Self-employed in Spain: How to calculate your pension
As with most things related to 'autónomo' work in Spain, the pension amount and the way of calculating what you will end up getting every month upon retirement is different to salaried workers.
Pensions for the self-employed in Spain are 40 percent lower on average than that of regular employees.
This is for a number of reasons, primarily the contribution base they were paying in whilst working, but also how the calculation is carried out and how the contribution system for autónomos works.
The legal retirement age in Spain is set at 66 years and four months for those who have contributed less than 37 years and three months, a figure that will rise to reach 67 in 2027. You can also retire at 65, but only when you have worked for (and made social security contributions) 37 years.
For self-employed people in Spain, things can be a little bit different. Self-employed workers can apply for voluntary early retirement up to two years before the legal age, but doing so would mean giving up part of your pension.
The amount you lose from your pension by taking early retirement (whether at aged 64 or 65) will depend on how long you have been making social security contributions in Spain.
To access the contributory pension system in Spain you must have contributed a minimum of 15 years. Those who do not reach that figure can instead get a non-contributory pension.
How to calculate your self-employed pension in two steps
Find out your regulatory base
Firstly, you need to figure out your regulatory pension base. The regulatory basis is essentially the information on which your pension will be calculated. You can charge it in full or just a percentage of it.
To calculate the regulatory base of the pension, you have to add your last 300 months of contributions and divide it by 350.
As of 2024, pension reform implemented by the government will slightly change the formula. From 2024, the number of years taken into account will increase at the rate of six months per year to reach 29 years in 2044.
On the other hand, Spain's social security system will choose the best option between the new formula and the last 29 years minus your two worst contributory months. From 2044 the second option will be the one that is applied by default.
READ ALSO: Key points: What you need to know about Spain's new pension reform
Apply the regulatory percentage
The regulatory base is not the pension you will receive. A series of percentages are then applied to that amount depending on the number of years you have contributed.
You will only receive 100 percent of your potential pension pot if you have worked for more than 36 years and 7 months. If you didn't, you will receive a percentage of your regulatory base.
The percentage of the contributory pension as a self-employed person starts at 50 percent. To access it, like regular workers, you will need a minimum of 15 years of contribution. From there, each year of additional contribution will add an extra percentage until it reaches 100 percent.
This percentage is not added evenly, however. The first 49 additional months (equivalent to just over 4 years), add up to a higher percentage than the ones after that threshold. For each month up to that figure you will add 0.21 percentage points to the pension up to 10.29 percent more.
The rest up to 36 years and three months will add up to 0.19 points each. For example, a retirement pension with 20 years of contributions will have a regulatory percentage of 64.28 percent. That percentage increases with 25 years of contributions and also with 35 years of contributions.
What happens if my pension is very low?
In the case of contributory pensions for the self-employed, if the pension pot does not reach the minimum you may request a minimum supplement of up to €400 per month.
Self-employed workers who do not make 15 years of contributions will have to settle for the non-contributory pension, which is much lower than the contributory one.
How much does a self-employed person receive in pension payments?
The big question: how much do the self-employed get in Spain? According to InfoAutonomos, an advice website for the self-employed people in Spain, the average monthly pension payout for a self-employed person in Spain in 2022 was around €830.
Although retired self-employed in Spain are receiving an average of €250 more per month of retirement than they were a decade ago, that is still well below the pension rates of employees contributing under the standard pension system (régimen general), who receive almost €600 more on average per month.
This is largely due to the fact that most self-employed people paid in lower contributions during their working life. That is, the vast majority of the self-employed contributed the minimum base level and, consequently, end up having a smaller pension pot when they retire.
READ ALSO: Long hours and little pay: What it's like to be self-employed in Spain
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Pensions for the self-employed in Spain are 40 percent lower on average than that of regular employees.
This is for a number of reasons, primarily the contribution base they were paying in whilst working, but also how the calculation is carried out and how the contribution system for autónomos works.
The legal retirement age in Spain is set at 66 years and four months for those who have contributed less than 37 years and three months, a figure that will rise to reach 67 in 2027. You can also retire at 65, but only when you have worked for (and made social security contributions) 37 years.
For self-employed people in Spain, things can be a little bit different. Self-employed workers can apply for voluntary early retirement up to two years before the legal age, but doing so would mean giving up part of your pension.
The amount you lose from your pension by taking early retirement (whether at aged 64 or 65) will depend on how long you have been making social security contributions in Spain.
To access the contributory pension system in Spain you must have contributed a minimum of 15 years. Those who do not reach that figure can instead get a non-contributory pension.
How to calculate your self-employed pension in two steps
Find out your regulatory base
Firstly, you need to figure out your regulatory pension base. The regulatory basis is essentially the information on which your pension will be calculated. You can charge it in full or just a percentage of it.
To calculate the regulatory base of the pension, you have to add your last 300 months of contributions and divide it by 350.
As of 2024, pension reform implemented by the government will slightly change the formula. From 2024, the number of years taken into account will increase at the rate of six months per year to reach 29 years in 2044.
On the other hand, Spain's social security system will choose the best option between the new formula and the last 29 years minus your two worst contributory months. From 2044 the second option will be the one that is applied by default.
READ ALSO: Key points: What you need to know about Spain's new pension reform
Apply the regulatory percentage
The regulatory base is not the pension you will receive. A series of percentages are then applied to that amount depending on the number of years you have contributed.
You will only receive 100 percent of your potential pension pot if you have worked for more than 36 years and 7 months. If you didn't, you will receive a percentage of your regulatory base.
The percentage of the contributory pension as a self-employed person starts at 50 percent. To access it, like regular workers, you will need a minimum of 15 years of contribution. From there, each year of additional contribution will add an extra percentage until it reaches 100 percent.
This percentage is not added evenly, however. The first 49 additional months (equivalent to just over 4 years), add up to a higher percentage than the ones after that threshold. For each month up to that figure you will add 0.21 percentage points to the pension up to 10.29 percent more.
The rest up to 36 years and three months will add up to 0.19 points each. For example, a retirement pension with 20 years of contributions will have a regulatory percentage of 64.28 percent. That percentage increases with 25 years of contributions and also with 35 years of contributions.
What happens if my pension is very low?
In the case of contributory pensions for the self-employed, if the pension pot does not reach the minimum you may request a minimum supplement of up to €400 per month.
Self-employed workers who do not make 15 years of contributions will have to settle for the non-contributory pension, which is much lower than the contributory one.
How much does a self-employed person receive in pension payments?
The big question: how much do the self-employed get in Spain? According to InfoAutonomos, an advice website for the self-employed people in Spain, the average monthly pension payout for a self-employed person in Spain in 2022 was around €830.
Although retired self-employed in Spain are receiving an average of €250 more per month of retirement than they were a decade ago, that is still well below the pension rates of employees contributing under the standard pension system (régimen general), who receive almost €600 more on average per month.
This is largely due to the fact that most self-employed people paid in lower contributions during their working life. That is, the vast majority of the self-employed contributed the minimum base level and, consequently, end up having a smaller pension pot when they retire.
READ ALSO: Long hours and little pay: What it's like to be self-employed in Spain
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