Freelancer tax in Europe: how it works
As a freelancer or self-employed person you pay tax on your profit, which is your revenue minus deductible business expenses. In most countries you also pay social contributions for pension, health insurance and unemployment cover, which an employer would otherwise share with you.
How much to set aside for self-employed tax
A common rule is to set aside 25% to 40% of your profit, depending on country and income. Open a separate savings account and transfer a fixed share of every invoice. Keep VAT collected from clients apart, because it is not your income.
Special regimes for small businesses
Many countries offer simplified schemes. Examples include the micro-entrepreneur regime in France, the forfettario regime in Italy, the small-business VAT exemption (Kleinunternehmer) in Germany and an optional 19% flat income tax in Poland. They can lower tax and paperwork but have income limits, so check eligibility with a local adviser.