If you are thinking of accumulating dependent work and green receipts, see what the rules are regarding taxes and Social Security.
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Having a double job, especially if this situation results from the accumulation of dependent work and green receiptsimplies knowing well the tax and contribution obligations.
This is because you are, in practice, carrying out two different types of work, with different rules. But what exactly are the differences? And does the accumulation pay off?
Dependent work and green receipts: the differences
With regard to work for others, obligations in terms of discounts for the IRS and Social Security are the responsibility of the employer. Thus, when the worker receives the salary, it is already net. That is, it has already deducted the amount related to taxes and contributions.
When you work on green receipts, you have to deal with these issues yourself. Issuing receipts, making or not withholding at source, submitting the quarterly declaration to Social Security and paying the respective contributions are common tasks for those who are in this work regime.
Thus, if you intend to accumulate dependent work and green receipts, it is important to know some rules and know what to do in terms of tax and contributory obligations.
IRS on dependent work and green receipts
If you are or are going to work for someone else and with green receipts, you will not have, for tax purposes, an accumulation of income that could imply a step up.
That is, the income you receive from dependent work is taxed according to the rates in force for that income category. And the same goes for self-employed people.
Thus, and with regard to the amounts you obtain through green receipts, you only have to withhold if the annual turnover exceeds 12,500 euros. This is also the threshold amount for charging and paying VAT. That is, if you receive less than that, you may not make monthly discounts on that amount.
And how does the IRS statement work?
When submitting the IRS declaration, you must complete the annexes for both types of income.
In addition to the cover sheet, you must submit Annex A, which contains the income from dependent work and Annex B, with those you obtained through independent work.
Opt for category A taxation
When you accumulate dependent work and green receipts, taxing both incomes in the same way can be an option. However, you can only do so if you are included in the simplified regime and if the independent work has been provided to only one entity.
In that case, the two incomes are added together and the specific deduction of 4,104 euros is applied to that sum.
The ideal would be to do the math and see if it pays to do so or if you want to keep the normal option, in which the respective deduction applies to each category. Thus, to category A income deduction applies of 4,104 euros. No of category B can be this amount or the sum of the contributions for social protection schemes, if they exceed 4,104 euros.
Social Security: How does it work?
Accumulating dependent work and green receipts does not necessarily mean paying Social Security contributions twice.
Until 2019, those who were in these conditions were automatically exempt. But the rules have changed.
Now, the contribution exemption only applies if:
- Provide service to different entities;
- The amount you earn from dependent work exceeds 4 x IAS, that is, 1921.72 euros (in 2023, the IAS is 480.43 euros);
- The relevant average monthly income (ie 70% of the total) as a self-employed worker does not exceed 1921.72 euros.
If your income as a self-employed person exceeds 1921.72 euros, the contribution rate for Social Security is only levied on the amount that exceeds this amount. For example, if you earn 25000 euros, it only applies to 578.28 euros (2500 to 1921.72 euros).
What if you work for the same company?
There are cases in which the accumulation of dependent work and green receipts is done within the same company. In this case, you do not have to pay contribution as a self-employed person. This is because it fits in with workers under an accumulation regime, which has different rules.
Therefore, the same contribution rate applies as in the employment contract.
Article originally published in July 2019. Last updated in March 2023.
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