Will you pay more under Spain's new social security rates for self-employed?

Autónomos or the self-employed in Spain have it tough, having to pay one of the highest social security contributions in Europe, on top of income tax. However, this is all about to change. For some it will mean they will end up paying less in social security fees, but for others it will mean paying considerably more, making the situation even tougher.

Currently, autónomos have to pay a minimum contribution base of €294 per month after they have been registered as self-employed for two years, regardless of how much they earn.

For the first year, they will pay €60 a month, and during the second year it rises progressively to reach €294.

But this is all set to change because from 2023 they will pay new rates. 

READ ALSO - CONFIRMED: Spain's new tax rates for the self-employed from 2023 onwards

Instead of there being a fixed rate of €294, the fee will go down progressively to €200 a month for lower earners and progressively higher - up to €590 a month - for higher earners.

Spain's Ministry of Employment and Social Security will also change the rates for each group of earners every year. So far they have revealed what these rates will be for the years 2023, 2024 and 2025. 

Find out below if this means that you will be paying more or less in social security fees from next year.

Essentially this shows that anyone earning under €1,300 per month will be paying less in social security fees, with those earning €1166.70 to €1,300 a month paying just €3 less than they do now.

Those earning between €1,300 and €1,700 will pay the same amount as they do now – €294 per month, while anyone earning over €1,700 will be paying more.

According to the government, of the three million self-employed workers in Spain 2.4 million earn under €1,700 per month, meaning that the majority will see their social security contributions staying the same or reduced.

They say that these changes will benefit two out of every three self-employed people in Spain.

While this is of course good news, it’s the mid to high earners who will be affected by the changes the most.

High earners, those earning €4,000 per month will have to pay out €300 or more in social security fees, but it’s mid earners that will end up being the worst off.

For example, an autónomo who is just starting to be financially stable and earning €2,030 per month will end up paying €390 per month by 2025, which is €76 more than they currently pay.

It means that autónomos may not want to take on more work for fear that it will push them over the threshold and they’ll have to pay more in fees and it may also encourage more people to be paid under the table, referred to as 'trabajo en negro' or 'working in the black' in Spain.

Self-employed in Spain already pay some of the highest contributions in Europe

Many self-employed people in Spain already believe the system is unfair because they pay a lot more in social security contributions than their European neighbours, and many are now set to pay even more.

In Germany for example, a self-employed worker with a monthly income of less than €1,700 pays nothing. Anyone earning over this amount pays a fee of €170.

In the UK, national insurance contributions start at £3.05 a week, or £158.60 a year. Those earning over £9,568 will pay 9 percent on profits up to £50,270 and 2 percent more on profits after that.

More benefits

While those in Spain do end up paying more, they also gain more too. Health care, sick pay, maternity and paternity benefits and pensions are all available to self-employed workers here.

This is not the case in many other European countries, who may have to pay extra for health insurance or do not get any maternity or paternity benefits if they’re self-employed.