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Student and entrepreneur? Here is the right status for you!

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Are you ready to launch your own venture and you are still studying? Are you a Deliveroo rider and at the same time a student? You generate some income next to your studies? First of all, congrats!

Secondly, here is good news for you: student self-employed status could be a perfect match for you… 

As a student-self employed, you can:  

✅ Deduct your professional expenses

✅ Start paying social contributions only once you generate 6 923 € of yearly revenue and above. 

✅ Start paying taxes only once you generate 6 923 € of yearly revenue and above. 

✅ Stay entitled to family allowances up to 13 847 € of revenues generated

Interested? Check below whether opting for that status might be the right option for you.

 

👩‍🎓 Is this status tailored for you? 👨‍🎓

The student and self-employed status is open to anyone who meets these conditions:

  • Age between 18 and 25 years
  • Student for at least 17 hours a week or 27 credits over the academic year
  • Student in Belgium or abroad in order to obtain a diploma that is recognized in Belgium.

If you match all these 3 criteria, the student and self-employed status is open to you. 

To become student and self-employed, you need to follow specific steps, same as any freelancer.

You will become affiliated to a social insurance fund, obtain your enterprise number, and your VAT number if you want one. From day one, you’ll need to adopt new habits: you’ll collect your receipts, send invoices to clients, pay the right amount of social contributions. We also recommend you to open a bank account specifically dedicated to your activities as a freelancer. 

Does that seem like a lot? Yes, because it is. That is also why Accountable allows you to do it all in a couple of swipes. We provide you in the app with your enterprise number (and VAT number if you ask for one). We also register you near the social insurance funds. Xerius is our partner to that aim. In a couple of days, you are all set and ready to start. 

Note that the cost of registration at the Crossroad Bank of Enterprises, through which you obtain your enterprise number,  is 88.5€ in 2019. 

Aurélien is student and self-employed since February 2019: “What I like about this status is that you can experiment what is to be self-employed without the risks and constraints of ordinary self-employed”.

 

6923.69 € of yearly revenue: this is the threshold you need to manage 🛑

As a self-employed, your yearly revenue includes all of the revenue that you generate through your business. You send invoices to your clients up to an amount of 20000€ over one year. You use part of that amount to invest in your business. Let’s assume that you are a professional photographer, you buy an excellent camera. That expense is considered as a professional expense. If you can prove it (e.g. with a receipt), you can deduct it from your tax base. The lower your tax base is, the fewer taxes you pay.  

Professional expenses include social contributions. 

Is your yearly revenue under 6923.69€? As a student and self-employed, you do not pay social contributions.

Is your yearly revenue between 6923.69€ and 13 847.39€? You pay social contributions amounting to 20,5% of your revenue above 6923.69€ and under 13 847.39€.

Is your yearly revenue above 13 847.39€? Welcome to real life. You have to pay social contributions amounting to 20,5% of your entire revenue. Same as any self-employed.

When starting, it is not easy to estimate future revenues. As a student and self-employed, you have to pay provisional social contributions amounting to 78.51€ per quarter. If you can prove that your revenues will not exceed 6923.69€, you can ask an exemption to your social security fund. 

 

Does this status impact your parents’ finances? 💶

If your revenue exceeds 13 847€ a year, you pay social contributions just like a full-time self-employed. You become entitled to the same rights as a full-time self-employed. 

If your revenue remains under 13 847€ and that you do not pay social contributions, your parents and yourself maintain your rights to child allowances. 

You also remain entitled to family allowances if you pay reduced social contributions and swear that you work less than 240 hours a quarter.

You remain under your parents’ responsibility for healthcare reimbursements, under 6923.69€ of yearly revenue.

Your time as a student and self-employed counts towards your rights for work incapacity, invalidity, and motherhood, if you become full-time self-employed right after being student and self-employed.

 

Taxes? Not too many 👌

This is the best part of that status: a student and self-employed is exempted from taxes on the first part of his/her revenue. That first part of your earnings from 2019 (to be taxed in 2020) amounts to 8860€, free of taxes.

To sum it up: as a student and self-employed, you take very limited risks. Your social rights will not be impacted, not until you reach a certain threshold of revenues. You are able to remain entitled to family allowances. You are largely exempted from taxes. In short, you are in the best position to test your project and/or make some money while learning as a student.

If you are up for a (very) full-time life, there is a whole  structure ready to help you.

 

You are not on your own 👣

Universities and higher educational establishments are also ready to support their most entrepreneurial students. Some of them set up specific structures to that aim: Durf Ondernemen (UGent), Centrum voor Ondernemen (HoGent), Pôle de Namur, Start Lab (ULB), Peps Entrepreneurs (UCL), ARTEpreneur, ideafactory (Arteveldehogeschool).

In 2017, the first year of that status, more than 5000 students gave it a try. Will you join them?

 

Hassan Ayed, Certified Accountant & Mindful Tax Adviser

A word about the author

Hassan Ayed, Certified Accountant & Mindful Tax Adviser

Hassan is Chartered Accountant. Ex-PWC, he built his own multi-million fiduciary from the ground up.
When Hassan is not running numbers, doing tax optimizations or digitizing accounting processes, he loves to run around and play with his 2 kids

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