National insurance contributions in SpainPatrick
If you are looking for information about National insurance contributions in Spain, this guide is for you. Here you will learn what social security contributions are and how they are paid. We are experts in dealing with social security; if you have any doubts or questions, please contact an expert at Asesoria Orihuela Costa.
What are national insurance contributions in Spain?
National insurance contributions in Spain are programs designed to help people with medical care and maintain their financial stability in difficult times. These programs include unemployment insurance, health care and financial benefits for family members, among others. With social insurance, active workers receive income if they are disabled for medical reasons or are no longer able to work.
Nowadays, we see it as usual to have a range of benefits to help you overcome an accident that prevents you from working, becoming unemployed or retiring. All this is possible thanks to the contributions paid to the Social Security General Treasury. This is paid monthly by companies and the self-employed who employ workers.
By law, social security is compulsory so that workers are covered for illnesses and accidents at work. These are the contributions that companies, self-employed and workers make to the Social Security Treasury.
The payment is monthly, and the contribution is paid for various concepts:
– Common contingencies: These cover situations arising from a common illness, maternity leave, risky pregnancy, non-occupational accident and retirement.
– Accidents at work and occupational diseases.
– Vocational training
– Wage guarantee fund (FOGASA).
Who pays national insurance contributions in Spain?
Although the contributions are to cover these types of expenses in general, it is essential to know that those of companies and those of the workers are different.
Workers pay national insurance contributions for non-occupational illnesses or accidents, overtime, employment and vocational training. To do this, the company withholds a certain amount from the employee’s paycheck.
Companies pay contributions for accidents at work, occupational illnesses and FOGASA. This depends on the sum of the employees’ contribution bases and the rates applied to them.
Finally, the self-employed also have to pay national insurance contributions. It is they themselves who must make these payments.
How to calculate national insurance contributions?
The company and the employee pay monthly national insurance contributions. How to calculate social security depends on the employee’s salary, the contribution bases and the percentage applied to each base.
Contribution base for common contingencies
The contribution base for common contingencies (BCCC) calculates benefits related to permanent or temporary disability, widowhood and orphanhood resulting from common illnesses and non-occupational accidents.
It is also used to calculate maternity and paternity leave benefits and the retirement pension.
Contribution base for occupational contingencies
This calculates benefits for risk pregnancy, temporary or permanent disability, widowhood and orphanhood related to an accident at work or occupational disease. Unemployment benefit is also calculated.
When and how is social security paid?
Now that you know what they are and, in particular, how to calculate social security, it is essential to move on to the next point: social security payments are made monthly in arrears.
The following options are available to pay national insurance contributions:
– Direct debit, by direct debit, until the 20th of the month.
– Electronic payment. In this payment method, the Social Security Treasury generates the RCL with the corresponding contributions. In this case, as it is a bank transfer, the person responsible for making the transfer has until the last day of the month.
What happens if I cannot pay?
If the regulatory period established for the payment of Social Security contributions has elapsed without payment of the same and prejudice to the special provisions for deferrals, the following surcharges will accrue:
– Compliance with the obligations of article 29 of the General Law on Social Security.
– Surcharge of 10% of the debt if the contributions due are paid within the first calendar month following the deadline for payment.
– Surcharge of 20 per cent of the debt if the National insurance contributions due are paid from the second calendar month following the due date for payment.
– Failure to comply with the obligations of article 29 of the General Social Security Act
– Surcharge of 20% of the debt if the national insurance contributions due are paid before the end of the deadline for payment established in the debt claim or settlement report.
– Surcharge of 35% of the debt, if the contributions due are paid after the end of the deadline for payment.
In these cases it is important to know that we can defer payment in two different ways:
– By presenting the RNT. In this case, you are asked to pay the instalments after the end of the regulatory period, with a surcharge of 10% in the first month and 20% in the second month.
– By requesting a deferment, provided that contributions are not deferred due to accidents at work or occupational diseases.
The Social Security may refuse such a request when the deferment has already been repeatedly breached in previous cases, when the disposal of seized assets is authorised or if the debt does not exceed twice the minimum wage.
The maximum period for repaying the debt is 5 years, depending on the case and the documentation provided to the Social Security General Treasury.