Self-employed professionals in paid employment

Is the income from your own company declining or inconsistent and you would like to earn some extra money? Paid employment can be an option. Can you do this alongside your freelance (zzp) work? This article explains what you need to be aware of.

As a freelancer, you can be flexible. You can combine self-employed and (part-time) paid employment work. The extra income from paid employment gives you some extra room so that you can continue to run your business. Look for a job with an employer who is not already one of your clients. Find out what choices are most beneficial for you.

Payroll tax and payroll tax credit

You will receive a salary from your employer and you will have to deal with payroll taxes and payroll tax credits. Before you start working for your new employer, you need to complete the Model Declaration of payroll tax data (in Dutch). You can choose to have your employer automatically deduct payroll tax from your additional earnings from employment. Payroll tax includes wage tax and national insurance contributions and is an advance on your income tax.

With a payroll tax credit, you have 2 choices: your employer will either apply the payroll tax credit to your salary or not. If you opt for the route through your employer, less wage tax and fewer national insurance contributions will be deducted. You will have more salary paid out that way. The payroll tax credit consists of a general tax credit and an employment tax credit. If you do not let your employer take care of the payroll tax credit, it will be settled with your income tax return. You will therefore always receive the tax credits to which you are entitled.

You only get a payroll tax credit with 1 employer at a time. Do you have multiple jobs at the same time next to your sole proprietorship? Then you only apply for the payroll tax credit from 1 employer.

Salary in your private account

Your income from your business is separate from your private income. Therefore, have your salary deposited into your private account and not into your business account. If you also use your private account for your company, open a separate account for your salary. This way you can easily separate the different cash flows.

Higher-income tax bracket

Does your total income from your company plus your income from employment exceed €75,518? Then you enter the higher income tax bracket of 49.50%. For income up to €75,518, the income tax rate is 36.97% (rates 2024, non-pensioners).

Hours criterion income tax

If you start working as an employee, you will probably have less time to devote to your own business. This can have consequences for the entrepreneur allowance. Therefore, determine whether you are still entitled to the entrepreneur's deduction. And if so, how many hours you can work as an employee without losing the right to entrepreneur allowance. 

You are entitled to an entrepreneur allowance if your income from your business is recognised as profit from the business. Entrepreneur allowance consists of private business ownership allowance and possibly tax relief for new companies. You must work at least 1,225 hours per calendar year in your own company. Have you been working as a self-employed person for longer than 5 years? Then you must spend more time on your business each year than on your paid work.

Small businesses scheme and turnover tax

In addition to income tax, you also have to deal with turnover tax, also known as value-added tax (VAT). Does your turnover remain below €20,000 per year? Then you can opt for the small businesses scheme (KOR). With the KOR you are exempt from VAT for 3 years and you are not allowed to reclaim VAT on purchases.

As long as your turnover remains below €20,000 per year, the KOR is applied 3 years in a row. This can be beneficial if, for example, you provide services to private individuals who cannot offset VAT. With the same selling price, your profit margin increases. Or you partly adjust your rate downwards, so that you and your customer benefit. 

Do you have many business customers? Under the KOR, you cannot reclaim VAT on purchases and business expenses. Your purchase price will be higher because you include VAT. If you want to keep the same profit margin, you have to increase the selling price without VAT. So then your product becomes more expensive and less interesting for your customer.

Will your turnover exceed €20,000? Then the KOR will end, and you will have to charge and then pay VAT again. Learn more about KOR or watch our KOR checklist video.

Agreements with your employer

Make agreements with your employer about your availability. This helps you avoid difficult situations. Do you work fixed days per week or can you determine your working hours yourself? And are you allowed to take a limited number of business calls, for example? Are your activities for your new employer an extension of the activities for your own company? In that case, make agreements with your employer about assignments that you may or may not accept for your own company. Include in the negotiation whether there will be a non-compete clause or a non-solicitation clause in your employment contract. Such a clause can limit your work as a self-employed professional. It can also provide clarity so that you know where you stand.

Help with reorientation

Not sure which job to look for? Then you can get help from a regional mobility team (RMT) to reorient towards paid employment. This help can consist of career advice, retraining, and practical learning. There are 35 RMTs spread throughout the Netherlands.

Self-employment next to paid employment

Is your situation the other way around: you are now in paid employment and you also want to work as a self-employed professional? That is possible. Discuss with your employer whether extra freelance work is allowed. Check whether you have signed a non-compete or non-solicitation clause. If so, pay close attention to what it says and adjust your work as a self-employed professional accordingly. Because of your extra income, you can end up with a higher income tax rate. Discover what part-time entrepreneurship means.