# New rates of social security contributions for autonomos



## Lynn R (Feb 21, 2014)

The Government has reached a preliminary agreement with organisations representing the self-employed on revised social security contributions, meaning that those with the lowest earnings will pay less whilst those with the highest earnings will pay more. Hopefully this will help the lowest paid.

Gobierno y autónomos ultiman un preacuerdo sobre su cotización con cuotas de entre 230 y 590 euros al mes | Economía | Cinco Días (elpais.com)


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## alex T. (10 mo ago)

Hello, I am pretty ignorant of the autonomo status. I know all freelance or self-employed need to be autonomo. 
does this mean every month they have to pay between 230 to 590 out of pocket for their social security?
What else do they need to pay ? Is there an ENGLISH page somewhere that explains the total costs? Many thanks.


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## kaipa (Aug 3, 2013)

Basically yes. As it stands autónomos have to cover their own SS contributions which is roughly 270 euros for the lowest earners. There is a 2 year period where this payment is heavily discounted. However as the OP has pointed out there is now a move to reform this so that very low earners will pay less. The problem for many is that the monthly payment ( at present) is not linked to earnings meaning that for some people their monthly incomes could easily be less than 1.000 euros and therefore 1/3 of that being paid for SS is a tough one. The reason it comes up here alot is that foreigners with little Spanish can find the being self employed appears a good way of making a living ( especially English teachers who can find private students). Anyway this seem like good news.


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## dancingspider (Mar 4, 2018)

Must agree, a sliding scale of contributions, based on income, seems much fairer, than the flat rate applied to all, currently.


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## alex T. (10 mo ago)

Hello, so say someone does NOT become autonomo. Gets cash for menial work. That seems to be common. I know a lady who cleans homes and is not autonomo. So how does the government catch such people? Is it a serious crime?


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## kaipa (Aug 3, 2013)

alex T. said:


> Hello, so say someone does NOT become autonomo. Gets cash for menial work. That seems to be common. I know a lady who cleans homes and is not autonomo. So how does the government catch such people? Is it a serious crime?


Well it is illegal and is more easily checked than a few years ago. Cleaners probably get cash but it will just be 10 euros for an hour in one place. Anyone making a living from cleaning would probably need clients who would need receipts so it gets hard to do. Similarly teachers would bill per month and clients who are online will do card or transactions.


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## Lynn R (Feb 21, 2014)

alex T. said:


> Hello, so say someone does NOT become autonomo. Gets cash for menial work. That seems to be common. I know a lady who cleans homes and is not autonomo. So how does the government catch such people? Is it a serious crime?


Whether caught or not, they end up in poverty in old age because they have not paid Social Security contributions to be eligible for a pension. There is a non contributory minimum pension but it is derisory, less than €500 per month.


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## kaipa (Aug 3, 2013)

Lynn R said:


> Whether caught or not, they end up in poverty in old age because they have not paid Social Security contributions to be eligible for a pension. There is a non contributory minimum pension but it is derisory, less than €500 per month.


Are you sure about a minimum? I had my forecast last month and its 270 euros plus I have to work to 70 to get it- so it sounds strange that someone with no contributions would get twice the amount of mine? And 4 years earlier?


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## Barriej (Jul 23, 2012)

alex T. said:


> Hello, so say someone does NOT become autonomo. Gets cash for menial work. That seems to be common. I know a lady who cleans homes and is not autonomo. So how does the government catch such people? Is it a serious crime?


I sell the odd bit of artwork and even with the new rules, becoming autonomo would be a complete waste of money. 
I keep a record of the sale and gave this to the accountant to put on my return in the 'other income' boxes on the return. 

To say he was surprised that I would do this was an understatement. He exclaimed that while it was good that I was prepared to pay tax, I was in a minority here and he doubted anyone would care. We are talking about €300 income. 
The amounts are small but include a payment from my old business my son now runs. 

If the system was more like the UK I would happily register as self employed.


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## Lynn R (Feb 21, 2014)

kaipa said:


> Are you sure about a minimum? I had my forecast last month and its 270 euros plus I have to work to 70 to get it- so it sounds strange that someone with no contributions would get twice the amount of mine? And 4 years earlier?


