Net income: the figure three things come out of at once
The IRPF return in June, each quarter's instalment payment and, since 2023, the cuota de autónomos as well. No other figure carries as much weight.
What is left after deducting the tax-deductible expenses from the gross income of the activity, before applying any reductions.
Article 28 of the Personal Income Tax Act refers to the Corporation Tax rules to work it out: gross income less deductible expenses, assigned on an accruals basis.
The reductions in article 32
- 30% for income generated over more than two years or that is markedly irregular.
- 20% for starting an activity: applied in the first tax period with positive net income and in the following one, limited to €100,000 of net income.
- Specific reductions for economically dependent autónomos.
An example with numbers
The autónomo from the earlier example, in their second year of activity and with positive income for the first time:
- Income 48,000 − expenses 14,000 = €34,000
- Hard-to-substantiate expenses (5%, capped at €2,000): −€1,700 → €32,300
- Reduction for starting an activity, 20%: −€6,460 → €25,840
And the Seguridad Social
Since 2023, RETA contributions are worked out on forecast net income: the system in RDL 13/2022 assigns a contribution band based on that figure, and the following year it is adjusted against real income. The bands and the bases are set by a contributions order each year — for 2026, Orden PJC/297/2026 — so they change completely every January.
The mistake that comes up most
Confusing net income with what is in the bank. Depreciation is an expense with no cash going out, and the cuota de autónomos and the instalment payments are cash going out that does not reduce income in the same way. The two figures never match.
Where this carries on in Cairos: Working out the withholding and the net figure.
Terms that go with this one
Almost no tax concept makes sense on its own. These three are the ones that most often turn up beside it.
Estimación directa
The IRPF regime in which the income from the activity is worked out by deducting real deductible expenses from real income.
IRPF and withholdingsInstalment payment
The payment on account made during the year of a tax that is settled at the year-end.
AccountingDepreciation
The systematic spreading of the cost of a fixed asset across the years in which it is used, as a deductible expense of each of them.
This, handled without thinking about it
Cairos keeps the invoices, the record books and Hacienda's forms from the same data, so the theory on this page turns into boxes that are already filled in.
No card and no minimum term.