Getting poorer...

Hello all,

First of all, sorry for not having introduced myself in the corresponding thread, it seems to be closed.

Now I introduce myself, from Spain, 43 yo, PhD in physics in UK, +11 years working experience, in UK, Spain, Netherlands and Belgium, always in top companies or world class R&D centres. Now working on a reputed high tech institute in Belgium, as a freelance. Let me describe my situation:

Gross salary: 42 euro/hour, but, I have to discount 550 pm agency fee, 13600 per year for social security, 35000 per year for tax, I don't get paid if I take holidays (or bank holidays), I don't get paid if I'm sick. If I have illness doctor tells me to go to my country as treatments are very expensive (note: I pay 70 euro per month for health insurance in Belgium). No other benefits at all from company, apart from 1 machine coffee per day.

Given the above circumstances, my total net salary per year is 32000 euro. My previous positions almost doubled it, I earned more during my last postdoc at university in Holland. My colleagues, all of them working directly and on permanent basis, get 3400 net per month in 14 payments (if I divide my 32k by 14  is 2285 per month), apart for a number of benefits I don't even smell...

Question: is this normal or I'm just making a plain fool of myself?

Really thanks in advance if you could provide the slightest enlightenment!

Regards

Hi,

I do not know on what basis your partnership was discussed as a freelancer. But you got scammed ...

phipiemar :

Hi,

I do not know on what basis your partnership was discussed as a freelancer. But you got scammed ...

Thanks for your reply. I was offered a contract through agancy, it was net around 2700 per month, or freelance (same agency), which was higher, I took freelance as the estimation for freelance was right (for first year), I was never told if I renew, and once tax office knos my real income (after first year tax declaration), social security would increase around 1k per month. That is my complain.

My accountant says everything is right for taxes, so why you say I got scammed? Can you ellaborate?

Thanks again in advance.

Regards

Hi, your Tax of 35000 looks to be very very high. A typical retention from gross to net might be 0.55. But yours looks closer to 0.36!?

Are you sure that net amount is right? If I've understood you correctly, it would mean that to achieve that gross, it means you worked, for the full year, with no holidays or even national holidays... because: (32000+35000+13600+(550*12)) / 42 / 8 = 259.5 days (I didn't include health insurance contribution).

The social security is about right if you have opted to pay the maximum to avoid surprises, but I would expect you to receive a significant rebate on that amount.

So doing a very crude calculation with a retention of 53%, you might expect:
42 (eur per hour) * 8 (hours per day) * 220 (days per year)
= 73920 gross excluding VAT
= 39177 net (which might even be a conservation estimate).
= 19219 for individual tax (on a ratio of 0.26 depending on personal circumstance and deductibles)
= 15523 for social security

(disclaimer: I'm NOT an accountant).

Hi,

Why I said you were scammed, it's simple. Your agency did not use any of the tricks allowed by the European Union. They were content to consider yourself as a freelance under Belgian status ...

Two simple working hypotheses:
"You would have opened a limited company in England." They would only have to do business with you. And your taxation, since you stayed more than 6 months outside the United Kingdom, could go down around 12% ...
- You would have opened a company in Latvia with you as manager of the company. Taxation fell to 10% and you were officially paying the minimum wage of +/- 300 € ...

So in conclusion, we must take advantage of what the European Union proposes. And not to look at the EU as a mistake of nature ...

DrewTheBear :

Hi,

Hi Drew and thanks a lot for your time!

Well, Finally I get around a little bit more than 2000 per month because if the company pays me gross, I have to discount tax, social security, but also health insurance and 550 euro that the accounting company gets from my gross on management fee, and this is 550 euro per month, may be now it makes sense...

Thanks again!!

Best Regards

phipiemar :

Hi,

Why I said you were scammed, it's simple. Your agency did not use any of the tricks allowed by the European Union. They were content to consider yourself as a freelance under Belgian status ...

Two simple working hypotheses:
"You would have opened a limited company in England." They would only have to do business with you. And your taxation, since you stayed more than 6 months outside the United Kingdom, could go down around 12% ...
- You would have opened a company in Latvia with you as manager of the company. Taxation fell to 10% and you were officially paying the minimum wage of +/- 300 € ...

So in conclusion, we must take advantage of what the European Union proposes. And not to look at the EU as a mistake of nature ...

Hi phiphiemar! Thanks for your answer.

What tricks? I mean, I'm from Spain, and I moved from Holland to Belgium in 2015, where I had to create my company in Belgium (with my own BTW number) in order to start that job. The only thing I do is send the invoices to my accountant, where the most deductible thing is petrol, nothing else, food, expenses, etc, that is not related to work... In this case, wehre can I fetch a trick?

Sorry for my ignorancy, my bad not having studied everything, but after paying 550 per month to the accountant, I thought they sort out all this stuff.

Thanks again for your effort to answer here.

Best Regards

Still seems like a bad deal to me. The fee is only for accountancy? Or is it also part of the percentage which the agency takes (I mean is the agency the contractor to carry out work for a client, and they have outsourced the work to you as the freelancer). Is the accountant part of the agency? Or are those two seperate things. Because, as a freelance, cant you choose your accountant? I pay I think about 2000 a year to my accountant and they do everything. I think your monthly net should be almost 1k more. Don't be too complacent about it, I think there's a better way you can set yourself up here. Also, there should be lots of things which are tax deductible: amortize your car, phone bills, other travel expenses, your company address is probably your house/appartement, so there are many costs related to that which are deductible..but it sounds like you are already aware of that anyway.

Thanks Drew!

For me is a bad deal too. The thing is that I have a recruiting company that leads with me and the company I work for. But who is actually doing everything is another company (international), that is the intermediary between me and the ultimate client I work for. This company is the one that gets the management fee of 550 euro per month directly deducted from my monthly gross salary. This fee is for managing contract, managing payments, liability insurance, and the guy who makes the tax declaration for me.

About deductible expenses, my company (i.e. my own company that is myself as freelancer, has the address where I have my address in Belgium, but obviously my address is for living, not company, so any renting expenses are not deductible. I also send all bills to the management guy every quartier, including bank statements, but the only thing deductible is petrol, anything spent out of Belgium apparently doesn't apply.

Finally, yes, my salary until last year was 1k more per month, now, after new social security recalculation, is 1k less. Basically, the ultimate client is paying around 7 - 7.5 k for me per month to the agency, and I got net, about 2.little k. The management guy obviously says everything is normal, as my salary is very very high.

Now I'm looking for any job, even less qualified than the one I have, it won't be difficult to beat the salary.

Thanks again for your time!!

New topic