The new reform of the Turkish Armed Forces pensions This will mean increased costs, especially for larger companies, and they will have to pay for problems they haven’t paid for so far. Employer CEOE He issued a statement strongly criticizing the conditions proposed by the Minister of Inclusion, José Luis Escrivá, and said “more front opposition“. And the Government intends to support the future. Sustainability The system makes a greater economic effort on behalf of companies, through an increase in maximum bases, an additional tax on higher salaries, and another additional tax that will cause companies as a whole to pay more for all workers. for salaries paid at the end of the month.
According to calculations made by the Ministry of Inclusion and Social Security, the labor cost of companies will increase by 1.6% when the reform is fully implemented. In other words, based on the latest data from the INE Labor Cost Survey, which sets the companies’ labor cost at an average of 2,754.75 Euros per month per employee, companies will pay an average of 44 Euros more per employee. month or what is the same thing 529 Euro per employee per year.
” collection gluttony The government, through populist proposals like this, will undermine companies’ efforts in wage negotiations, because workers who are most burdened by their contributions will see some of their wage increases absorbed,” noted the CEOE in a statement. What changes does the reform bring for businessmen?
Raising the max soles
The first of these, and the one that will incur the greatest cost for companies, is the increase in the maximum contribution bases. Currently, wages in Spain are not listed due to their total integrity and there is a limit to which they are exempt from tax. Specifically, the public treasury only 4,495,50 € monthly, from then on the salary ceases to contribute and this means cost savings for the company. The approach of Social Security is to gradually raise this ceiling, to earn higher incomes and to imitate other countries in the world. European Union (EU), where wages are fully taxed. At present, according to the Executive’s own calculations, approximately 1.2 million workers Those who do not contribute to the integrity of their salary throughout Spain.
accepted offer between PSOE And United We Can It designs a gradual and planned increase of these maximum bases. So far, the maximum bases have increased each year, some years very little, some more, depending on the cash and interest needs of each Manager, according to the provisions of the Government. Now Escrivá proposes to create a predictable calendar, on which the increase will begin from 2024. It will increase each year as the CPI rises – as does the amount of contributory pensions – plus an annual increase of 1.2%. In this way, the current maximum floor will accumulate a 38% increase over the 2050 horizon, according to sources familiar with the conversations that the update from the CPI should be added.
New quota for high salaries
An increase in contribution bases will not be the only way to increase the income Social Security expects. And the bases will rise, but a full decline will not be achieved, meaning that the high salaries will be given exactly as Unidas Podemos and the unions demanded from Escrivá. Escrivá devised a rate that he baptized to supplement the revenue from the public treasury and to do this with the philosophy of taxing the hitherto untaxed “solidarity” He will manage the percentage of salary above the maximum floor that will remain neutral.
For example, a salary of 100,000 euros per year is currently listed as up to 53,946 euros and 46,054 euros is unlisted. The “Solidarity” rate will tax these 46,054 euros and do so through a percentage that will increase over time. It will start at 1% in 2025 and will grow by 0.25% each year until it reaches 6% by 2045. Contrary to what was originally expected, this surcharge will be permanent, not temporary. In addition, the application will not entitle the worker to raise the maximum pension.
This quota will likely have more impact. big businesses, where there is a higher percentage of higher salaries than in SMEs. And also in the public administration itself, where employees earn more than 46,054 euros per year in certain administrative categories.
Temporary surcharge extends to 2050
This came into effect as baptism of 2023 Intergenerational Equality Mechanism (MEI) an additional 0.6 point to employee contribution and is mainly borne by the company. This surcharge has been in effect since this year and is expected to remain in effect until 2032. Social Security calculates that this brings about 2,700 million euros a year into the public coffers and is now preparing to increase this tax. Escrivá’s idea is to double that 0.6 points to 1.2 points, with one going to companies and 0.2 to workers.
The MEI is not only increasing in quantity but also lengthening over time as something the European Commission has requested from Spain. Specifically, the Escrivá reform moves it away from the current 2032 horizon. 2050.