Untaxed side jobs: what is allowed and what is not (any more)?

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In 2020, you were allowed to earn up to EUR 6,340 tax free. From the beginning of 2021, you will have to pay tax in some cases. This is because the Constitutional Court struck down the old scheme. An overview of the changes is provided below.

1. Occasional services provided by one private individual to another

Cultivating your neighbour's vegetable patch in their garden, sorting out paperwork for your neighbour across the street, picking up your neighbour's son from school... Until last year, you were able to keep all the income from these little jobs (up to a total of EUR 6,340). From now on, you will have to declare this income. It is subject to tax at 33%.

If it is a regular task rather than an occasional one – for example, you cut the grass for your neighbour every week – the tax authorities consider this a side job, making it earned income. You can be taxed up to 50% on this amount.

2. Working for a social or cultural association

Are you the conductor of an orchestra, an actor at a local theatre company, a provider of guided tours at a museum, a supervisor of school trips in your free time, or the person who makes sure everyone always has something to drink at the bridge club?

From now on, you will also need to share any income you receive with the tax authorities. In the case of miscellaneous, irregular income, a tax rate of 33% applies. If it comes from regular activities, you may be taxed up to 50%.

3. Work for sports associations

The government has created a temporary scheme for sports associations. This applies until the end of 2021. After that there should be a definitive arrangement.

The tax system applies to employees of sports clubs such as (youth) trainers, referees, stewards, groundsmen, equipment managers, linesmen and sports organisers. In 2021, they can earn up to EUR 6,390 in tax-free work. A monthly ceiling of EUR 1,065 also applies.

Do you work part time as a janitor, or do you help occasionally or on a limited scale, e.g. with administrative matters or writing newsletters for a sports association? In that case, the maximum amount in 2021 is also EUR 6,390, but the monthly ceiling is EUR 532.50.

To qualify for this tax benefit, you must be at least 18 years old in 2021. In the 12 to 9 months before you started any side jobs, you also need to have been working as a company employee, civil servant or self-employed person in your main occupation for at least 1 day.

Please note that if you earn just 1 cent more than the threshold of EUR 6,390, on an annual basis, then the tax benefit disappears altogether. In that case, your entire income from the association work will be taxed (you will not be taxed only on the one cent extra that you earned).

4. Jobs that are done in the collaborative economy

Cycling around with pizzas in a square backpack, tutoring or delivering parcels? If you work via a recognised online platform, then from 2021.... the old tax regime takes effect again. This was the regulation that applied before 2018.

This means that you will once again pay 20% tax on your income up to EUR 6,390, but with a fixed rate cost deduction of one half applying to the gross amount, meaning the actual tax rate is 10%.

What is important here is that this is a tax on gross income: deductions such as the commission you paid to use the platform and the tips you receive via the app are also included. Since 1 February 2021, the recognised online platforms have been withholding 10.7% in the form of pay-as-you-earn tax. You will then receive a tax statement the following year for when you submit your personal income tax return.

Please note that once you exceed the threshold of EUR 6,390, your entire income from the collaborative economy will be taxed.

Good to know: this measure only applies to online platforms recognized by the government (check the list in Dutch). If you work via unrecognized online platforms, you must declare this income on your tax return. You can be taxed up to 50% on this amount. This applies, for example, to income from Airbnb, items sold on Etsy, renting your car via Getaround and so on.

5. Side jobs in both the sports sector and the collaborative economy

Do you do both of these? Bear in mind that EUR 6,390 is the combined annual threshold, not EUR 6,390 twice.

6. What about volunteering?

Voluntary work is not remunerated, but you can be compensated for your costs. This can be done by reimbursing the actual costs or by setting a flat rate. If you do not exceed the fixed ceiling of EUR 35.41 per day or EUR 1,416.16 per year, this fixed amount is not taxed.

The limit of EUR 1,416.16 can be increased to EUR 2,600.90 in three cases, if you:

  • are volunteering in the sports sector (e.g. voluntary linesman)
  • are looking after people in need of help
  • are providing non-urgent patient transport (to, from and between hospitals).

Voluntary work in the fourth quarter of 2020 and the first quarter of 2021 is also exceptionally covered by this increased annual ceiling (corona measure).

Please note that the reimbursement of expenses for a volunteer may not be combined with association work. For example, you may not work as a youth trainer as a side job and volunteer as a groundsman, unless you receive nothing for the volunteering.

This article does not contain any investment advice or recommendation, nor a financial analysis. Nothing in this article may be construed as information with a contractual value of any sort whatsoever. This article is intended for information only and does not constitute in any way a commercialization of financial products. Keytrade Bank cannot be held liable for any decision made based on the information contained in this article, nor for its use by third parties. Every investment entails risks such as a possible loss of capital. Before investing in financial instruments, please inform yourself properly and read carefully the document "Overview of the principal characteristics and risks of financial instruments" that you can find in the Document centre

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