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Date Published: 07/10/2024

Major changes to social security contributions for self-employed workers in Spain

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Lower-income autónomos in Spain could see their monthly contribution reduced by up to 30 euros

Major changes to social security contributions for self-employed workers in Spain

Starting on January 1 next year, the contribution system for the more than 3 million self-employed workers in Spain will undergo a significant change. The government has introduced a new system that calculates contributions based on real income, rather than allowing self-employed workers, or autónomos, to choose their contribution base.

At the moment, self-employed workers can choose their contribution base to the Régimen Especial de Trabajadores Autónomos (RETA) within certain limits, regardless of their actual income.

This system has allowed some self-employed workers to pay lower contributions, but it also means they receive less financial protection in the future. The new system aims to provide greater equity and fairness in contributions.

The current system is a double-edged sword. Government data shows that only 20% of self-employed workers changed their contribution base when the new system was introduced last year. Out of those, only a third raised their contribution base.

Now, ahead of the changes coming in 2025, the Tax Agency is busy checking if autónomos have paid the right amount based on their real income. Anyone who hasn’t can likely expect a tax bill from November onwards.

How will the new system work?

Social Security has established 15 monthly net income brackets, ranging from 670 euros to 6,000 euros. Each bracket will be assigned a specific quota, ranging from 200 euros to 590 euros in 2025.

To determine the corresponding bracket, self-employed workers must inform Social Security of their income forecast for 2025. Throughout the year, workers will be able to modify their contribution base up to six times, adapting it to the evolution of their actual income.

Who wins and who loses?

According to estimates, self-employed workers with lower incomes could see their monthly contribution reduced by up to 30 euros.

However, those with net incomes of more than 1,700 euros per month will see their contribution to Social Security increased, paying between 30 euros and 90 euros more per month, which could mean an annual increase of between 360 euros and 1,080 euros.

Concern among the self-employed

This change in the contribution system has generated concern among self-employed workers, especially those with medium and high incomes, who will see their tax burden increase. In addition to the uncertainty about the evolution of the economy and the pressure of the rising cost of living, there is now uncertainty about the real impact that this new quota will have on their personal finances.

The future of freelance work at stake

The new RETA contribution system represents a significant change for self-employment in Spain. The government's aim is to make the system fairer and more supportive, but its success will depend on its ability to adapt to the needs of self-employed workers and not hinder entrepreneurship and self-employment.

Also of interest: Spain launches handy new social security app for self-employed and contracted workers

Image: Freepik

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