Process of how to hire a family member, if you are SELF-Employed

When a freelancer needs personnel and decides to hire a family member, the simplest and most profitable way is the legal form of the collaborating freelancer.

What is a freelance collaborator?

Is an immediate family member who is economically dependent on and employed by the self-employed owner. This rate applies in cases where a self-employed person hires his/her family member to work in the business. In addition, the collaborating freelancer cannot work as an employee at the same time, but is an exclusive employee of the family freelancer who hires him/her.

Requirements of the self-employed collaborator

  • Must have a blood relationship up to the second degree.
  • Over 16 years of age and must be financially dependent on the business owner.
  • In addition to being the exclusive job, you cannot contract for something punctual or sporadic, but it will be the main activity that occupies you.
  • When a couple works together and marries, the figure of a self-employed collaborator becomes mandatory.

Tax benefits and advantages of a collaborating freelancer

The quota will be reduced by 50% during the first 18 months (153 euros). For the following six months, the reduction will be 25% (312 euros).

In the last Law of Urgent Reforms of Self-Employment, a new 100% bonus on the contribution for common contingencies was introduced for one year, provided that the hiring is indefinite.

The self-employed collaborator is exempt from quarterly tax obligations. This means that neither quarterly VAT nor quarterly personal income tax (IRPF) has to be filed.

To access the so-called “self-employed unemployment” (cessation of activity), you must spend twelve months contributing as a self-employed collaborator.

In order to be eligible for these bonuses and subsidies, it is essential that the collaborating self-employed person has not been registered in the RETA in the last five years.

How to register a freelance collaborator

  • You only have to register with the RETA and not with the tax authorities.
  • Form TA0521/2 must be submitted to the Social Security as a collaborating family member of the farm owner.

It must be accompanied by the following documentation:

The family book, municipal census, ID card and a copy of the self-employed person’s registration with the tax authorities.

Activity integrated in the project “Entrepreneurship and Integration” financed by the Ministry, Social Security and Migration.