Imserso. Instituto de Mayores y Servicios Sociales :: Actualización de las pensiones para 2022

Pensión No Contributiva en España ▷ Actualizado 2022 (conceptosjuridicos.com)

Presumably you will also have pension entitlements from other countries you worked in before coming to Spain?


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## Barriej (Jul 23, 2012)

Lynn R said:


> Whether caught or not, they end up in poverty in old age because they have not paid Social Security contributions to be eligible for a pension. There is a non contributory minimum pension but it is derisory, less than €500 per month.


Wow that's not too bad as that's about half the oap from the uk for doing nothing... 
I paid 42 years with some contracted out and will only get €130 a week from the UK. 

Can't see that it's worth my while becoming autonomo as, at 60 this year I will never contribute enough for the pension and the convenio would be cheaper at €65 a month.
Not worth paying even the new rate just to get healthcare


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## kaipa (Aug 3, 2013)

Lynn R said:


> Imserso. Instituto de Mayores y Servicios Sociales :: Actualización de las pensiones para 2022
> 
> Pensión No Contributiva en España ▷ Actualizado 2022 (conceptosjuridicos.com)
> 
> Presumably you will also have pension entitlements from other countries you worked in before coming to Spain?



Ahh yes. However it has conditions as it is for persons who literally have zero. In other words it appears to be means tested so it wont mean that an expat ( 10 years residency) gets it simply because they have made no contributions.


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## Overandout (Nov 10, 2012)

The case of domestic workers (cleaners) is a bit different as technically they are not "autónomo", they are emplyees of the people they work for.
If you employ a domestic worker you are required to contract them formally and make the corresponding social security payments, so its not the cleaner who would get caught, its the employer.

You can, legally, pass the responsibility for SS payemnts to the employee (effectively making them autónomo), but this must be stated in writing and signed by the employer and employee.

Sadly, many domestic employees would rather the cash in their pocket now than the contribution being paid to the SS (a case of immediate necessity over long term provision), but as long as they sign the agreement, that is their right.


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## xgarb (May 6, 2011)

The new proposals are a total joke. Why can't they do what nearly every other country does and have a sliding scale from zero up. El Gobierno propone cuotas de autónomos entre 245 y 565 euros para intentar cerrar un acuerdo

Tras la última propuesta del Gobierno, desde la Asociación de Trabajadores Autónomos (ATA) siguen mostrando su rechazo al indicar que _“es una propuesta de tramos que seguimos sin aceptar. Es inasumible para un autónomo que gana 1.700 euros tener que pagar 900 euros más de cotización al año”._ 

And why is it so high at the bottom? Because there is an army of low income autonomos in Spain paying for all the services for the workers in black who can't afford to register for tax.


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## kaipa (Aug 3, 2013)

xgarb said:


> The new proposals are a total joke. Why can't they do what nearly every other country does and have a sliding scale from zero up. El Gobierno propone cuotas de autónomos entre 245 y 565 euros para intentar cerrar un acuerdo
> 
> Tras la última propuesta del Gobierno, desde la Asociación de Trabajadores Autónomos (ATA) siguen mostrando su rechazo al indicar que _“es una propuesta de tramos que seguimos sin aceptar. Es inasumible para un autónomo que gana 1.700 euros tener que pagar 900 euros más de cotización al año”._
> 
> ...


So someone who makes approx minimum wage ( 1.100) as automino pays about a quarter of that in SS plus tax on 13.200 euros annual income. So you get around 9.760 after SS payments and then get taxed on 9.760. So all in all you probably get around 750 euros a month to live off!!. If that isnt bad enough trying to get 1.100 a month is no easy feat if you are an English teacher ( remember you need that each month. Now I would say 750 a month is not enough to feed and house a person. Then take this as an added dimension: my wife had her car broken into. Thieves broke window, stole bag with ID ( passport compulsory if you are EU with green card). To fix window 300 euros, 200 euros to get to Madrid to replace passport, 200 euros Swedish passport, a day lost work. So now a month salary would be gone if she was still automino gone but SS would still be due. Basically you can see how decent hard working people can become practically destitute. ( Fortunately I can help her out). And now we read about UK rail ticket clerks complaining about life on £33,000. Maybe they should experience life through the lens of many workers in Spain before feeling their lives are intolerable. Also it's a warning to UK nationals who wish to move to Spain. Life is hard here if you need to work and taxes are high for everyone. People who say life is grim in UK take so much for granted.


