How much should a self-employed person charge to earn 1,000 euros a month?
Posted: Wed Dec 18, 2024 6:07 am
Being self-employed is often more about self-employment than being an entrepreneur. In many cases, after many hours of work, the goal is to make ends meet with a decent salary.
Please note that invoicing does not mean making a profit, much less liquidity. VAT, personal income tax, social security and other expenses must be deducted from the invoicing.
We explain with two practical examples how and how much you should invoice as a self-employed person to earn €1,000 per month.
When considering czechia email list whether or not the number of hours we dedicate as self-employed workers to our activity is profitable , it is very important to be clear about what profit we obtain monthly. This may seem simple, but for many members of the group, it is not so simple.
Download your FREE copy of the “Business Survival Kit for SMEs”
Most self-employed people know how much they earn and what their expenses are. However, they are not always completely clear about how much profit they have made (or what their ideal turnover should be as a self-employed person).
Concepts such as VAT, personal income tax , social security or expenses associated with the business can greatly change the amount needed to invoice to earn €1,000 per month.
Let's take the case of a professional who is in charge of creating websites for companies. In this case, to do his job, he doesn't have to make any purchases, that is, he doesn't need to buy any material in most cases. Therefore, to obtain those 1,000 euros per month, we will take into account the following:
Billing of 2,500 euros per month (VAT included) without deducting the payment on account of personal income tax. From this amount you have to subtract taxes, expenses and the self-employed fee. It seems like a very high amount, but in reality it is not that high.
Social Security contribution . In this case, estimating a net income of between €900.01 and €1,166.69, the self-employed contribution, according to the new calculation based on real income , already in force, has an associated contribution range of between €280.39 and €364.01. Let's suppose that you pay the lower of these contributions.
IRPF . Let's also assume that we pay 15%. In this case, we would have to consider personal circumstances and whether the Treasury refunds us at the end of the year or not. To simplify matters, we will assume that this amount would be 375 euros.
VAT . This is the amount charged to the customer on invoices and must be settled quarterly . In this case, we are going to subtract approximately €433.88 of VAT.
Rental costs, coworking , etc., since the professional needs a place to work. Let's assume that he does not work at home, but in a coworking space that costs him 300 euros per month.
Telephone costs , because this is the means by which you communicate with your clients. Let's assume that it amounts to about 50 euros per month.
Miscellaneous expenses, which could include a taxi, a meal out, a plane ticket, etc., which we would quantify at 60 euros per month.
What expenses are deductible?
Most expenses, as they relate to economic activity, would be deductible in personal income tax. However, as the declaration has to be made annually, we do not consider them for the month to month. The same could be said of VAT , since the VAT incurred could be deducted in the quarterly declarations in the proportional part of the rent, telephone, etc.
The end result would be that by billing 2,500 euros per month, a web designer would make 1,000.73 euros in profit . If he were to use the flat rate or work from home, he would need to bill less.
Case of an electrician: What would be his billing as a self-employed person?
In the case of an electrician, the situation is quite different. This is because, in addition to carrying out his work, he needs to buy materials, travel regularly to the client's home, etc. In other words, his expenses increase considerably, so his billing must also increase in the same proportion.
Please note that invoicing does not mean making a profit, much less liquidity. VAT, personal income tax, social security and other expenses must be deducted from the invoicing.
We explain with two practical examples how and how much you should invoice as a self-employed person to earn €1,000 per month.
When considering czechia email list whether or not the number of hours we dedicate as self-employed workers to our activity is profitable , it is very important to be clear about what profit we obtain monthly. This may seem simple, but for many members of the group, it is not so simple.
Download your FREE copy of the “Business Survival Kit for SMEs”
Most self-employed people know how much they earn and what their expenses are. However, they are not always completely clear about how much profit they have made (or what their ideal turnover should be as a self-employed person).
Concepts such as VAT, personal income tax , social security or expenses associated with the business can greatly change the amount needed to invoice to earn €1,000 per month.
Let's take the case of a professional who is in charge of creating websites for companies. In this case, to do his job, he doesn't have to make any purchases, that is, he doesn't need to buy any material in most cases. Therefore, to obtain those 1,000 euros per month, we will take into account the following:
Billing of 2,500 euros per month (VAT included) without deducting the payment on account of personal income tax. From this amount you have to subtract taxes, expenses and the self-employed fee. It seems like a very high amount, but in reality it is not that high.
Social Security contribution . In this case, estimating a net income of between €900.01 and €1,166.69, the self-employed contribution, according to the new calculation based on real income , already in force, has an associated contribution range of between €280.39 and €364.01. Let's suppose that you pay the lower of these contributions.
IRPF . Let's also assume that we pay 15%. In this case, we would have to consider personal circumstances and whether the Treasury refunds us at the end of the year or not. To simplify matters, we will assume that this amount would be 375 euros.
VAT . This is the amount charged to the customer on invoices and must be settled quarterly . In this case, we are going to subtract approximately €433.88 of VAT.
Rental costs, coworking , etc., since the professional needs a place to work. Let's assume that he does not work at home, but in a coworking space that costs him 300 euros per month.
Telephone costs , because this is the means by which you communicate with your clients. Let's assume that it amounts to about 50 euros per month.
Miscellaneous expenses, which could include a taxi, a meal out, a plane ticket, etc., which we would quantify at 60 euros per month.
What expenses are deductible?
Most expenses, as they relate to economic activity, would be deductible in personal income tax. However, as the declaration has to be made annually, we do not consider them for the month to month. The same could be said of VAT , since the VAT incurred could be deducted in the quarterly declarations in the proportional part of the rent, telephone, etc.
The end result would be that by billing 2,500 euros per month, a web designer would make 1,000.73 euros in profit . If he were to use the flat rate or work from home, he would need to bill less.
Case of an electrician: What would be his billing as a self-employed person?
In the case of an electrician, the situation is quite different. This is because, in addition to carrying out his work, he needs to buy materials, travel regularly to the client's home, etc. In other words, his expenses increase considerably, so his billing must also increase in the same proportion.