Faqs New Self-employed Spanish National Insurance ratesPatrick
How is the self-employed national insurance rate calculated?
For the self-employed national insurance rate, the net income obtained during each calendar year from all professional or economic activities carried out will be taken into account, whether they are carried out individually or as partners or members of any entity, whether or not that entity has legal personality.
The entities of which the person is a partner or member may have legal personality, such as, for example, a limited company, or they may not have legal personality, such as, for example, a community of property.
Net income obtained from the performance of activities for which you must be registered with the National Insurance in Spain (Seguridad Social) as an employed or similar worker is excluded.
In the event of simultaneously carrying out other economic or professional activities for which you do not have to be included in the RETA (Self-employed National Insurance) as an employed or similar worker, the net income obtained is computed for the calculation of the contribution base.
The net computable income for each of the activities carried out will be calculated in accordance with the provisions of the IRPF ( Anual Taxe in Spain) regulations and with some unique features depending on the group to which they belong.
Once this income has been established, the tables established annually by law (general and reduced) will be used and a choice will be made between the minimum and maximum base, according to the corresponding income bracket, taking into account the average monthly net annual income.
Let’s look at the following example:
Let’s say you have an estimated annual income of €30,000 and yearly expenses of €10,100 (of which €3,225 is Self-employed National Insurance rates).
You will calculate the net income for the whole year by subtracting the expenses from the income. In other words:
30.000 € – 10.100 € = 19.900 €.
To this result, you must add the self-employment tax you have paid throughout the year 2022:
19.900€ + 3.225€ = 23.125 €
Now you have to take the 7% deduction for general expenses: 23.125 € x 7% = 1.618,75 €; 23.125 €-1.618,75 €= 21.506,25 €.
This €21,506.25 is your net annual income. Now you need to know your monthly payment.
To calculate them, you must divide by 365 and multiply the result by 30:
(21.506,25 / 365) x 30 = 1.767,64, €
You must consult the table with the contribution brackets to determine how much you pay monthly.
Rate to pay
< = 670
> 670 y <=900
>900 y < 1.166,70
> = 1.166,70 y < = 1.300
> 1.300 y <=1.500
> 1.500 y <=1.700
> 1.700 y <=1.850
> 1.850 y <=2.030
> 2.030 y <=2.330
> 2.330 y <=2.760
> 2.760 y < =3.190
> 3.190 y <=3.620
> 3.620 y <= 4.050
> 4.050 y <=6.000
You would be in the bracket from €1,700 to €1,850. You would be in the base €1,013.07, and the minimum self-employed national insurance rate to pay will be €310 per month.
Will there be a flat rate for the self-employed?
If you are self-employed for the first time in Spain, you can take advantage of the flat rate.
The flat rate is a one-year rebate on the self-employed contribution.
For the first year, the flat rate consists of paying €80 per month in self-employment fees.
You will have to apply for it when you register as self-employed. Logically, we will do it for you.
You can continue to enjoy the same rate the second year, but only if your income does not exceed the minimum interprofessional wage (SMI).
But BEWARE: if from the second year onwards you continue to benefit from the flat rate, and if during the year you exceed the minimum base and you do not notify the social security, they will make you pay the difference in the regularisation.
What contribution base can self-employed persons who are collaborating with family members or self-employed members of a company choose?
Collaborating family members and the self-employed corporate self-employed may not choose a base lower than the minimum base of contribution group 7 (SMI increased by 1/6). On a transitional basis and for the financial year 2023, it will not be possible to choose a base lower than €1,000. For these purposes, the ideal contribution base may not be lower than this minimum base in any case if registration is maintained for a minimum period of 90 days.
What are you entitled to with the social contributions you pay as a self-employed person or self-employed entrepreneur in Spain?
The Spanish Social Security collects all the compulsory social contributions of craftsmen and traders, company directors (directors of a company in Spain), self-employed entrepreneurs and non-regulated liberal professionals and Self-employed persons who pay social security contributions are entitled to the benefits provided by the system:
- Sick leave due to common or professional illness,
- Maternity or paternity benefits,
- Widow’s or widower’s rights in the event of termination of employment.
What contribution base may a self-employed worker choose if He/she foresees that her income will be lower than that which determines the minimum base of section 1 of the available table?
You can choose a contribution base lower than the minimum base of bracket 1 of the general table within the reduced table of bases that will be determined annually in the General State Budget Act.
These bases will be provisional until the regularisation is made according to the real net income obtained, on a monthly average basis, once they have been communicated by the Tax Authorities in the following financial year.
As a general rule, for family collaborators and for partners in capital companies and worker-owned companies, in accordance with the criteria established in Article 305 of the General Social Security Law, the provisional or definitive contribution base may not be less than the minimum base of group 7 of the General Scheme, provided that they have been registered, under any of these conditions, for more than 90 days in each year. Their net income does not imply that they fall within a section of the table that determines a higher minimum contribution base.
