Dilemmas, dilemmas. Should you follow your dreams and become self-employed in a secondary occupation? Or, in your situation, is it better to stay a full-time employee? We make the decision easier for you with these pros and cons of having your own business as a secondary occupation.
Your income from your main occupation and your earnings from your secondary occupation are added together and taxed. This means you could end up in a higher tax bracket and pay more taxes. However, you can try to limit this by generating and deducting enough professional expenses.
When you’re self-employed in a secondary occupation, you have the same obligations as someone who is self-employed in a primary occupation. This means that in most cases, you have to pay VAT and social contributions. The good news? If you earn less than €25,000 per year from your secondary occupation, you qualify for the VAT exemption scheme for small businesses.
Like all self-employed individuals, when you’re self-employed in a secondary occupation, you (usually) pay social contributions. However, you don't get any additional pension or other social rights in return. This is because you already acquire these through your job as an employee. What’s the benefit of paying social contributions? You can deduct them from your taxes, and in some cases, you're even exempt from them.
Pursuing your dreams in a secondary occupation requires extra time and energy. Losing balance can negatively affect your private life and your performance in your current job.
Entrepreneurs in a primary occupation can devote all their time to their business. When you’re self-employed in a secondary occupation, you don't have that luxury. Therefore, there's a higher chance you might have to refuse an assignment.
Starting a secondary occupation gives you the opportunity to start slowly and test a new business project. Since you work at least part-time in your primary occupation, the risk is minimal: you still have your monthly salary to fall back on. Also, you continue to benefit from your social rights as an employee. You're still guaranteed:
By becoming self-employed in a secondary occupation, you give yourself the chance to actively engage with your passions. Are you a teacher starting a handyman business on the side? Then you're guaranteed more variety and challenges in your life.
When you’re self-employed in a secondary occupation, you have the same obligations as someone in a primary occupation. However, there are often mechanisms that make your administration simpler. For example, in certain cases, you're entitled to a VAT exemption and/or exemption from social contributions.
Your secondary occupation gives you the chance to earn extra money on top of your current salary. Moreover, you can (partially) deduct the expenses you incur for your secondary occupation as business expenses. And these, in turn, mean you have to pay less tax.
The practical aspects of starting a secondary occupation don’t take much effort. Also, stopping your self-employed activity is easy. Whatever happens, you're always richer in experience.
Have you already made your decision and are about to start out as self-employed in a secondary occupation? Congratulations! Accountable is here to make your self-employed life as easy as possible. You can count on our app to easily process your admin, keep your costs and expenses clear, and prepare your tax and VAT declaration in a few clicks.
The good news is that there's no limit to how much you can earn in your secondary occupation. However, keep in mind that the more you earn, the more social contributions and taxes you will have to pay on your income. When you’re self-employed in a secondary occupation, your income from your primary occupation (as an employee) is combined with the income from your secondary, self-employed activity. This quickly puts you in the highest tax bracket (45-50%).
When you have a secondary, self-employed activity, you're taxed according to progressive tax brackets (25-50%). Note that your income when you’re self-employed in a secondary occupation is combined with the income from your main activity, which puts you in a higher tax bracket faster. In addition, when you’re self-employed in a secondary occupation, you also pay social contributions quarterly (20.5% of your income), with a minimum contribution of €98.52 in 2024.
You can work as many hours in your secondary occupation as you want; there's no limit. However, to become self-employed in a secondary occupation, you must still have at least a part-time main activity as an employee. Apart from that, you can work as much as you want.
It's not mandatory to have an accountant when you’re self-employed in a secondary occupation. However, you are required to maintain accurate accounts, i.e. keeping your invoices, receipts, and VAT administration neatly and correctly. An accountant can support you in this, but you can also take care of your accounting for your secondary occupation, for example, by using software like Accountable.
Author - Valesca Wilms
As content marketing lead at Accountable Belgium, Valesca writes about freelancing, self-employment, and taxes based on her own experience as a freelancer.
Who is Valesca ?Thank you for your feedback!
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