Self-employed as a secondary occupation: costs
As a secondary occupation, you incur more or less the same costs as if you were to start as a self-employed as a main occupation.
- Start-up costs
- Social security contributions
- Your equipment
- Additional insurances
- An accountant
If you start with a company, you will be faced with many more costs, but this is rather exceptional for a self-employed person as a secondary occupation.
Start-up costs as a secondary occupation
Most of the costs go towards setting up your business:
- Registration with the Crossroads Bank for Enterprises (CBE). This is done by the Enterprise Counter and costs €90.50 (no VAT applicable).
- VAT number activation is also done by the Enterprise Counter and costs €60 (excl. VAT).
Tip: In cities such as Bruges and Ghent, the city reimburses your registration with the CBE
If you start in a liberal profession, you don’t need a VAT number.
Social security contributions
As a self-employed person as a secondary occupation, you also pay social security contributions. However, these are considerably lower than when you start as a main occupation because you mainly contribute to social security via your employer or other main source of income.
You pay quarterly, i.e. four times a year. As you are not yet able to submit turnover figures in the first year, you pay a "flat-rate minimum contribution" of €81.76 per quarter.
Read more about social security contributions.
Of course, for some professions you need more equipment than for others and so you will have to buy this yourself. Read more about deductible professional expenses.
Some self-employed persons as a secondary occupation require extra insurances. If, for example, your business is located in a building, you will need to subscribe to fire insurance. Also, better play it safe when it comes to expensive machines. Your accountant can tell you in advance which insurances are a must for you.
Hiring an accountant is not mandatory. Much depends on the number of customers you have and on how complicated your invoicing process is. And perhaps also on how administratively organised you are. Reckon with a few hundred euros a year.
Accountants vary in price, so ask for different offers. Don’t just choose the cheapest accountant, but someone with whom you feel comfortable.
Deductible professional expenses for a secondary occupation
Sole proprietorships are the most common form of secondary occupation because they can be set up cheaply and quickly.
If this is also your case, or your preference, then the turnover of your additional earnings will be added to your income from your main occupation. This means that you will probably end up in the highest tax brackets of 45% or 50%.
It’s therefore important to incur expenses in carrying out your secondary occupation. Think about buying your equipment, but perhaps you could also charge for using an office in your home? That way, you will lower your profits and pay fewer taxes. However, it's important that you make a sufficient profit first, otherwise there is little point in deducting professional expenses.
VAT exemption for a secondary occupation
It’s not the case that you automatically don’t have to charge VAT in a secondary occupation. In theory, every self-employed person must charge or pay VAT.
The advantage of being self-employed is that you don’t actually pay VAT. Your customers pay VAT to you and you regularly pass that amount on to the VAT administration, whereby you can deduct the VAT that you yourself had to pay on purchases. This makes it a zero operation for you.
There is a good chance that you will be able to make use of the VAT exemption as a secondary occupation. This is allowed if your annual turnover is below €25,000. In that case, you can apply for a VAT exemption.
- You don’t have to charge your customers VAT. That saves you a lot of administrative work.
- You pay VAT on your own purchases because you cannot offset it.
- You must draw up and submit an annual list of your VAT liable customers (VAT list).
If you exceed the threshold of €25,000 in annual turnover, you lose the exemption and you must charge VAT. So don't lose sight of this.