However, the law provides for a transitional period in which the above-mentioned groups will not be able to choose, in 2023, a contribution base of fewer than 1,000 euros.
During the years 2024 and 2025, the law also provides for applying minimum contribution bases lower than that of the aforementioned group 7.
Can the initially chosen contribution basis be changed and what will be the effects of the changes?
If it is expected that the net annual income, on a monthly average basis, will be different from that initially planned, a change of the contribution base must be requested.
You can apply for a change of the provisional contribution base up to six times a year, with the following deadlines and effects:
- 1 March, if the request is made between 1 January and the last calendar day of February
- 1 May if the application is made between 1 March and 30 April.
- 1 July, if the application is made between 1 May and 30 June
- 1 September, if the application is made between 1 July and 31 August
- 1 November if the application is made between 1 September and 31 October
- 1 January of the following year if the application is made between 1 November and 31 December.
- 1 January of the following year if the application is made between 1 November and 31 December.
How will Spanish national insurance regulate the self-employed’s contribution?
At the end of the year, the AEAT (Spanish HMRC) will pass the data on your net income to Social Security.
In February of the following year, the Treasury will already have this information from your different quarterly and annual tax returns.
And, based on this information from the tax office, Social Security will regularise the payment of your self-employed contributions.
Regularising means :
If you paid less self-employed contribution during the year than you should have according to your net income, Social Security will demand the difference from you.
And if you paid more than you should have, Social Security will refund the difference.
In the first case (you have to pay the difference), you will receive a notification, and you will have until the last day of the following month to make the payment.
Social Security will pay you the difference before 30 April in the second case.
IMPORTANT: If Social Security demands the difference because you have paid less than the amount due, THERE IS NO SURCHARGE.
What does carry a surcharge is if you do not pay the difference within the established period. The percentage of the surcharge: 10% of the amount to be paid during the first month and 20% from the second month onwards.
What is the deadline for self-employed workers who are registered on 31 December 2022 to notify the TGSS of their expected net income to be obtained during 2023?
Self-employed workers must report this income at the time when they foresee that the contribution base for which they are paying contributions is lower than the minimum or higher than the maximum determined by the income to be obtained.
However, in the event that the above circumstances do not apply, self-employed workers must, in any case, report this expected net income before 31 October 2023.
How is the income to be taken into account in the regularisation of the self-employed quota by the administration calculated?
Generally, the income from all economic, business or professional activities carried out in each financial year, either as an individual or as a partner, will be calculated.
The computable income will be calculated in accordance with the IRPF rules:
Net income + Amount of SS contributions
Previous net income
Previous net income reduced (agricultural, forestry and livestock farming activities).
Income from work derived from the activity in the company.
Income from capital (in cash or in kind) derived from shares in the company.
Income from work derived from the provision of services to the cooperative Income derived from their status as worker-members.
Civil, collective, limited partners, worker and community members:
Income from economic activity (attribution of income) Income derived from their status as worker-members.
Based on this income, the monthly average is calculated, i.e. the net annual income is divided by the number of days of effective registration (not including those days during which the employee receives social security benefits or other days that have been taken into account for the calculation of the regulatory base for these benefits), deducting 7% as general expenses in general and 3% in the case of commercial and worker partners.
The result of this operation is multiplied by 30 to obtain the average monthly real net income.
Have I been or am I a beneficiary of a SS financial benefit in the financial year to be regularised, are the financial benefits received also regularised?
No. The periods of receipt of SS financial benefits and the months that have been taken into account for the calculation of the regulatory base of the same are not subject to regularisation and are consolidated as definitive bases for the self-employed contribution.
For this reason, there is no need to review the benefits. The contribution base becomes definitive.
To which self-employed persons do the additional deduction for general expenses of 3% apply instead of 7%?
Self-employed persons who have been registered for at least 90 days during the year as corporate self-employed persons in both capital and labour companies.
For the calculation of the 90 days of registration as a company, the days of registration in either of the two cases are added together.
Once the amount of income has been set, how are the final contribution bases determined after the adjustment process?
The adjustment will be based on the provisional contribution base, as a monthly average, for which contributions have been paid during the corresponding year:
If the provisional contribution base, on a monthly average, is lower than the minimum contribution base established for the net income obtained, the final contribution base will be the minimum base, and the difference between the provisional contribution base and the minimum base must be paid.
If the provisional contribution base, on a monthly average basis, is between the minimum and maximum contribution base established for the net income bracket, the provisional contribution base shall automatically become the definitive contribution base without any difference in contributions having to be paid or refunded.
If the provisional contribution base, on a monthly average basis, is higher than the maximum contribution base established for the net income bracket, the final contribution base shall be that maximum base, and the difference between that maximum base and the provisional contribution base shall be refunded automatically.