Life as an Autonomo: How to Earn More Money Teaching in Spain
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Open 10 random teaching adverts on Lingo Bongo and I would bet that in at least 4 you would read something along these lines:
English academy Madrid is looking for a native English teacher with 5 years of experience, relevant qualifications, relevant documents to work in Spain and a passion to teach X age group. We offer a competitive salary.
The standard competitive salary is €1200 a month for a 25 hour workweek regardless of qualifications or years served as an ESL teacher. Some academies will try offer less but these normally hire non-native teachers.
Doesn’t seem too bad with a few private classes thrown in.
Dig a bit deeper into the life of a contract ESL teacher and that €1200 is not worth it. Many academies will make you travel far and wide to attend classes, most will not cover your travel times, and forget getting time off to lesson planning or grading.
Adding to your woes are the increased costs of living in the city centre. The rise of Airbnb has increased the rent for the decreasing number of long-term rentals and English teachers are at the bottom of the pecking order.
And that money you managed to save up? It’s gone from the 1st of August to around the 14th of September when academies close for the summer break with some even closing from the start of July.
But don’t worry – there’s a secret to making more than €2000 and working no more than 25 hours per week that took me close to 2 years to come across.
What is an autónomo?
The word “autónomo” strikes absolute terror in the hearts of landlords for giving up the safety net of the contract and words of caution will be uttered about the high social security contributions.
An autónomo, basically translated as “freelancer”, is a tax payer in Spain who decides to register as a self-employed worker. This allows the individual to issue invoices and is responsible for declaring taxes and paying social security, both of which a person on a contract is unable to do. You need to have a NIE, Social Security number and home or business address to become a freelancer in Spain.
In early 2016 when I first heard of the word, I also had the same feeling of dread especially as autónomos do not easily receive unemployment benefits.
Fast forward 2 years and I was still only saving around €500 a month if I was lucky, despite counting my pennies and avoiding eating out except for special occasions. The summer holidays would put a huge dent into my savings every year and the academies would always do their best to stiff me a portion of my salary.
It was then, at 28 years of age, that I reconsidered becoming an autónomo. The process was actually very simple and involved going to my gestoria, basically a combination between an accountant and lawyer, paying €100 and waiting 6 days for the documents to arrive at my house confirming my ascension to the autónomo ranks.
My gestoria also explained to me the myth of the high social security contributions. Yes, it’s true that autónomos do contribute way more than the average worker in Spain, who contribute about 6.35%. However, contract workers don’t see that their employers pay an additional 29.90%. In the end the total contributions for contract workers exceed that of autónomos.
To add to this, the autónomo contribution caps at €283 whilst contract workers’ overall contributions increase in proportion to their salaries.
The second benefit is more hidden. It is very difficult at present for autónomos to gain access to unemployment benefits, a.k.a el paro, but my gestoria showed me the maths once again to demonstrate that it is not always better to contribute towards the unemployment support. I have done my best to replicate his work but bear in mind that my monthly calculations are not 100% accurate.
English teacher on a temporary contract
€1500 gross salary for 25 hours of work per week
€2300 gross salary for 25 hours of work per week
€95.25 employee contributions
€449.25 employer contributions
€285 social security contributions *
€1200 net salary
€1600 net salary (this is the lowest that an autónomo English teacher makes)
€1050 is the monthly unemployment benefit after contributing for a minium of one year. For 1 year of contributions I receive 70% of my gross salary for 4 months. Read more on this here.
*New autónomos start off at €60 for the first 12 months but in the community of Madrid if you are a man under the age of 30 and a woman under the age of 35 (I think) you get to extend this low contribution until you pass that age at which point your contributions slowly go up to the maximum amount. So my salary, before I add in the money from my private classes, is at €1800.
It may seem a bit unfair that you contribute more than your counterparts who are on a contract.
However, let us look closer into this. You make €400 more per month than your counterpart amounting to €4000 more per year (excluding the dead months of July and August) that you can consider as your “unemployment benefit”. Your contract counterpart will receive €4200 for 4 months of unemployment benefits. So both parties receive more or less the same amount.
Once again, as a new autónomo, you will pay a lesser amount of social security of the first year (around €60 per month) and this will lead to you earning at least €1800 net a month. So we multiply this by 10 months, excluding July and August, and we come to €6000 a year more than your contract counterpart. And that is as a new autónomo who hasn’t yet got a base of clients paying him or her directly or including extra pocket money from private students.
Also as an autónomo you have full control on the money that you receive for your work and are responsible for the taxes and social security contributions that you make. Many teachers on contracts that I know personally have gone to ask for the paro only to discover that the academy has not been paying the correct amount of social security. As a result they walked away with much less paro than they originally planned to receive.
Other benefits that autónomos receive
Did I forget to mention that you get to declare 10% of your gross income as a deductible expense for hard-to-prove expenses like buying paper clips or pens?
