Since October 2026 the turnover thresholds, social security contributions and tax rates have changed. Choosing between setting up a Limited Company or working as self-employed no longer depends only on image or fear of debt. It depends on concrete numbers.
Setup and maintenance costs
Setting up an SL costs between 650 and 1,200 euros depending on the autonomous community. It includes notary, commercial registry, ITP and management services. A self-employed person only pays an average of 60 euros for registration with the Tax Office and Social Security.
The annual maintenance of an SL ranges between 800 and 1,800 euros: accounting, filing of accounts, corporate tax and manager. A self-employed person pays between 300 and 600 euros annually in management fees.
Social Security contributions in 2026
The flat rate for self-employed workers remains only for the first 12 months at 80 euros per month. From month 13 to 24, the fee rises to 160 euros if net income does not exceed 1,200 euros per month. After that, the new bracket system applies.
In 2026 the contribution brackets based on actual income are:
| Monthly net income | Approximate monthly fee |
|---|---|
| Up to 1,000 € | 200 € |
| 1,000 - 1,500 € | 260 € |
| 1,500 - 2,000 € | 340 € |
| More than 2,500 € | 450 € |
In an SL the director who works in the company contributes as a corporate self-employed worker. The minimum fee in 2026 is 380 euros per month even if they do not receive a salary.
Taxation: Personal Income Tax versus Corporate Tax
Self-employed workers pay Personal Income Tax (IRPF) under the new 2026 brackets:
| Annual tax base | Marginal rate |
|---|---|
| 0 - 12,450 € | 19 % |
| 12,450 - 20,200 € | 24 % |
| 20,200 - 35,200 € | 30 % |
| 35,200 - 60,000 € | 37 % |
| More than 60,000 € | 45 % |
Newly created SLs can apply the reduced 15 % rate during the first two financial years in which they make a profit, provided the tax base does not exceed 300,000 euros. From the third year the general rate is 25 %.
Deductions also vary. A self-employed person can deduct 30 % of household utilities if they work from home. An SL deducts 100 % of expenses provided they are properly invoiced and justified.
Asset liability
The clearest difference is here. As a self-employed person you are liable with all your personal assets: home, car, bank accounts. In an SL liability is limited to the capital contributed, unless you have personally guaranteed loans or incur fraudulent tax debts.
In 2026 banks continue to require personal guarantees in more than 70 % of loans to newly incorporated SLs. Therefore, the limitation of liability is not always total.
Practical case: María in Valencia
María is a graphic designer. She lives in Valencia and expects to invoice 48,000 euros in the first year with deductible expenses of 18,000 euros. She wants to know which option is better for her.
As a self-employed worker she would pay 80 euros in contributions for the first 12 months and 260 euros for the following months. Her net IRPF after deductions would be around 5,800 euros. Total tax and social security cost: approximately 9,900 euros in the first year.
If she sets up an SL she would spend 950 euros on incorporation. She would contribute 380 euros per month as director. Corporate tax at 15 % would be 1,050 euros. Total first year: approximately 7,200 euros, plus the 950 euros for setup.
From the second year onwards the SL becomes more advantageous because the 15 % rate continues for one more year and the corporate self-employed contributions no longer have a flat rate. Her break-even point is at 42,000 euros of annual turnover.
How to calculate your break-even point
Multiply your projected turnover by the average gross margin. Subtract fixed and variable costs. Then apply the social security contributions and the corresponding tax according to each structure.
If your projected net profit before taxes exceeds 32,000 euros per year, the SL is usually cheaper from the second year onwards. Below 25,000 euros of profit, self-employed status is usually better in most cases.
Between 25,000 and 32,000 euros you need to do the exact calculation including management costs, business tax (IAE) and possible deduction of input VAT.
Can these procedures be done online?
The incorporation of an SL and registration as self-employed can be carried out online with electronic signature and notarial video call. The complete SL process takes between 7 and 15 working days if all documentation is submitted correctly.
From what annual turnover is an SL more advantageous in 2026?
With October 2026 data, an SL is usually more advantageous from 42,000 euros of annual turnover when the net margin exceeds 35 %. Below 32,000 euros of net profit, self-employed status is more economical in 80 % of the cases analysed.
Does the 80-euro flat rate for self-employed workers still exist throughout 2026?
No. The 80-euro flat rate only lasts for the first 12 months. From month 13 to 24 the fee rises to 160 euros if income does not exceed 1,200 euros net per month. From the second year the system of contributions based on actual income with brackets applies.
Can I have an SL and continue contributing as self-employed?
Yes. It is possible to be a director of an SL and contribute under the RETA as a corporate self-employed worker. You can also be self-employed and a minority shareholder in another SL without incompatibility as long as you are not a director of the latter.
Is the limited liability of an SL absolute in 2026?
It is not absolute. Although liability is limited to the share capital, banks require personal guarantees in most financing transactions. In addition, the Tax Agency and Social Security can pursue the director if fraud or gross negligence in the non-payment of debts is proven.