Most freelancers have another source of income: CBS

Some 1.3 million people in the Netherlands do some sort of freelance work, often alongside a regular job, the national statistics office CBS said on Wednesday.

In total, almost 800,000 people rely solely or mainly on income from freelancing while a further 553,000 rely on another source of income – a part-time job, pension or social security benefits – to make ends meet, the CBS said. Just 508,000 of the total have no other source of income apart from their freelance work.

The figures show that around half of the country’s self-employed earn less than €25,000 a year.  Around one in five had an average income of at least €73,000 in 2014, while almost one in eight earned just €6,600, the CBS said.

Contracts

Meanwhile, the senate on Tuesday evening voted in favour of the cabinet’s plans to scrap the current VAR registration system for freelancers and replace it with a system of individual contracts.

The aim is to make sure that companies are not using freelancers instead of traditional employees to get round paying social security and other premiums. The new rules will apply to all freelancers – from home helps to management consultants – and will come into effect on May 1.

Change-over

Tax minister Eric Wiebes has agreed to a change-over period of one year, before the tax office gets involved in assessing the agreements to determine if freelancers are really self-employed.

Wiebes estimates between 10% and 30% of the country’s 800,000 freelancers are effectively employed by one or two companies.

While unions have welcomed the agreement, some experts say it will lead to more red tape and encourage employers to stop using the self-employed because of the risk of being saddled with a bill for social security premiums.