Becoming self-employed: which category should you go with?

Ready to start your business as a self-employed entrepreneur? Then you first need to decide on your self-employed status, then your legal form, and finally the type of company (if applicable). 

The choice of status depends on your situation. You can become self-employed as your main activity, your side activity, or as a self-employed student. What the differences are between both categories and what the implications are, is something you’ll find out below.   

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Which category better suits your situation?  

Which self-employed activity you will go with, depends on your situation:    

  • Self-employed as a main activity: your activity as a self-employed entrepreneur will become your new main activity, dedicating 100% of your (work) time to it. 
  • Self-employed as a side activity: you’ll combine your activity as a self-employed entrepreneur with your current (part-time) job. 
  • If you are a student and you want to start your own business, request the status of a self-employed student. 

You can also start your business as a side activity and expand it to your main activity as your activity grows. 

Are you a liberal professional? Find out about the different types of legal status and their implications here. 

What are the requirements to become self-employed in a side activity?   

Everyone who works as an employee at least part-time or 19 hours a week, can become self-employed in a side activity.

  • Are you a civil servant? Then you could need your employer’s permission.  
  • Do you work in education? Then you need to work 60% of a full-time schedule at least if you’re permanently appointed. If not, you need to work at least 50% of a full-time schedule.  
  • Are you unemployed? Then you can start your business as a side activity by using the stepping stone to becoming self-employed. With this arrangement, you’ll keep your unemployment benefit for 12 months. 

Self-employed as a side activity: the pros and cons 

What are the pros of being self-employed in your side activity? 

  • You get additional income: you earn an additional income on top of your salary as an employee. How much you make as a business owner obviously depends on how much work you put into your side activity.  
  • Never dull: you can decide to work 4/5 of a workweek as an employee, which gives you more time for your side activity. Your net salary as an employee will not decrease proportionally with your work time (you’ll work 20% less, but your pay will not decrease by 20%). You will simply be subject to a lower tax scale. 
  • You get a fiscal advantage: you can declare the costs you have as an entrepreneur in a side activity as professional costs. The difference between your profit and these costs determines your taxable income. 
  • You pay fewer social security contributions: your social security contributions are calculated based on your net income, so you’ll be in luck. If your net income stays under a certain amount, you don’t even have to contribute anything. 
  • You get VAT refunds: the VAT you’ve paid on expenses can be recollected, which means you’ll owe the government less VAT. If you have an annual revenue of under €25,000 you will even be able to benefit from a simplified VAT arrangement
  • You get to keep your social insurance as an employee: as a self-employed entrepreneur in a side activity, you keep the social insurance you had as an employee, as well as your right to holiday, a pension, sick pay, family allowances, etc. 

What are the cons of being self-employed in a side activity? 

  • You need to invest a lot of time: being self-employed impacts your schedule. Especially in the beginning, when you need to take care of certain administrative formalities. Luckily, our one-stop shop for entrepreneurs is here for you. 
  • You don’t have additional social rights: you don’t have a right to (additional) social allowances for the self-employed, like child benefit, pension or bankruptcy insurance. You only have the right to the allowances pertaining to your main activity.  
  • You need to pay more taxes: the income you make from your side activity is added to your salary as an employee. This means you can end up in a higher tax rank, meaning you could have to pay more taxes. 
  • You have more expenses: as a self-employed entrepreneur, you have a lot of expenses: investments, recurring costs, travel costs, accountancy costs, etc. Many of these are deductible, though – in full or partially. 
  • You need to compete with others: there’s always the risk that your competitors are full-time freelancers. They are more flexible because they are available during office hours. Depending on the work you do, this could be a hurdle. 

Who can become a self-employed student? 

To apply for student-entrepreneur status, you need to meet the following conditions:  

  • Be aged between 18 and 25
  • Be enrolled as a student in a Belgian or foreign educational establishment and take at least 27 credits per year or 17 hours of classes a week.  
  • Be engaged in a professional activity (not as a subordinate to an employer) for which they are subject to the social status of self-employed workers. 

Why is it interesting? 

Self-employed students benefit from an advantageous social security contributions system:  

  • If student-entrepreneurs earn less than €8204.6 a year, they pay no social security contributions
  • If their income is between €8204.6 and €16,409.2 a year, a reduced contribution of 20.5% will be calculated on the amount over €8402.6. 
  • If their income exceeds €16,409.2 a year, they will pay social security contributions like any other self-employed person

So, it is up to you to decide what brand of entrepreneurship fits your situation and plans. Do you want to start your business in a main activity? Find out how to pick the right company format and legal status