reform of their contributions self-employment It enters into force on 1 January 2023. The Ministry, led by José Luis Escrivá, reached an agreement with the group’s most representative organizations last June, and the new quota system will be implemented gradually until 2025. the highest and lowest quota will be less and the gap will widen as time progresses.accordion effect‘. According to SGK’s preliminary calculations, two out of every three self-employed people will pay the same or less than the current minimum wage.
The new system represents a cultural shift for the self-employed, as they have paid the wages they have agreed so far and from 2023 they will pay the wages corresponding to their net income, i.e. income minus the calculation of justified expenses. So far, the vast majority of the group, specifically 85% of the self-employed affiliated with RETA (Special Regime for Self-Employed) currently contribute to the minimum quota. This is in 2022 294 euros There will be self-employed workers who will pay more monthly and with the new system, and others who will pay less. All this will also have an impact on the interests and rights of these workers, because the higher the contribution, the higher the benefit for cessation of activity or temporary disability will be self-employed.
How will rates change?
The share of the self-employed will depend on their net income. At the beginning of the activity, each self-employed person must estimate what the benefit will be and start paying accordingly. For example, someone with a net income of 670 euros per month or less must pay the minimum wage in 2023. 230 euroswill fall in 2024 225 euros and will stabilize in 2025 200 euros. The minimum wage is currently 294 Euros per month. And on the other side of the scale, if your benefits are 6,000 Euros or more per month, you have to pay the maximum fee. This will start in 2023 500 euroswill rise next year 530 euros and will shut down its distribution 590 euros.
Businesses can have good months and bad months, and this affects self-employed income. Therefore, with the new system; can change up to six times a year and adapt it to the state of your income. The quota may be increased during the most profitable months and lowered by the worse ones. At the end of the year they will have to report to the Treasury and will be paid or refunded with the balance of the last 12 months, depending on whether they fit well, pay their dues or go overdue.
For this State official bulletin (BOE) issued a royal decree this Tuesday along with the said regulatory changes. Another innovation in the BOE is that any new self-employed person who enrolls hereafter is required to declare estimates of “net economic returns” during the first calendar year of activity. The government’s plan is for the new contribution margin for self-employed workers to take effect from 1 January 2023.
How much will the self-employed pay more or less?
Social Security estimates two out of three people are self-employed will pay the same or less with the new contribution system. Those with lower incomes will see their contribution burden decrease, and those with higher incomes will see their contributions increase to never more than double what is available. And there will be an unbalanced effect between the middle tiers, which yield between 1,300 and 2,760 euros. The calculations in the table below show that the self-employed person has already paid the minimum wage, ie; 294 euros one month.
The new system aims to be more fair than the current system, but does not envisage exactly equal quotas. Well, a self-employed worker with a net income of 670 euros will be charged 200 euros, ie the equivalent of 29.8% of their benefits. A self-employed person with an income of 6,000 euros per month will be asked for a contribution of 590 euros, ie 9.8% of their benefits.
What do associations think? Will there be a deal?
“At Upta it lives up to the expectations we have set for ourselves. 2.3 million self-employed will have significant savings of between 400 and 1,200 euros per year,” said the president of Upta. Edward the abbot. “After a period of intense negotiation from Uatae we are in a position to say we have reached an agreement. We have succeeded in lowering quotas for the most vulnerable people and improving the worldwide shutdown clause”, the general secretary of the Uatae declared, Maria Jose Landaburu.