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What are the social security quotes in 2023 and so on?


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New Social Security contribution for self-employed workers.

As of 1 January 2023, the contribution system for self-employed workers will be modified and will evolve progressively over 3 years until it ends in 2025.

 

The new system establishes 15 contribution base tranches with their corresponding monthly installments to be paid. Each tranche is applied on the basis of the net income obtained, as a transition to the definitive model of contributions based on actual income, which is expected to take place in nine years at the latest.


Monthly Social Security contributions will range from 230 euros to 500 euros per month in 2023, and from 200 euros to 590 euros per month in 2025, always depending on the net income obtained from the activity.

 

The 15 tranches that become effective in 2023 are the following:

 

social-security-contributions-2023-spain.thumb.png.1ef950f78ba633c68211edf9704736b2.png

 

The net income of your activity is calculated deducting from the income all the expenses incurred carrying out the same. During the calendar year you will be able to communicate to the Social Security your net income forecast, being able to communicate changes in that forecast, in order to adapt the contribution base and the contribution to be paid to your actual income.

 

The following year, and according to the net income reported to the Tax Authorities in the tax returns you have filed, the Social Security will adjust the amounts paid in the previous year, claiming the payment of additional amounts or returning the excess paid, as appropriate.

 

For example, with the data from the annual income tax and VAT statements and the income tax return for the year 2023, which are filed in January and from May to June, respectively, for 2024, the Social Security will inform you of the amount of self-employed contributions that should have been paid, and will proceed to refund the excess or require you to pay the missing difference. An important aspect to take into account is that the deadline for the Social Security to proceed with the refund without interest in your favor is until 30 April (in the example we have provided, until 30 April 2025);

 

if you have to pay more than what you have already paid, you will have a period of one month from the appropriate notification to proceed with the payment, without interest or surcharges. Right now, in view of the different deadlines in question and until all systems are working properly, our recommendation would be to estimate income slightly downwards in order to avoid overpayments of rates, since it is expected that the refunds of the excess will take some time to be made.

 

We are providing this information according to the wording of the legislation and the information circulars we have received in this regard; if there is any change in the interpretation of the legislation, we will inform you immediately.

 

There is also something to be taken into account for the calculation of your net income, in order to make your forecasts. The Social Security will apply an extra deduction of 7% as generic expenses on the amounts obtained from the Tax Authority, and will add the amount paid as self-employed contributions to the amount of income. For the so called “autónomo societario” (a shareholder of a company with the status of self-employed), the deduction is 3%, provided that they have been registered for 90 days.

 

As we mentioned in the previous paragraph, the self-employed person must inform the Social Security of his/her expected net income to be obtained during the calendar year. For 2023, as the first year of implementation of the procedure, the deadline for communicating the amount of the expected net income will end on 31 October 2023; until then, the Social Security will maintain your current contribution rate; however, please remember that it will adjust the actual amount the following year. Therefore, you will have to request the change of your contribution base and communicate your annual net income forecast, as a monthly average, which we would recommend you to do from February onwards in order to avoid a later adjustment of contributions with higher amounts.

 

If during the year you foresee a variation in your net income, you will be able to select a new contribution base every two months and, therefore, a new contribution rate adapted to it, with a maximum of six changes per year. This modification will be effective on the following dates:

1 March, if the request is made between 1 January and the last calendar day of February.

1 May, if the request is made between 1 March and 30 April.

1 July, if the request is made between 1 May and 30 June.

1 September, if the request is made between 1 July and 31 August.

1 November, if the application is made between 1 September and 31 October.

1 January of the following year, if the request is made between 1 November and 31 December.

 

Calculation of the monthly contribution to be paid to the Social Security.

Once the net income to be reported to Social Security has been determined, you will have to choose a contribution base tranche. Within the tranche you will be able to choose the amount of the contribution base; and on the chosen base, the monthly contribution to be paid will be obtained by applying 30.6%.

 

For example, we have a net monthly income of 2,000 euros. Therefore, we would be entitled to tranche 5:

5th Tranche >1,850 and 1,029.41 2,030 <= 2,030

 

If we choose the minimum contribution base (1,029.41), 30.6% of the monthly contribution would be 315 euros. If we choose the maximum base (2,030), it would be 621.18 euros. You could also choose a halfway amount of contribution base, for example, 1,800 euros with a resulting monthly contribution to be paid of 550.80 euros. Please note that there are small corrections in the percentages according to age, contribution time and other personal factors, such as pluriactivity (pluriactividad) (when you are working as employee for third parties while you are also registered as self- employed).

Remember that the contribution base you choose will determine the quality and quantity of the social benefits. That is: the higher the contribution base, the higher the benefit for the following Social Security coverage:

1) Medical leave due to common illness and non-occupational accident. 2) Medical leave due to occupational disease or occupational accident. 3) Birth and care of a minor.

4) Risk during pregnancy and breastfeeding.

5) Permanent disability.

6) Widowhood and orphanhood.

7) Cessation of activity due to involuntary causes. 😎 Retirement.

The “Autónomo societario” :

During the year 2023, if you are an “autónomo societario” i.e. a sherholder of a company (either a company director or member of a board of directors) registered as self-employed, you will pay contributions on your net income. In any case, if you have been registered in the Special Regime for Self- Employed, as a partner of a company, for at least 90 days during the calendar year, your minimum contribution base cannot be less than 1,000 euros/month, paying a monthly fee of 306 euros.

 

Flat rate and bonuses:

If you have been able to take advantage of the reduction of rates for being newly self-employed, you will continue to benefit from it under the same conditions, until the end of its maximum period of duration.

The Social Security has made available a simulator of contributions to be paid at the following link:

 

For the communication of data to the Social Security, please remember that we are an authorized firm in the RED system of the Social Security, and we can take care of the process for you. Please contact us if you need any assistance.

I'm Spanish Adviser and you can ask me any question related to Spain. Our people speak 🇬🇧 🇺🇸 🇪🇸 🇩🇪 🇫🇷 🇺🇦 🇷🇺.

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