What you will actually be paid for that invoice
You invoice €1,000, but €1,210 is not what reaches the bank. If your client is a company or another professional, they withhold your IRPF and pay it over in your name. This calculator gives you the full invoice and the net, which is the number the rent gets paid with.
Why money is taken off an invoice you issued yourself
They are not taking it off you: they are paying it to Hacienda in advance. When a professional invoices a company, another professional or a public authority, the client is obliged to withhold part of the IRPF and pay it into the Treasury in your name. That money appears on your annual income tax return as paid on account, so you do not lose it: you collect it eleven months later, in the form of less tax to pay.
The general rate is 15% on gross income. And there is a reduced rate of 7% for anyone starting out: it applies in the tax period in which you start the professional activity and in the two following ones, provided you had carried on no professional activity in the year before that date. Both are in article 95 of the IRPF Regulations.
The 7% is not applied on its own: you have to say so
This is the small print that costs money. The regulations say that, for the 7% to be withheld, you have to tell the payer, and the payer is then obliged to keep that signed communication. If you do not tell them, they withhold 15% and nothing terrible happens — you get it back on your annual return — but for three years you will be lending Hacienda 8% of everything you invoice.
When there is no withholding
- When you invoice a private individual. A final consumer does not withhold. That is why anyone working mainly for private individuals ends up filing instalment payments: nobody is paying their IRPF in advance for them.
- When what you do is not a professional activity but a business one under estimación directa — a garage, a shop. There is no withholding there except in a closed list of cases.
And there are rates of their own that are neither the 15 nor the 7: 2% for agricultural, livestock and forestry activities, 1% for pig fattening and poultry farming. On top of that, those percentages are reduced by 60% where the income gives entitlement to the deduction for income obtained in Ceuta and Melilla. That is what the “another rate” field is for.
What this calculator does not do
It does not tell you how much IRPF you will pay at the end of the year. Withholding is a payment on account; your real tax comes out of the annual return, with all your income, your deductible expenses, your family circumstances and the state and regional scales. Anyone promising you your final IRPF from a box with two numbers in it is selling you smoke.
Nor does it decide whether your client has to withhold from you. That depends on who they are and on what you do, and it is explained in detail on the professional services page.
The withholding set once, and you never think about it again
The problem with withholding is not the arithmetic: it is remembering to apply it to the right client and keeping the year's running total.
Withholding per client
You tick it on their record — company or private individual — and all their invoices come out with the right rate and the net worked out at the bottom.
The net, printed on the invoice
Base, VAT and withholding come out broken down on the document, and the total is already what they are going to transfer you. There is no need to explain it to the client over the phone.
How much has already been withheld from you
A custom report adds up the IRPF withheld over the year and groups it by client, which is what has to be reconciled against the withholding certificates every January.
Questions about IRPF withholding
A professional's invoice has six numbers on it. Let the program put them there.
Base, VAT, withholding, total, net and due date. In Cairos all six come out on their own, with whichever legal wording applies, and nothing to check over.
Free plan up to 30 documents a year · No card · Native support in Spanish, Catalan, Galician, Basque and English