Self-employed alongside salaried employment
If you want to become self-employed alongside your permanent job, you benefit from the best of both worlds. You keep your salary and employee rights, while at the same time you can try out how entrepreneurship works in practice. It does require good planning and clear agreements so that you avoid getting caught up with time or obligations. Below, we list the advantages and disadvantages for you.
Advantages and disadvantages
Being self-employed alongside salaried employment has attractive advantages, but also some distinct disadvantages. This overview will help you see both sides quickly.
Advantages | Cons |
Financial security | Busy schedule |
Freedom and growth | Additional administration |
Employee benefits | Fewer tax breaks |
Experience and network | Bringing employers along |
Agreements with employer
First, check whether your employment contract contains a prohibition on other work or a non-compete clause. Then discuss your plans openly with your employer and emphasise that your work will not suffer and will not constitute competition. An employer may prohibit a side job only with a good reason, but you must report it. Put agreements in writing, for example about permission or working hours. With clear communication, combining is usually not a problem.
Tax issues self-employed and salaried
Your wages and business profits are taxed together in Box 1 of income tax. So you pay tax on your total income at the normal rates - not double. However, as an entrepreneur, you will have to take care of additional matters yourself. Think about filing your VAT return and setting money aside for tax, so you will not be faced with any surprises at the end of the year.
VAT return (sales tax)
As an entrepreneur, you need to make quarterly VAT return do and charge VAT on your invoices. Even if you have no turnover that quarter, you still have to file a return (zero). Don't forget this, as filing late can result in a fine. Make a note of the deadlines in your diary.
Small business scheme (KOR)
Does your turnover remain below €20,000 per year? Then you can opt for the small entrepreneur scheme (KOR). Je do not then have to charge or remit VAT and you do not have to file VAT returns. That saves on administration.
Income Tax
On your wages, your employer pays wage tax. On the profit from your business, you pay income tax return via the annual tax return. Your wages and profits will be added up, so your total income may fall into a higher tax bracket. Therefore, immediately set aside a part of your self-employment income (e.g. 30% from each invoice) for the tax payable, so that you don't end up tight later.
Income tax calculation
Use our calculation tool right away to see how much income tax you have to pay. Enter your salary and profit and you will immediately see your total tax, including deductions and tax credits. This way you will know how much you need to set aside and avoid surprises.
Deductions
If you spend at least 1,225 hours a year on your business, you are entitled to additional deductions. You can then use the self-employed deduction (and as a starter also the start-up deduction, which amounts to a big cut in your taxable profits. In addition, for all entrepreneurs, the SME profit exemption applies, keeping 12.7% of your profit tax-free.
Insurance and pensions
In salaried employment, you are insured for disability and build up a pension; as a self-employed person, you have to arrange this yourself. Consider an disability insurance for income coverage in case of illness and a business liability insurance. Also make sure you take care of your own pension save, because you will get AOW later but a supplementary pension you have to build up on your own.
Roadmap: starting as self-employed alongside your job
In the step-by-step plan below, you can read in 6 clear steps what you need to arrange, from your registration with the Chamber of Commerce to keeping track of your hours.
Step 1 - Check your employment contract
Check your contract for a side-work or competition clause and always ask your employer's permission beforehand.
Step 2 - Register with the Chamber of Commerce
Sign up at the Chamber of Commerce (usually as a sole trader) and get a Chamber of Commerce number and VAT identification.
Step 3 - Organise your administration
Keep your records in order from day one (separate business account, use accounting software, keep receipts).
Step 4 - Arrange tax matters
Do your quarterly VAT return and prepare for income tax (set aside money for this).
Step 5 - Make a time schedule
Schedule set times for your zzp work and clearly communicate your availability; also guard your own rest.
Step 6 - Keep track of your hours
Keep a record of hours - jot down all direct and indirect hours - so you can prove that you reach 1,225 hours for deductions.
Common mistakes and misunderstandings
When starting your own business, some mistakes are often made. These are the most common ones:
- Employer not informed: Starting a business without informing your employer can lead to problems or dismissal. Be honest and avoid hassles.
- Tax underestimate: Not all your additional earnings will go to the Tax Office, but you will have to pay tax on your earnings yourself. So reserve enough for the assessment.
- Double use of wage tax credit: Apply the payroll tax credit to only one employer (usually your salaried employer). If you do it twice, a retroactive tax will follow later.
- No insurance or pension arrangements: Without an AOV or buffer, you are at risk in case of illness, and not building up a pension can be quite disappointing later on.
Frequently Asked Questions
Does my employer allow me to do zzp work?
Yes, usually yes, provided you report it and ask permission. Check your contract for a ban and discuss it, without a good reason your employer cannot refuse it.
What if I don't make enough hours?
Then you miss out on certain tax benefits (such as the self-employed deduction) and pay slightly more tax on your profits. However, you can just do business part-time, there is no minimum number hours required.
Do I need to take out separate insurance if I become self-employed?
Not compulsory, but wise. For your salaried part, you are insured through your employer, but not for your self-employed work. So consider disability insurance and business liability insurance for your self-employed work.
How do I efficiently combine self-employment and salaried employment?
With good planning and communication. Plan your self-employed hours well, let employer and clients know when you are available, and guard your limits. That way, the combination is perfectly manageable.
Can I apply wage tax credits to my self-employed income?
No, you can only use it on one income (usually on your wages). Your self-employed income is gross and the rebate is settled via tax afterwards. So don't double-tap the wage tax credit.