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## Barriej (Jul 23, 2012)

xgarb said:


> The new proposals are a total joke. Why can't they do what nearly every other country does and have a sliding scale from zero up. El Gobierno propone cuotas de autónomos entre 245 y 565 euros para intentar cerrar un acuerdo
> 
> Tras la última propuesta del Gobierno, desde la Asociación de Trabajadores Autónomos (ATA) siguen mostrando su rechazo al indicar que _“es una propuesta de tramos que seguimos sin aceptar. Es inasumible para un autónomo que gana 1.700 euros tener que pagar 900 euros más de cotización al año”._
> 
> ...



I completely agree, the Uk system has a minimum 'stamp' payment (although in essence the NHS is supposedly free so there is no contribution to that).
Any income over a set amount just £3.15 a week if your profits (not earnings) are above £6,725 a year.

From memory when the other half and the boy were running the cafe, they paid around £140 a year for their 'stamp' each. 
Obviously this don't get you anything except pension rights. But I would be happy to pay €50 a month to be autonomo here.
In fact there should be various systems available, 
One for young people to contribute to a pension scheme (although a private one might be better in the long term)This could be at a discounted rate until the age of lets say 35 to encourage them
One for old sods like me who already have a pension but would like the healthcare and to work legally.
One for the 'normal' self employed which had a small minimum monthly payment and then based on profit an uplift payment.

Having a SS payment just based on turnover is a silly way as I might run my business 200% more profitable than Jose* down the road, but because our turnover was the same, we would be paying the same... Nope not a good idea...

In my view and its only ever going to be a view..
Spain (and other countries) should levy a low rate to encourage people to come off 'the black' in the long run its got to be a better way than penalise those honest workers, who may decide at some point to go on the black themselves because Juan* down the road is working cash and is getting more work and charging less.

* I would have put an English name here but most we know don't even file tax returns..


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## Lynn R (Feb 21, 2014)

It is often said that the UK state pension is one of the lowest in Europe (although of course the majority of people also have workplace or private pensions). The reason for that is because they (and their employers, if they are in a job) pay lower social security/national insurance contributions than those in other countries, including Spain, do.

If Spain had a similar system, would it not lead to insufficient money being collected to fund pensions and therefore pensions having to be reduced? I can't see that being popular.

3.15 a week seems ridiculous if people can get a full state pension after paying only that amount for the required number of years.

On PAYE, I paid a hell of a lot more than that in NI (and my employers paid even more) but I only get the same state pension as somebody who paid 3.15 a week gets? That doesn't seem to me to be such a fair system, either.

Just an alternative opinion.


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## Barriej (Jul 23, 2012)

Lynn R said:


> 3.15 a week seems ridiculous if people can get a full state pension after paying only that amount for the required number of years.
> 
> On PAYE, I paid a hell of a lot more than that in NI (and my employers paid even more) but I only get the same state pension as somebody who paid 3.15 a week gets? That doesn't seem to me to be such a fair system, either.
> 
> Just an alternative opinion.


Agreed but the Uk have a massive amount of small business's, startups, people doing crafts etc compared to many other countries.
Also in the Uk if you earn less than £1,000 from these business's you don't even need to declare it.

There is a minimum amount, the £3.15 is a minimum stamp for class 2. But there are voluntary extra payments to gain more benefits (included in this extra pension credits)

For PAYE.
If you earn over £153 per week you will pay 12% on what you earn over £153 up to £805 per week. So, as an example, if you earn £300 per week, you will pay 12% on the amount of that which is over £153 – so in this case, *£147*. So your weekly NI would be 12% of £147 which is £17.64 per week.

When I was employed before we moved over my NI was around £500 a month and I will get less pension than someone who didn't work a day in their life....

