Self-employed workers will pay Social Security based on real income

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1. Self-employed workers will no longer freely choose their contribution base. They will contribute based on their annual net income, choosing a provisional base within bands set each year in the State Budget Act. Bases will later be adjusted once the tax agency reports actual income.
2. The new system will roll out gradually between 2023 and 2031, over up to nine years, with reviews every three years. From January 1, 2032, final contribution bases will be set according to annual net income.
3. Protection for ending business activity is expanded. New qualifying causes include a 60% cut in working hours or suspension of contracts for 60% of the workforce, and debts of self-employed workers without employees exceeding 150% of their income, with sales drops of 75%. In these cases there is no need to close the business, and the benefit is compatible with continuing activity.
4. Two new benefits are created for self-employed workers in sectors affected by the RED employment flexibility mechanism, in its cyclical and sectoral modes. They consist of an economic benefit (50% or 70% of the regulatory base) and payment by the managing entity of half of the worker's Social Security contributions.
5. The figure of the part-time self-employed worker is eliminated, and a reduced contribution is created for those starting self-employed activity. Between 2023 and 2025 that payment will be 80 euros per month.
6. A 75% bonus on the common contingency contribution is added for self-employed workers receiving the benefit for caring for a child with cancer or another serious illness.
7. Lower-income self-employed workers who were registered as of December 31, 2022 are guaranteed a minimum base of 960 euros for pension calculation purposes, for six months in 2023 and six more in 2024, even if they choose a lower base.
8. All self-employed workers will be required to file their income taxincome tax The personal income tax (IRPF in Spain): what people pay on what they earn from work, business or savings. return, even if their income is below the general filing thresholds.

Who it affects

• Self-employed workers, whose Social Security payments will change.: They will contribute based on real income, with later adjustments, and can access reduced payments and bonuses.
• Self-employed workers in financial trouble who reduce activity or accumulate debts.: They can receive the benefit for ending activity without closing the business and combine it with their activity.
• Self-employed workers in sectors affected by the RED mechanism.: They can access new benefits to sustain their activity.
• Self-employed workers caring for children with cancer or serious illness.: They will get a 75% bonus on their contribution while receiving the care benefit.
• Family collaborators, company partners, and members of Catholic consecrated life institutes.: They have special minimum contribution base rules or are excluded from the income-based system.

Words worth knowing

Base de cotización (contribution base)

The amount on which Social Security payments are calculated and, later, benefits.

Cese de actividad (end of activity)

The situation of a self-employed worker who stops or reduces their activity, similar to unemployment for employees.

Mecanismo RED (RED mechanism)

A tool that allows companies or sectors in difficulty to suspend or reduce activity, with benefits for those affected.

Regularización (adjustment)

A later adjustment of payments made once the year's real income is known.

Salario mínimo interprofesional (minimum wage)

The lowest wage that can legally be paid in Spain.

income tax

The personal income tax (IRPF in Spain): what people pay on what they earn from work, business or savings.

It summarizes the law as published in the BOE. It is written by artificial intelligence and may contain mistakes: the official text is what counts. Read the official text · How we make summaries