New Self-Employed Social Security Contribution Rates Agreed Between Spain’s Government And Unions
Spain News
Published: 20 July 2022 10:07 CET
Updated: 31 January 2023 10:07 CET
The Spanish Government and labour unions have reached an agreement on a new range of social security contributions for self-employed workers.
The new quotas which will be phased in between 2023 and 2025 will be based on a worker's net income and will see those earning the least paying a reduced amount of contributions with those earning more paying an increased amount.
The Ministry of Social Security, led by José Luis Escrivá obtained the approval of the three main self-employed associations (ATA, UPTA and UATAE) after months of negotiations.
Spain’s Government had promised Brussels that they would conclude reforms to the system by the end of June, however, this was delayed due to negotiations between ministers and the country’s self-employed associations.
The new quotas will have 15 thresholds ranging from those earning up to 670 euros per month to self-employed autonomo workers earning more than 6,000 per month.
The contributions payments will be applied accordingly to each threshold and range from between 200 and 590 euros per month. These quotas will be based on net income which is the amount earned minus any deductible expenses.
Those with monthly earnings of up to 670 euros currently pay 294 euros per month in social security payments. However, under the new system, this will be reduced to 230 euros in 2023, 225 in 2024 and finally 200 euros per month in 2025.
Those with a net income of between 670 and 1,500 euros per month will continue to pay less than the current quotas paying a maximum of 291 euros per month.
Workers with a net income of between 1,500 and 1,700 euros will continue to pay the current fixed rate of 294 euros per month.
Under the new quotas, more than 2.2 million workers will see their monthly social security contributions reduced.
Unfortunately, other groups are always going to bear the brunt of any change and in this case, it will be those with a net income exceeding 1,700 euros per month who will pay more in contributions.
In fact, anyone with a net income of more than 1,700 euros per month will see their contributions steadily increase from 2023 until 2025.
Data shows that more than 800,000 people will fall within this bracket.
As an example, those earning between 1,700 and 1,850 per month will pay 310 euros in 2023, 320 euros in 2024 and 350 euros in 2025.
Those with an income of more than 6,000 euros per month will naturally pay the most with contributions ranging from 500 euros per month in 2023, 530 euros in 2024 and 590 euros in 2025.
The UPTA and UATAE had already agreed to the proposals which left the ATA (Association of Autonomous Workers) to give their seal of approval which they did via an announcement on Twitter on Wednesday.
President of the association Lorenzo Amor said, “This morning we reached a pre-agreement with the ministry on the new contribution system for the self-employed and their benefits,” he said.
You can find a table of the new self-employed contribution thresholds and rates from 2023 at the following URL.
https://cincodias.elpais.com/cincodias/2022/07/19/economia/1658228261_218758.html
Source
https://elpais.com/economia/2022-07-20/el-gobierno-cierra-el-acuerdo-con-los-autonomos-asi-es-el-nuevo-modelo-de-cotizaciones.html
Image Credit: La Moncloa Flickr
