New self-employed workers in Madrid to pay no social security tax

Madrid’s president on Monday announced that her government will cover the monthly social security fees of ‘autónomos’ that register in Spain’s capital, a decision which will save new self-employed workers hundreds of euros.

madrid social security fees self employed
Madrid has long been considered to have the most lenient tax system in Spain, and the region's president Isabel Díaz Ayuso wants to continue promoting this image. (Photo by ANDER GILLENEA / AFP)

Madrid’s right-wing regional president Isabel Díaz Ayuso on Monday promised Madrileños a number of fiscal benefits and other improvements, with the standout announcement aimed at attracting new self-employed workers to the Spanish capital.

From Q1 2023, new autónomos in Madrid will have their social security fees paid for by her government for their first year of self-employed work in the region.

If their monthly earnings are below minimum wage in the second year (€1,166 gross a month), they will also have their social security fees covered by the regional government.

Self-employed mothers who have the right to a tax reduction after returning to work less than two years after the birth or adoption of their child will also not be charged social security tax during the first two years back in self-employed work.

The standard fixed fee for newly registered self-employed workers across Spain is currently just under €70 a month for the first year of work, rising progressively to €294 a month by the end of the second year of autónomo work.

Madrid already had more beneficial fixed social security fees for self-employed workers than the rest of Spain – €50 a month for the first two years – but this new ‘zero fee’ (tarifa cero) is even more alluring as the country’s social security ministry will next year start charging autónomos based on real earnings.

Therefore, new autonómos (self-employed workers) in Madrid stand to save hundreds or potentially several thousand euros during their first year or two years of work.

FIND OUT: Will you pay more under Spain’s new social security rates for self-employed?

There are currently 419,000 self-employed workers in the Madrid Community, although it is estimated that 30,000 new autónomos will benefit from the ‘zero fee’ offering.

Monthly social security tax payments give self-employed workers in Spain access to sick pay, maternity/paternity leave, the public healthcare system and other welfare benefits. This tax is separate from IRPF, which is income tax paid on earnings.

The general consensus is that Madrid is among, if not the top region, with the most lenient tax system in the country.

READ ALSO: Why you should move to Madrid if you want to pay less tax

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Can British people in Spain claim the UK’s winter fuel payment?

In the UK, there are various benefits available to help eligible people through the cold winter months – one of which is the winter fuel payment. But can Britons living in Spain claim this benefit to cover the cost of heating their Spanish homes?

Can British people in Spain claim the UK's winter fuel payment?

Energy costs are on the up in Spain, and with the winter fast approaching the added cost of paying for heating when the mercury drops can result in some very high bills.

Not all of Spain has freezing winters but there are often cold spells and many houses in the country tend to get even colder than it is outside.

READ MORE: Why are Spanish homes so cold?

The average winter temperature across Spain is 8C (1981 to 2010 average). That’s higher than the average in other European countries, but in Spain’s interior and mountainous areas it can be truly chilly from November to March.  

That means that overall, there’s a chance you’ll need to use a radiator or the central heating to keep your Spanish home warm.

So are some of the 400,000+ UK nationals who reside in Spain eligible for winter fuel financial support from the UK?

What is the UK’s winter fuel payment?

The UK’s winter fuel payment is a tax-free payment to help older people with heating costs during the cold winter months.

Those eligible must have been born before September 26th 1956, according to the UK government website.

How much people receive depends on their age and whether anyone else in the household is also eligible, but the amount is usually between £250 and £600.

I’m a UK national living in Spain. Can I claim the winter fuel payment?

The UK government states that those living abroad can benefit from the winter fuel payment if:

  • You moved to an eligible country before 1st January 2021
  • You were born before September 26th 1956
  • You have a genuine and sufficient link to the UK – this can include having lived or worked in the UK, and having family in the UK

While many EU nations are on the list of eligible countries, such as Austria, Germany, Sweden, and Italy, unfortunately Spain is not on the list.

This means that if you live in Spain, you will not be able to claim the winter fuel payment at all, even if you meet the age conditions.

Why isn’t Spain on the eligible list of countries?

The UK government services website nidirect states that “you cannot get the payment if you live in Cyprus, France, Gibraltar, Greece, Malta, Portugal or Spain because the average winter temperature is higher than the warmest region of the UK”.

This is despite the fact that some parts of Spain are a lot colder than the average UK winter temperatures. This includes cities, towns and villages near mountain ranges such as the Pyrenees or Sierra Nevada, or regions in the interior like Castilla-La Mancha, Aragón​​ and Castilla y León.

According to the British government, during winter the average temperature is between 2 and 7 C in the UK.

READ ALSO: Where are the coldest places in Spain?

Foreigners in Spain used to be able to claim this financial benefit, but it was scrapped in 2015 after many UK taxpayers were angry that UK winter fuel payments were going to help people that lived in countries that were generally warmer than the UK.

READ ALSO: Which UK benefits can Brits keep if they move to Spain?