SHARE
COPY LINK
For members

SELF-EMPLOYED

Spain eyes €80 flat fee for self-employed which will save low earners €900

The Spanish government has proposed raising the monthly flat fee new ‘autónomos’ initially pay from €60 to €80, a rise which will purportedly mean lower earners end up saving more than €900 in social security payments over two years.

spain self employed flat fee
Self-employed people in Spain currently pay the highest monthly social security fees in the EU. (Stock Photo by Prakash MATHEMA / AFP)

Spain’s Social Security Ministry is in the process of negotiating its new fees and tax rates for the country’s 3.3 million self-employed workers (known as autónomos), changes which are likely to come into force in 2023. 

The proposed amendments have been tweaked on several occasions over the course of 2022 but are still generally unpopular, as the new tax bracket rates are likely to be beneficial for lower earners but bad news for higher earners.

Their latest proposal relating to autónomos’ social security payments is heading in the same direction.

It would see the monthly €60 minimum contribution base (in reality it’s €69 in 2022 although not widely publicised) that autonónomos currently pay in the first year after they register with the RETA system increase up to €80. 

As things stand, this €60 flat fee that gives self-employed workers access to Spain’s social security system (including public health) rises progressively over the second year until reaching a monthly fee of €294. This is on top of the tax paid on income. 

The new tarifa plana would be adapted to so-called real earnings (ingresos reales), however.

According to the ministry, new autónomos will be able to save €916 on their social security payments during their first two years of self-employment.

But this is only if over the course of their second year of work their net income is below Spain’s Interprofessional Minimum Wage (SMI), which in 2022 is €1,166.67 a month over 12 months.

New self-employed workers who meet that criteria would pay a flat fee of €80 over a 24-month period, rather than seeing their rate increase progressively over the second year up to €294 as is currently the case.

In other words, they would pay €1,920 in social security payments over two years rather than the current €2,836 it adds up to now, representing €916 of savings.

For autonónomos whose earnings are above the minimum wage during the second year, the new €80 flat fee will apply for the first year but during the second year they will have to pay more.

According to several Spanish sources specialising in self-employed work in the country, unions and social agents representing autónomos have all but agreed with the ministry headed by José Luis Escrivá that these changes will go ahead.

So it appears that this will be a positive measure for self-starters who are struggling to get their businesses in Spain off the ground over the first two years, but nothing to write home about for those who have found relative success.

Many self-employed workers in Spain have long felt they are burdened with unfair tax and social security contributions.

The initial flat fee was already raised by €50 to €60 in 2019, and in 2022 the minimum contribution base for the more seasoned self-employed was also increased from €286 a month to €294

How does Spain’s social security payment system for self-employed workers compare to other European countries?

Self-employed people in Spain pay the highest monthly social security fees in the EU. 

In France, freelancers do not pay anything the first year and from the second, the fees vary depending on how much you earn and the sector you work in.

In Germany, a self-employed worker with a monthly income of less than €1,700 pays nothing.

In the UK, national insurance contributions start at £3.05 a week, or £158.60 a year.

In Italy, there is no fixed monthly fee. Self-employed workers only pay income tax based on their income.

Despite having the most expensive social security payments in Europe, it should be noted that autónomos in Spain do get more for what they pay. For example, they receive benefits such as sick pay and maternity and paternity pay, unlike in countries such as the UK.

READ ALSO – Self-employed in Spain: What you should know about being ‘autónomo’

Member comments

Log in here to leave a comment.
Become a Member to leave a comment.
For members

SPANISH PENSION

How many years do I have to work in Spain to get a pension?

What’s the minimum number of years you have to work in Spain before you can retire? And how about if you want to get a full state pension? Here’s what you need to know. 

How many years do I have to work in Spain to get a pension?

Before we get into the details of retiring and getting a pension in Spain, there’s a word you need to familiarise yourself with: cotizar

Cotizar is a verb which means to make or pay contributions, in the sense of paying tax into Spain’s social security system (la seguridad social). There’s also the noun cotización used to refer to these social security contributions. We mention this early on as when you deal with Spain’s social security system, these words will always come up.  

How long do you have to work in Spain to get a pension?

The minimum number of years you must have worked in Spain (the minimum period of contributions) before you can retire and access a state pension in Spain is 15 years. 

To claim a full Spanish pension, you must have worked and contributed for at least 36 years, although this figure will increase to 37 years by 2027.

If you want to have an idea of how many years you have worked, and how long you have left before being able to get a Spanish pension, the easiest way to find out is by checking your vida laboral (working life) profile here.

Logically, fewer years working and paying into the system means that you will get a smaller pension. 

It isn’t possible for us to give you an exact idea of how much money you can expect to receive as a Spanish pension because it depends on factors such as how much you earned/contributed, the regulatory base, voluntary or involuntary early retirement among a number of other considerations. 

These calculations also change on a yearly basis, but to give you an idea, the maximum contributory pension set by the Spanish government in 2022 is €2,819 gross in 14 payments (one for every month of the year plus 2 extra). 

If you haven’t made enough social security contributions throughout your working life in Spain as a result of not earning enough or having an unstable working life, you could still claim a non-contributory pension, which in 2022 amounts to around €491 a month. 

One of the best ways to find out how much you are likely to get as a pension is by using some of the online calculators that do all the work for you, such as this one

The average monthly pension in Spain in 2021 was €1,189 a month, a figure which has increased from €722 in 2006.

If you have many years until you retire in Spain, keep in mind that it’s a well-known fact that the country’s ageing population is putting increasing pressure on the social security system and this is likely to have a big impact on pensions in the long run.

In other words, the figures mentioned above may well be very different in a decade or two, and considering a private pension plan could also be wise to secure your future in old age. 

SHOW COMMENTS