The way a self-employed worker (autónomo) calculates income for tax purposes isn't always the same: several regimes exist, and choosing the right one for your activity can make a meaningful difference to your tax bill. The two main options are direct estimation (estimación directa) and the modules regime (estimación objetiva).
What direct estimation is
This is the most common regime, and the one applied by default unless you expressly opt for modules (when your activity allows it). Your taxable income is calculated on your actual income and expenses: you pay tax on the profit you genuinely made (income minus properly documented deductible expenses), which faithfully reflects how your business is actually doing.
Within direct estimation there are two variants, normal and simplified, which differ mainly in turnover thresholds and in some bookkeeping simplifications available under the simplified variant.
What the modules regime (objective estimation) is
Under this regime, the income you declare isn't calculated from your actual income and expenses, but through a predetermined formula based on objective indicators of your activity (number of employees, floor space of your premises, electricity consumption, installed power, among others depending on the specific activity), set annually by the tax authorities for each type of activity included in the regime.
This regime is only available for certain activities expressly included in it (mainly retail, hospitality, transport, and some trades), and only if you stay below certain thresholds for turnover and purchase volume.
When each one pays off
- Modules pays off when your actual profit is higher than what the modules formula would produce, since you'd be taxed on a figure lower than your real profit. It also considerably simplifies bookkeeping, since it doesn't require a detailed record of every expense.
- Direct estimation pays off when your actual profit is lower than what modules would produce (for example, if you have many legitimate deductible expenses, or if your business is going through a less profitable period), since in that case you'd be taxed on your real, lower profit.
The simplicity of modules comes at the cost of flexibility
The modules regime offers predictability and administrative simplicity (you know roughly in advance how much you'll pay), but it doesn't adjust to your business's actual ups and downs: if you have a bad year, you still pay according to the modules formula rather than your real result, which can hurt you during periods of low income.
How to decide with more confidence
The most reliable way to decide is to calculate, using data from your specific activity, how much you'd pay under each regime before choosing one or the other, since the optimal tax choice depends entirely on your business's actual figures, not on a general rule that applies to every activity.
Estimate your income tax withholding once you've chosen a regime
Our income tax calculator gives you an initial estimate of your effective rate and withholding, useful as a reference once you have a clear picture of the net income you'll be declaring under the regime you've chosen.