Working as an employee and on your own account at the same time is perfectly legal, increasingly common, and has a technical name: pluriactividad. It means being registered in two Social Security schemes at once, contributing to both and, under certain conditions, being entitled to get back part of what you over-contributed. It also means your income tax return looks different. This guide separates the two sides, which tend to get mixed up.
Pluriactividad is not pluriempleo
| Pluriactividad | Pluriempleo (several jobs) | |
|---|---|---|
| What it is | Registration in two different schemes: the general scheme for your salary and the RETA, the scheme for the self-employed, for your activity | Two or more jobs as an employee, all in the general scheme |
| Who contributes | Your employer for the salary, and you for the RETA | Each employer for its part |
| Refund of the excess | It exists, with its own rule | Works differently, with the ceiling shared out between employers |
The confusion is common and has consequences, because the refund rules are not the same. What follows deals with pluriactividad: a salary and self-employment at once.
You contribute twice, and that is not a system error
There is no automatic offset between schemes: your employer contributes for you in the general scheme and you contribute in the RETA on the base you chose within your bracket. They are two independent contributions, for two different activities, and neither excludes the other.
What there is, is a reasonable limit on the total: when the combined contributions for common contingencies in the two schemes exceed an amount set each year, a right arises to a refund of part of the excess, capped by reference to the contributions paid into the self-employed scheme. The annual amount and the percentages are in article 313 of the consolidated text of the General Social Security Act (the LGSS), and in the rule that updates them each year, which is why we do not publish the figure here: it changes.
The rules provide for the Tesorería, the Social Security treasury, to process it without the person concerned having to ask, in the first months of the following year. "Automatically" does not mean "infallibly": it is worth checking that it has arrived and, if not, claiming it. What you must not do is stop paying into the RETA on the assumption that part will be recovered: they are two different things and the obligation to contribute does not allow a unilateral offset.
The other effect: the self-employed contribution base
In pluriactividad the same earnings-based contribution system applies as for other self-employed people, with its brackets and later reconciliation, which we explain in contributions based on real earnings. What changes is that you already have cover through your job, and that alters the calculation of what suits you.
- You are already covered for many contingencies by the general scheme, so the marginal value of a high base in the RETA is different from what it is for someone who is only self-employed.
- Temporary incapacity benefit may come from one scheme or the other depending on where the situation arises, and there are specific rules.
- The maximum base for the whole is not a free sum of the two: that is where the refund mechanism comes in.
Choosing the base is a decision with long-term effects and we do not make personal financial planning recommendations: what we do is explain both effects and let the decision be taken with the numbers in front of you.
The tax side: two kinds of income in the same return
For IRPF, Spanish personal income tax, there are not two returns: there is one, with two kinds of income. The employment income from your salary and the business income from your invoicing are added together in the general base and taxed on the same scale.
| Item | From the salary | From the activity |
|---|---|---|
| How it is declared | Employment income | Income from an economic activity |
| Expenses | Those set out in the IRPF Act | The deductible expenses of the activity |
| Advance payments | Withholding from the salary | Withholding on your invoices and, where applicable, Modelo 130 |
| Social Security contributions | Those on your payslip reduce employment income | RETA contributions are an expense of the activity |
On the quarterly payment on account, only the withholding suffered on the activity's income is deducted. The withholding on your salary is subtracted in the annual return, together with everything else. Subtracting it on the 130 is a common mistake and produces a lower payment than was due, which surfaces later.
The obligation to file: the second-payer threshold
Someone with a salary and an activity has, by definition, more than one payer, and that moves the threshold that obliges you to file an income tax return. When employment income is received from more than one payer, the limit requiring a return drops to €15,876 if the amounts received from the second and later payers exceed the figure set by law.
And, regardless of that threshold, anyone with income from economic activities is obliged to file for that reason alone, on the terms set by article 96 of the IRPF Act. In practical terms: if you invoice, plan on filing a return.
What is notified, and to whom
- To Social Security: the registration in the RETA, stating that there is pluriactividad. It is part of the registration itself and it is what allows the refund mechanism to work.
- To the tax office: the census registration on Modelo 036 with your activity heading, like any self-employed person. The route is in registering step by step.
- To your employer: nothing, unless your contract or collective agreement contains an exclusivity or non-compete clause. That is an employment law matter, and it is worth reading the contract before you start.
That third point deserves a warning: we are not employment lawyers and we do not assume that any side activity is compatible with any contract. If there is a full-time dedication clause, an exclusivity clause or a non-compete clause, the matter is not a tax one and it needs looking at beforehand, not afterwards.
The case of someone who invoices their own employer
This deserves its own section because it is the one that causes the most trouble. An employee who, besides their salary, issues invoices to the same company for "different" work is in a delicate position: what decides whether a relationship is employment or self-employment is not the document issued, but the features of dependence and working on someone else's account with which the service is provided. If the work is done in the same hours, with the same resources and under the same instructions, invoicing it does not turn it into self-employed activity.
The consequences of a reclassification are not only tax ones: they reach contributions, the withholding that should have been applied and, where relevant, the contract itself. It is an area in which we do not offer views in advance: we warn of the risk and recommend reviewing how the work really operates before setting up the arrangement, not after someone else looks at it. When the self-employed activity is provided to clients other than the employer, with your own resources and at your own risk, the situation is completely different and much easier to support.
Situations that change the approach
| Situation | What needs reviewing |
|---|---|
| You are going to invoice your own employer | It is the scenario with the highest risk of reclassification. The line between employment and self-employment is not set by the invoice |
| Your job is part-time and the activity is growing | Review the earnings forecast and the bracket, because the balance has shifted |
| You are coming from unemployment benefit | The compatibility rules are different: the three routes |
| Your activity has clients abroad | On top of the RETA, the VAT place-of-supply rules come in: where each service is taxed |
When the job ends and the activity carries on
Pluriactividad is hardly ever a permanent state: either the activity grows and the job is left, or the other way round. Both endings involve paperwork, and neither is automatic.
- If the job ends, you stop contributing to the general scheme and remain in the RETA. It is worth reviewing the earnings forecast straight away, because the activity will weigh more and the bracket changes. And you need to check whether any refund applies for the period in which the two overlapped.
- If the activity closes, you have to deregister at both offices: removal from the RETA and census deregistration on Modelo 036. Stopping invoicing is not deregistering, and an open census entry keeps expecting quarterly returns for years.
The classic mistake in the second case is to deregister with Social Security and forget the tax office, or the reverse. They are independent administrations and neither tells the other of your decision: the two deregistrations are processed separately, and whichever is missing will keep generating obligations.
The short list
- Registration in the RETA declaring pluriactividad, and census registration on the 036.
- A single income tax return, with two kinds of income inside it.
- Salary withholding kept off Modelo 130.
- Check every year that the refund of excess contributions has arrived.
- Read your employment contract before you start.
We handle the tax and accounting side for people combining the two, which is where the effects intersect and where mistakes are made. If you would like us to review your case before registering or before the next income tax return, write to us through the self-employed registration form; the general approach is on registering as self-employed. We do not guarantee that a particular refund is due to you: that is checked against your bases, not promised.