What is it and who is it for?
When you are self-employment as a secondary activity, you can simply send an invoice to the organisation after your work, lesson or performance is done. However you are the one who has to sort out the paperwork, tax and social security.
You can be self-employed as a secondary activity if you work at least half time (19 hours a week) as an employee or civil servant. If you work in education and have a permanent contract, you need to work at least 60% of a full-time teaching schedule. Often you also need permission from your employer: this is the case if you are a civil servant, for example.
Do you get unemployment benefits? Contact the Social Security Office (RVA). There are certain strict systems and programmes that allow you to have a secondary activity anyway. We advise you to gain all the information you can before you start.
Payment, limits and maximums
As a person who is self-employed as a secondary activity, there is no limit on how much you earn. You can even earn more from your secondary activity than your main activity. However you will pay taxes and social security contributions on this income.
There are only certain, specific situations where there is a limit to what you can earn, for example if you combine your activity with an invalidity benefit, pension, unemployment benefit or certain positions in the civil service.
You can set your own price per hour, per day or per assignment. When setting your price, you need to take into account:
- the amount you want to earn
- your variable costs: how much time will it require? What travel costs will I have?
- your fixed costs: social security contributions, taxes, accountant, insurance, car etc.
- the usual rates charged by people who do similar assignments
Paperwork and obligations
To get started as a self-employed person (as a secondary activity), you need to:
- open a separate bank account,
- join a social security fund of your choice. These funds collect the social security contributions for self-employed people and companies and pay them on to the government (see this list of all social security funds),
- go to your local enterprise office and get your secondary activity registered in the KBO (Crossroads Bank for Enterprises) and obtain a business registration number,
- activate your VAT number and/or request a VAT exemption (see below) at the VAT inspection office in your region,
- join a health insurance fund or inform your existing health insurance fund that you will be self-employed as a secondary activity from now on.
It is not obligatory to have an accountant, but it is a good idea. They will help you with your paperwork, tax returns and VAT returns. Be sure to store all your paperwork and administration carefully.
If you work internationally and sometimes send invoices to international clients who are subject to VAT, you will need to file an EC Sales List each year.
If you are subject to VAT yourself (see below), you also need to file VAT returns.
You are your own boss for any work you do within your self-employed secondary activity. You are not subordinate to the organisation you are working for, so it is not responsible for you and you are not covered by its insurance. That means you have to sort out your own insurance.
Danspunt strongly advises you to get professional liability insurance. It covers any damage you may inadvertently cause to a client. You can also take out third-party insurance. That covers damage you cause to a third party (not your client). Hospitalisation insurance is also recommended.
Combinations with other payments and statuses?
As is the case with most other employment statuses: you are not allowed to combine or alternate different forms of payment for the same task done for the same organiser.
If you are or become unemployed, you can still have a secondary activity under certain conditions. It is best to contact the Social Security Office (RVA) about this. You can find out more on the website of the Cultuurloket.
What if you have a long-term illness and receive invalidity benefits because you can no longer do your main job? Or you take maternity leave? Your self-employed status as a secondary activity will probably affect the amount of benefits you receive. Contact your health insurance fund for more information.
People who are self-employed as a secondary activity also have to pay social security contributions. Your social security contributions are calculated on your net taxable income from your secondary activity (the profit you make, in other words).
You are already building up social security rights (to a pension, sickness benefit, unemployment benefit, child benefit, holiday pay) through your main job. The social security contributions you have to pay because of your secondary activity are merely what are referred to as ‘solidarity contributions’.
If you only work part-time in your main job, you need to realise that this means you are only building up part-time social security rights. That will affect your pension, right to unemployment benefits etc. If you would rather not take the risk and be better protected, you can opt to pay social security contributions on your secondary income as if you were self-employed as your main activity. That means that you pay more, but you also build up more social security rights.
The tax authority tells your social security fund what your net annual earnings are. They only do so once your tax return for that year has been filled in and processed, i.e. one or two years later. The social security fund determines the level of social security contributions you have to pay based on that amount.
Because you only find out two years later what you owe, the social security fund will ask for an advance payment of your social security contributions every quarter. If you know that your turnover is going to be very high or very low in a given year, you can also increase or reduce that advance payment. About two years later, your social security fund will send the final bill for your social security contributions, in proportion to your profits.
To estimate the exact amounts, it is best to make an appointment with the social security fund.
You pay income tax on your self-employed secondary activity as well as on your main activity as an employee. You declare your tax on your annual tax return. The tax authority adds your income from your self-employed secondary activity to your income from your main job.
The income tax rates are progressive and go from 25% for the first tax bracket up to 50% for the highest. If you earn a lot from your secondary activity, this might put you in a high tax bracket.
As a self-employed person with a secondary activity, you can deduct your ‘professional expenses’. These are all the expenses related to your secondary activity, such as your accountant’s fee, the costs of your phone, internet, computer etc. Some costs need to be spread over several years. The accountant can help you with this. Your expenses are deducted from the income from your secondary activity, which means that you effectively only pay income tax on your profits. Of course you do need to keep proof of all your expenses and any invoices and be able to justify them.
To avoid tax increases, it is best to make an advance payment to the tax authority every three months.
In theory everyone with a self-employed secondary activity is subject to the VAT rules. That means that you are obliged to activate your business registration number with the VAT authority as a VAT number (see above, under ‘Paperwork and obligations’).
If your annual turnover is lower than 25,000 euros, you are ‘exempt’ from VAT and do not need to keep VAT records. You need to apply for this exemption at the tax office. You also have to state “Business subject to the special exemption scheme for small businesses” on all your invoices (in Dutch: “Onderneming onderworpen aan de bijzondere vrijstellingsregeling kleine ondernemingen” and in French: “Régime particulier de franchise des petites entreprises”).
If you are subject to VAT, however, this means that:
- you need to charge your clients VAT, on top of your own fee, on your invoices (usually at the rate of 6% or 21%), and pay it on to the tax authority,
- you can ‘claim back’ the VAT on purchases you make for your secondary activity,
- you need to submit VAT returns and customer lists punctually to the VAT authority.
If you are subject to VAT, there is more paperwork involved. This means it is definitely a good idea to have an accountant.
Being subject to VAT also means you are more expensive for your clients, since you have to add VAT to your invoices. Unless they are also subject to VAT: in that case they can claim back the VAT on your invoices.
Do you need more information or advice?
- Information by the Cultuurloket
- Brochure about self-employment as a secondary activity by the Federal Service for Social Security and Self-Employed Businesspeople