Starting from the beginning of 2023, the Ministry of Participation, Social Security and Migration introduced a notable change to worker payrolls: a new tax aimed at stabilizing retirement spending. All signs point to continued application in 2024.
The measure is part of the pension reform approved by the Government in 2022. It affects the payroll of every employee enrolled in Social Security and funds the pensions for retirees through the Intergenerational Equality Mechanism (MEI). In Spain, the MEI is a payroll tax designed to support pension payments across generations.
As announced in the Official State Gazette (BOE), the MEI rate applied to payrolls in 2023 stood at 0.6%. Projections indicate the rate will increase through 2050. This mechanism was created to cover the pensions of the so‑called baby boom generation who will retire in the coming years.
MEI rises in 2024
The table below shows that next year the MEI rate will be 0.7% starting January 1, 2024. It applies to the payroll of all employees, independent of age or salary. The split remains 0.58% paid by the employer and 0.12% paid by the employee, with gradual adjustments planned over time.
Over the next seven years, the rates will increase toward 2030, after which they are expected to stabilize for two decades. The distribution between company and worker follows a pattern that changes only slightly: from that date onward, the employer bears 0.60% and the employee 0.60% of the MEI.
It is important to note that this rate is also applied to workers covered under SSI. Additionally, self‑employed individuals will face the Intergenerational Equality Mechanism with a fixed quota, calculated at 5 euros per month.