The reform of the contributions of the self-employed enters into force on January 1, 2023. The Ministry led by José Luís Escrivá reached an agreement last June with the most representative organizations of the group and the new quota system will be progressively deployed until 2025. At the beginning of the same the difference between the highest and lowest odds will be less and as time progresses, the gap will widen, in an ‘accordion effect’. According to preliminary calculations by Social Security, two out of three self-employed will pay less or the same than with the current minimum fee.
The new system implies a cultural change for the self-employed, since until now they paid the quota that they decided and from 2023 will pay the one that corresponds to their net yields, that is, the calculation of income minus justifiable expenses. Until now, the vast majority of the group, specifically 85% of the self-employed affiliated with RETA (Special Regime for Self-Employed Workers) currently contribute the minimum quota. This is 294 euros per month in 2022 and with the new system there will be self-employed workers who will pay more and others who will pay less. All this will have effects also on the benefits and rights of these workerssince the higher the contribution, the greater the benefit for cessation of activity or temporary disability will be for the self-employed.
How will the odds change?
The share of the self-employed will depend on their net income. At the beginning of the activity, each self-employed worker must make a forecast of what his benefits will be and begin to pay according to these. For example, someone who has a net income of 670 euros or less per month must pay the minimum fee, which in 2023 will be 230 euros, in 2024 it will drop to 225 euros and in 2025 it will stabilize at 200 euros. The minimum fee is currently 294 euros per month. And, on the other side of the scale, if your benefits are 6,000 euros per month or more, you must pay the maximum fee. This will start in 2023 at 500 euros, will rise the following year to 530 euros and will close its deployment at 590 euros.
Businesses can go through good months and bad months and this affects the income of the self-employed. That is why, with the new system, may change up to six times a year and adapt this to the state of your income. During the months that earn the most, the quota can be raised and those that are worse can lower it. At the end of the year they will have to report to the Treasury and with the balance of the last 12 months they will be paid or returned, depending on whether they have adjusted well and have paid what they were due or have gone too far.
For this, the Official State Gazette (BOE) has published this Tuesday a royal decree with said regulatory modifications. Another novelty included in the BOE is that, from now on, any new self-employed person who registers must state your forecast “net economic returns” during the first calendar year of activity. The Government’s plan is for the new contribution for self-employed workers to enter into force as of January 1, 2023.
How much more or less will they pay?
Social Security estimates that of every three self-employed workers will pay less the same with the new pricing system. Those with lower incomes will see their contribution burden reduced and those with higher incomes will see their contribution increased, never more than double the current one. And among the middle layers, with yields between 1,300 and 2,760 euros, there will be an uneven impact. The calculations in the following table are made based on the assumption that the self-employed person currently pays the minimum fee, that is, 294 euros per month.
the new system seeks to be more equitable than the current one, but it does not stipulate fully equal quotas. Well, a self-employed worker who has a net income of 670 euros will be required a fee of 200 euros, that is, the equivalent of 29.8% of his profits. While a self-employed person who has an income of 6,000 euros per month will be required a contribution of 590 euros, that is, 9.8% of his profits.
What do the associations think?
“Meets expectations that since Upta we had put on. 2.3 million self-employed will have substantial savings of between 400 and 1,200 euros a year”, has valued the president of Upta, Eduardo Abad. “After an intense period of negotiation, from Uatae we are in a position to say that we have reached an agreement. We have managed to lower the quotas for people with the most difficulties and improve the provision for cessation of activity around the world”, declared the general secretary of Uatae, María José Landaburu.