-even takes (What freelancers really earn in Spain, and how long to break even): before you commit; 6 to 12 months is typical for a service freelancer with low costs

• Budget your first-year costs, including the 80 euros a month reduced quota (What being self-employed (autónomo) costs in your first year): before you register; the reduced quota lasts 12 months

• Set your freelance rate from your target net income (Setting your freelance rate so you keep what you need): before you send your first quote; plan on roughly 150 to 200 billable days a year, fewer at the start

• Split every payment into spend, tax, VAT and reserve (How much to set aside for tax and quota from each payment): every time a client pays you

• Build a reserve of 3 to 6 months of expenses (Surviving irregular income and slow months, including August): from your first months; invoice early before August and Christmas

• File your quarterly returns (How much to set aside for tax and quota from each payment): 1-20 April, 1-20 July and 1-20 October, and in January by the 30th

• Chase late payers and claim default interest (Surviving irregular income and slow months, including August): when an invoice passes 30 days, or 60 days if you agreed a longer term

• Recover VAT on an invoice that is never paid with a corrective invoice (How much to set aside for tax and quota from each payment): at least 6 months after the VAT was due, after a formal demand for payment

• File your annual income tax return (How much to set aside for tax and quota from each payment): early April to 30 June each year

Pricing and freelance income: questions that cross several articles

Does the reduced first-year quota last longer than 12 months?

Yes, you can get 12 more months at 80 euros a month if your net income stays below the minimum wage. You must also be a new autónomo, or have been out of the system for the previous 2 years (3 years if you used the reduced quota before). Read What being self-employed (autónomo) costs in your first year, then How much to set aside for tax and quota from each payment.

How much of each payment should I keep for income tax?

You pay 20% of your cumulative net profit each quarter, less earlier payments and withholdings. Your final tax rate depends on your region and total profit, and it rises in bands. Read How much to set aside for tax and quota from each payment, and Setting your freelance rate so you keep what you need to price it in.

How should I plan for August and Christmas?

Expect demand to drop in August and from about 23 December to 6 January, and expect July and December invoices to be paid in September or January. Invoice early and keep a reserve of 3 to 6 months of expenses. Read Surviving irregular income and slow months, including August, and What freelancers really earn in Spain, and how long to break even.

Does my quota rise as I earn more?

Yes, since 2023 your monthly quota depends on your net income bracket, and higher brackets pay more. The tables are updated each year. Read What being self-employed (autónomo) costs in your first year, then Setting your freelance rate so you keep what you need to include it in your price.