Have you been daydreaming about quitting your “real” job and moving to freelance? Would you like to have a 4-week vacation, no work on official bank holidays and sick-days and still earn €1000/month after taxes on average? Good! Here’s how much you should hustle.
DISCLAIMER: I’m not a financial advisor (yet! 🔥) and the following is not a substitute for independent professional advice.
N. B. (1) The hourly-rates calculated below do NOT include expenses, which have to be accounted separately for your individual case.
N. B. (2) The optimized** tax rate assumes the LEAST possible amount of tax payable in Latvia for €1000/month income after taxes, hence the least possible social tax contributions. Use with caution.
(1) Full-time Hustle Scenario
€12’000.00 Net income per year
€14’585.75 Total income per year before optimized** taxes (view the calculation below all scenarios)
220 Working days per year You’ll actually* work
8 Hours per day You’ll presumably work
€8.29 Your full-time hustle hourly rate (before taxes)
You’ll have to hustle and write invoices for at least €8.29/hour full-time to earn €1000/month on average, even during vacations and sick-days.
*250 official working days in 2019 in Latvia minus 20 for vacations and 10 for sick-days.
(2) ‘Millennial’ Hustle Scenario
4 Working days per week, obviously (176 days per year)
6 Hours per day (Like in Sweden, as read on Facebook)
€13.81 Your ‘millennial’ hustle hourly rate (before taxes)
(3) Fixed Rate Hustle Scenario
Have you been side-hustling already? Did you charge €10-€50/hour for your work? Here’s how much side-hustling you need to earn €1000/month on average:
€14’585.75 Total income per year before optimized** taxes
220 Working days per year
€66.30 Required income per working day (before taxes)
10€/hour rate = 6.7 side-hustling hours per working day
20€/hour rate = 3.4 side-hustling hours per working day
30€/hour rate = 2.3 side-hustling hours per working day
40€/hour rate = 1.7 side-hustling hours per working day
50€/hour rate = 1.4 side-hustling hours per working day
You’ll need 1.4-6.7 side-hustling hours per actual working day with 10€-€50/hour hustling rate (before taxes) to earn €1000/month on average even during vacations and sick-days.
**Optimizing Taxes For €1000/month Income
In order to optimize taxes for €1000/month income in Latvia, you have to register:
(1) a microenterprise-tax LLC (Limited Liability Company or SIA) in Latvia (because of the 15% income tax rate)
(2) a self-employed person for the remaining income.
(1) Pay the maximum regulated monthly salary from your company: 720 EUR/month, which is €847.06 before the 15% income tax.
(2) Pay the remaining 280 EUR/month as a self-employed person, which is €368.42 before all taxes
€847.06 + €368.42 = €1215.48/month hustle after taxes or the previously mentioned €14’585.75/year.
If you’d like to open a limited liability company in Latvia the easiest way possible with e-signatures, then go to my project www.registeracompany.lv or send an email to firstname.lastname@example.org to get started.