Spain to reform self-employed social security contributions

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Spain's self-employed social security system to be overhauled

MADRID – The Spanish self-employed social security system is to be overhauled. The government wants to introduce 13 income brackets for the monthly payment to the Seguridad Social. These contributions will range from €90 to €1,220.

The new system is still under discussion with the social partners. It would be introduced next year with effects felt by 2023. The biggest change is that in the future system, the payable self-employed social security contributions will be based on real income. Currently it is a fixed amount per month, regardless of how much a self-employed person earns.

Leading associations for the self-employed have long been asking for a link between earnings and social security contributions. Now it is the case that even if a self-employed person earns very little, at least €250 euros is payable to the social security system. People who earn considerably more pay the same.

Minister Escrivá of Social Security made the proposal to the main trade unions UGT and CCOO, as well as to the employer groups CEOE and Cepyme. According to El País, this is a 14-page document, and the ministry has warned there are still several options on the table; this is not the final text.

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Contribution amount no longer a choice

In Spain, most self-employed people (autónomos) now choose to pay the lowest monthly amount from €250. This is based on a premium income of €944 euros, regardless of the actual income. That will no longer possible in the future. Now, even the self-employed with the lowest earnings have to pay a minimum amount.

According to the plan, there would be 13 premium brackets for the self-employed based on the annual income of the person. These reflect monthly amounts to be paid between a minimum of €90 and a maximum of €1,220. El País calculates someone earning between €3,000 and €6,000 per year will pay €90 per month in the future. For a self-employed person earning between €27,000 and €32,000 on an annual basis, the monthly amount would increase to €670. If an autonomo in Spain were to earn more than €48,841, the monthly contribution becomes €1,220.

Flexibility with income bracket

The new system would be introduced next year, although the effects would not be felt until 2023. Further, there would be a transition period of nine years.

In the new system, the self-employed can choose their income bracket based on an estimate of their annual income. That bracket could be changed up to six times a year. If there is a discrepancy between contributions and actual earnings at the end of the year, an additional payment must be made or a refund requested.


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