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The new contribution system for the self-employed, based on net returns:
✔It will be effective in 2023 as a result of the agreement between the Government, different social partners and self-employed organisations.
✔For the self-employed with lower incomes, it will mean a reduction in their quota of more than 30% compared to the current one.
✔Those who have incomes below the SMI, among which many young people and women, will pay fees between 200 and 260 euros per month in 2025.
NEW CONTRIBUTION SYSTEM FOR SELF-EMPLOYED WORKERS
The Government has approved in the Council of Ministers the Royal Decree-Law establishing a new contribution system for self-employed workers, based on net income.
This reform, which will be effective in 2023, is the result of the agreement reached by the Ministry of Inclusion, Social Security and Migration, with the social partners CEOE, Cepyme, CCOO and UGT, and with the self-employed organisations ATA, UATAE and UPTA.
This reform complies with the recommendations of the Toledo Pact, which were approved by the plenary session of Congress almost unanimously, and the tripartite social agreement of July 1 signed by the Government and the social partners. It is also a commitment included in the Recovery, Transformation and Resilience Plan within component 30.
NEW CONTRIBUTION SYSTEM FOR SELF-EMPLOYED WORKERS
The Government has approved in the Council of Ministers the Royal Decree-Law establishing a new contribution system for self-employed workers, based on net income.
This reform, which will be effective in 2023, is the result of the agreement reached by the Ministry of Inclusion, Social Security and Migration, with the social partners CEOE, Cepyme, CCOO and UGT, and with the self-employed organizations ATA, UATAE and UPTA.
This reform complies with the recommendations of the Toledo Pact, which were approved by the plenary session of Congress almost unanimously, and the tripartite social agreement of July 1 signed by the Government and the social partners. It is also a commitment included in the Recovery, Transformation and Resilience Plan within component 30.
New system
In the first place, the reform establishes that in the next three years a system of fifteen tranches will be progressively deployed that determines the contribution bases and the quotas based on the net income of the self-employed, as a transition to the definitive model of contributions for real income that it will take place in nine years at the latest.
In addition, the concept of net returns is defined, essential for the implementation of the new system. In this way, the net returns will be calculated by deducting from the income all the expenses produced in the exercise of the activity and necessary for the self-employed to obtain income. On that amount, a deduction for generic expenses of 7% (3% for self-employed companies) is additionally applied. The result will be the net returns and that will be the figure that will determine the contribution base and the corresponding fee.
This enables a system that allows the self-employed to change their quota based on their net income forecast (discounting the costs of carrying out their activity) up to six times a year. At the end of the fiscal year and once the annual net yields are known, the contributions will be regularised, returning or claiming instalments in the event that the definitive net yield tranche is below or above that indicated by the forecasts during the year. The monthly contributions to Social Security will range from 230 euros per month to 500 euros per month in 2023 and from 200 euros per month to 590 euros per month in 2025, always based on net returns.
In percentage terms, the self-employed with lower incomes will experience a reduction in their quota of more than 30% compared to the current one. Self-employed workers with earnings below the SMI, among whom many young people and women, will pay fees between 200 and 260 euros per month in 2025. That year, the average income brackets will have fees between 290 and 294 euros per month and those who earn more of 6,000 euros per month, 590 euros.
The approved text also sets a subsidised fee for new self-employed workers of 80 euros for twelve months, which can be extended to an additional twelve months when net income remains low.
The text also includes a periodic evaluation of this new system, which will be carried out within the framework of the social dialogue every three years.
protective action
In addition, the reform includes a significant improvement in the protection scheme for self-employed workers due to cessation of activity. Based on the experience of the deployment of benefits during the pandemic and the eruption of the Cumbre Vieja volcano in La Palma, the modalities of cessation of activity are expanded to improve coverage of different contingencies, such as in the event of only a partial interruption of activity , and the protection provided to wage earners by the RED mechanism established in the labor reform for situations of cyclical or sectoral crisis is adapted to the self-employed.
