Lower Social Security Payments Help Boost Self Employment Numbers In Spain
Spain News
Published: 26 August 2014 12:01 CET
Updated: 20 December 2019 13:01 CET
Governments 80% reduction in social security payments for new self-employed helps increase Spanish workforce by 267,000.
In early 2013, Mariano Rajoy's Popular Party (PP) introduced significant changes to the social security payments for self-employed workers in an attempt to reduce unemployment and get the economy back on its feet.
For new self-employed workers the usual rate of €260 per month, was reduced to just €53 per month for the first six months with a further 50% reduction for the next six months and a further 30% discount the subsequent months.
The government recently announced that since its introduction the initiative has been a great success, helping put around 267,000 people back to work, albeit as self-employed.
Of the 267,000, around 109,000 are said to be under the age of 30 according to the Ministry of Employment.
Last year, the government also announced that self-employed workers no longer had to pay VAT (IVA) until they had been paid themselves. Traditionally, this had to be paid at the time of invoicing which for many led to cash-flow issues.
Despite the new incentive, the overall self-employed numbers have been falling since the financial crisis in 2008. There are currently around 2 million people self-employed in Spain, which is around 14% lower than prior to the economic collapse.
