Starting out as self-employed in secondary occupation is exciting, but do you also dwell on the potential drawbacks? At Dexxter, we want you to be successful and well-informed. In this blog post, we discuss some of the disadvantages self-employed in secondary occupation may encounter and how you can deal with them.
1️⃣ No (additional) social rights
It is important to understand that the social security contributions you pay as a self-employed in secondary occupation are often considered solidarity contributions. This means you cannot claim additional social rights such as family benefits, pension accrual, or bankruptcy insurance. It is important to consider alternative ways of social security, such as private insurance.
Further, you are also responsible for your own administration such as tax returns, tracking income and expenses, and compliance with legal requirements. Fortunately, these accounting obligations are okay if you use Dexxter ‘s accounting platform!
2️⃣ Heavier (higher) taxes
Another important thing to keep in mind is that the income from your side business comes on top of your other income, and this can create a higher tax burden. This is why it is important to inform yourself about the calculations of social security contributions for self-employed in secondary occupation. If you use Dexxter, this calculation happens automatically!
Does it seem like you are going to have to pay a lot of taxes? If yes, as a self-employed in secondary occupation, you are entitled to deduct certain costs so that you can reduce your net taxable income. Think of office equipment, travel expenses and professional training that you can bring in to reduce amount of taxes. Identify which costs apply to you and take into account here through this list of deductible expenses!
3️⃣Balans between self-employment and employer
Some employers may impose restrictions on employees regarding self-employment in secondary occupation. It is important to check the conditions and rules of employment from the main employer to avoid conflicts.
4️⃣Balans between work and private life
Being self-employed in secondary occupation can require a lot of time and effort. It is important to maintain a healthy balance between your self-employed activities, your main occupation as an employee or civil servant, and your private life. In fact, as a self-employed in secondary occupation, you state the challenge of balancing your passion and entrepreneurship with your existing job. Definitely something to think about! 🧠
5️⃣Administratieve obligations
An important aspect from this entrepreneurial journey is thoughtful and efficient accounting. We would like to give you some tips:
Accounting tips for self-employed in secondary occupation:
- Open a separate professional bank account to separate your professional income and expenses from your personal finances.
- Keep your accounts for at least 3 years. For example, sales invoices, purchase invoices and vAT declarations are essential for tax audits. Consider digital tools to scan and organise receipts such as Dexxter!
A thoughtful approach to your accounting as a self-employed in secondary occupation is the basis for financial success and peace of mind. With the right tools and knowledge, you can grow your business while keeping your finances under good control. Dexxter stands ready to support you on this accounting journey! Still doubting whether Dexxter is for you? Then be sure to view these 5 reasons to start using Dexxter for sole proprietors & accountants in 2024!
