On Thursday, the Congress of Deputies is debating and voting on royal decree 13/2022, issued on July 26, which introduces a new contribution system for self-employed individuals and freelancers. The reform also strengthens protections during cessation of activity. The decree emerges from an agreement between the Government and social actors, signaling a cultural shift that will require affiliates to adapt. A practical challenge for many freelancers will be calculating and reforming their quotas. Starting in 2023, every self-employed person will contribute based on their actual income, measured as net income or real income through the Social Security system. The new quota framework will span from a minimum of 230 euros to a maximum of 500 euros. Preliminary ministry calculations suggest that three out of four freelancers will pay the same or less than before, while the remaining one fourth may see higher mandatory contributions.
Previously, self-employed workers paid monthly contributions according to their own choices, independent of assured income levels. Unlike wage earners, where payroll determines a portion of personal income tax, freelancers faced a different dynamic. Many chose the minimum quota of 294 euros, either because their income did not support higher contributions or because they preferred to keep more money for current expenses and investments. From 2023 onward, the amount each freelancer pays will depend on the net returns of their activities, aligning with a simplified benefits approach.
How will these net returns be calculated?
The guiding idea of the reform is to add income and subtract expenses before applying a fixed table defined by Social Security, with 15 brackets established by the government and reviewed annually in the General Budget. Self-employed workers will pay less in lower brackets and more in upper brackets. A notable point raised by self-employed associations is that income and expenses are calculated on an annual basis, while the contribution is assessed monthly. For example, if a freelancer’s monthly net income (income minus expenses) falls below 670 euros, the contribution for 2023 would be 230 euros.
The essential lever in the new system is the deductible expenses, since income alone does not tell the full story. Income represents earnings from economic activities and the freelancer’s work, but deductions shape the final contribution amount.
What expenses are deductible?
Under the reform, expenses already accepted by the Treasury will be counted as deductible, provided they meet three criteria: they are connected to the economic activity, they are defensible, and they are properly recorded in accounting. Classic examples include purchases of materials or raw inputs, salaries of workers involved in the activity, rental costs for premises or equipment, services paid to other companies, financial expenses, or depreciation values, among others.
When a freelancer has deductible income and expenses for the year, an additional 7% of these expenses can be treated as “barely deductible” without needing to credit them separately. This extra allowance is designed to smooth spending and, in effect, reduce monthly wages. It is a mechanism introduced by the Government to encourage broad agreement among social partners.
Can you change the fee?
The quota is officially adjustable and freelancers can estimate their expected income, making voluntary election possible. If actual earnings turn out higher than anticipated, the Treasury will assess the corresponding additional contributions. Conversely, if a freelancer’s estimated contributions were too high, they can request a refund of the difference at year’s end. The reforms allow adjustments that can be made up to six times a year to reflect the evolving business reality.