Autónomos can band together and form a cooperativa/cooperative whereby you can declare social security contributions only for the days that you work and not on a monthly basis. Most autónomos choose to work Monday to Thursday, so technically you could avoid paying for 4 working days worth of social security contributions. You should check with your gestoria on how best to set this up as companies do not like dealing with cooperativas.
You can also declare expenses that are business related like taking your clients out for lunch or the purchase of a new computer.
How to make €2000 plus as an autónomo
Now for the answer that you really want to hear: how to make some serious cash as an ESL teacher in Spain without breaking your back.
Here is some real inside information for those wanting to work in Madrid:
- The price charged per hour by the academies for an in-company class within the M30 is between €30 to €35
- Outside of the M30 prices rise to as high as €60 per hour
However, as a new autónomo you can forget about making this kind of money. So the first step is to go lingobongo.com or madridteacher.com and find academies/human resource agents that give company classes to autónomos. You can also post your profile on tusclasesparticulares.com
You will have to go for a short interview. Anticipate questions like:
- How would you go about teaching a mixed ability group of business English students?
- How do you go about preparing a CEO for an important presentation in English?
- What experience do you have with business English classes?
Usually the academies have a shortage of autónomo teachers so you will probably get the job if you are a native speaker and have at least one year of teaching experience behind you.
Never accept anything less that €21 per hour for a class in the city center of Madrid or Barcelona. For any classes offered outside of the city centre take nothing less than €27 per hour and do a minimum of two and a half hours. The reason being is that you have to factor in your travel time to make it worth your while.
Some autónomos who have been working for a couple of years at the same company “steal” the contract from the original academy and become the in-house company teacher. If you plan to be a long-term teacher in Madrid then you should try your very best to entrench yourself in one company and know all the top brass.
After about 5 years you can propose to the CEO about skipping the middleman, i.e. the academy, and working with you directly for a lower price. I personally work for one such teacher who uses her autónomo status to invoice the company and then pay her autónomos to do some classes.
But why doesn’t she do all of the classes and make more money you may ask?
The short answer is falso autónomos.
Spanish companies are not allowed by law to employ an autónomo for more than 40 hours per week because in the past, companies would make their staff become autónomos to avoid paying the high social security costs. So, those autónomos with company contracts fill their schedule and then make extra by giving out classes at the usual market rate of €23 to other autónomos.
However there is a way to overcome this problem. Form a Sociedad Civil (S.C.) that is basically an unlimited partnership.
An S.C. requires at least two autónoms and you can work for as many hours as you want for the company without the company being accused of breaking the law.
Finall, let’s talk about government contracts.
Government contracts are very difficult to attain due to the lengthily process of bureaucracy and paperwork that needs to be completed.
This can be solved really quickly (and for a price) by using the services of a licitaciones. Licitaciones will, for a percentage of the contract’s total value, do all the necessary legwork to put your papers for the contract that you desire
Still you will need to do a bit of work as government regulations stipulate that you need to have a registered office that acts as a company address. This is simply solved if you have a contact that owns an academy who will let you use his/her company address. Probably promise to give something in return for this small favour.
Nevertheless these contracts are highly sought-after so expect a lot of competition against your bid.
8 Things to avoid as a new autónomo
Commandment number 1
Never allocate all of your teaching hours to one academy. If that academy fails to pay up or goes bankrupt then you will be screwed out of the majority of your monthly earnings
Commandment number 2
Peak season for getting work is in the middle of September and the middle of January. Don’t register as an autónomo in the middle of July or August as the work will pretty much be dead.
Commandment number 3
In September and January do not take the first early offers that you receive. Wait a few days as most of the hiring season will peak for 2 or 3 days before dying off. You want to have your schedule free whilst you work out the best combination of classes to fill your day.
Commandment number 4
The peak times for classes are:
- Mornings from 0700-0900
- Afternoons from 1400-1630
- Afternoons from 1730-1900
Do not take a 1 hour lunch class from 1400-1500 on a tuesday as you will probably not have enough time to travel to another class. Only do this for a much higher wage.
Commandment number 5
Don’t be afraid to drive a hard bargain after the peak months. Once autónomos are booked up during the months of September and January, academies find it very hard to find freelancers with time to spare. Scarcity drives up the price. So get a feel for how desperate the academy is and hike up the price by about €2 per hour.
Commandment number 6
Check the length of the company contract. No point getting a juicy contract that only lasts for 2 months and then fizzles out. I only do these for July and at a higher price.
Commandment number 7
Avoid one-to-one company classes with business directors. Do your best to get group classes.
Commandment number 8
Look after your clients. Many of my lucrative private clients have come from the recommendations of well-placed CEOs and upper management of big companies
Ryan sheehan has been teaching business English in Madrid for close on 3 years. He recently created his own website, Espeaky, that focuses on Spanish students who want additional resources on how to improve their business English.