As a self-employed person you are not obliged by the Tax Authorities to keep track of your hours. But you must be able to demonstrate that you have spent sufficient hours on your company. Time registration is therefore advisable. And no, I know: that is not the most fun job to do. But handy to do! It is not only part of your administration, it also benefits you. For the Tax and Customs Administration you must meet the hours criterion of 1,225 working hours per year to be eligible for the entrepreneur’s allowance (read: tax benefit). But for yourself it also has advantages to keep track of your hours. What should you pay attention to, how and why should you register your hours and how can you best approach your time registration? In this article I will discuss these questions.
Keeping time records is a tax advantage
In 2020, applying the self-employed person’s allowance and starter’s allowance will yield a tax benefit of 9,153 (7,030 plus 2,123) euros. The Tax and Customs Administration sets the condition that you keep track of your hours, because you must be able to prove that you worked at least 1,225 hours in the year in question. Look for the exact conditions and amounts for other years on the website of the Tax Authorities .
Do you more than meet the hours criterion? Then keeping track of your hours is less important for the Tax Authorities. For example, if you run a shop all year round that is open 40 hours a week, it is very easy to demonstrate that you have worked enough hours for the hours criterion. For yourself it can be useful to keep track of your hours.
You may apply the starter’s allowance on top of the self-employed person’s allowance if you were not an entrepreneur in 1 or more of the 5 previous calendar years and you did not apply the self-employed person’s allowance more than twice during that period. Starting entrepreneurs can therefore (generally) apply the starters’ credit over 3 years. The starter’s allowance is an amount of 2,123 euros in 2019, which means that you must have worked at least 1,225 hours.