Only 20% of the money provided to the NHS is from Ni contributions.

But back to the subject in hand. 
While the changes are welcome, I don't think anyone in Government really wanted to do this, it looks like they have been forced into it by various unions and trade bodies. 
And Ive just checked Spain has the highest costs for SS payments in the whole of the EU.
Twice that of German and France and over three times that in the UK and Portugal.
Almost all of the others the rate is based on profit after a set amount not on turnover or even a set amount with no earnings.

If its just to ensure that healthcare is taken care of then the Convenio is a better option, in fact private healthcare for most would be less than €1,000 a year and lets say a pension plan of the same amount would save you a grand at least if you earn enough on the black.

I will watch what the uptake is when these get into practice but I'm going to say I doubt its going to encourage many to become legal.


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## Lynn R (Feb 21, 2014)

From what I have read I thought the reform of social security contributions was one of the stated objectives of the Sanchez Government from the outset, like the labour law reforms which have been introduced recently. They may not have reformed them in the same way their political opponents would have liked to see, of course.


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## stevie.whitts (12 mo ago)

For self employed persons in Finland, there is a recommended sum based on your informed income. BUT, you can choose to pay the minimum, which many do, obviously this means your pension later in life will be a lot smaller, but also, if you're self employed at 25 years old, or even 40. There is no guarantee that you'll get what you think you've been saving for when it comes to the time when you draw that pension.


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## Megsmum (Sep 9, 2012)

Barriej said:


> Agreed but the Uk have a massive amount of small business's, startups, people doing crafts etc compared to many other countries.
> Also in the Uk if you earn less than £1,000 from these business's you don't even need to declare it.
> 
> There is a minimum amount, the £3.15 is a minimum stamp for class 2. But there are voluntary extra payments to gain more benefits (included in this extra pension credits)
> ...



I am autónomo for healthcare. If you have pre existing conditions requiring drugs.. convenio especial not that beneficial as your paying full price medications....during my cancer treatment one of my drugs costs €350 a month alone. I've never regretted going autónomo. The healthcare in Spain is excellent. I'm off sick.


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## kaipa (Aug 3, 2013)

Spain needs to address the issue of "Caja B" as they call the black economy. It was rife 20 years ago and admittedly improved under the reforms the EU imposed on various governments but it is still a problem as many businesses are still effectively using it. It is pretty much endemic and the people who gain the most are those implementing it not the workers who are really given little choice. Spain basically deals with the shortfall by taxing higher and hoping to scare honest folk into essentially filling the hole- this is why you often will find even Spanish lawyers wondering why many foreigners are so keen to declare every penny- they regard it as an unwritten rule that everyone is allowed to sail close to the wind.


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## trotter58 (Feb 8, 2017)

Lynn R said:


> Whether caught or not, they end up in poverty in old age because they have not paid Social Security contributions to be eligible for a pension. There is a non contributory minimum pension but it is derisory, less than €500 per month.


Derisory? At 115 euro per week It makes a mockery of the UK state pension.


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## Lynn R (Feb 21, 2014)

trotter58 said:


> Derisory? At 115 euro per week It makes a mockery of the UK state pension.


However, you have to remember that there is no additional help with rent (or IBI if they own a home) for pensioners on this non-contributory minimum pension, no free prescriptions (except in the Valencia region, I believe), no Winter Fuel Allowance, no Warm Homes Discount, no free bus travel (although Spanish pensioners do get reduced bus fares). Everything has to be paid for out of that small amount, and I certainly would not like to have to live on it. Any UK pensioner who has only the old basic State Pension to live on can apply for Pension Credit (probably being replaced by Universal Credit now) to bring them up to the guaranteed minimum income. My late aunt was on Pension Credit for many years before she died aged 95 (she had had to give up her job to care for my grandfather when he suddenly lost his sight, and was unable to return to work in time to build up enough NI contributions to qualify for a state pension, and this was before the days of Carers Allowance and carers having their NI contributions credited). She often said she had never been so well off. I don't think Spanish older people on less than €500 per month would say the same.

As I said in an earlier post, the British pay lower social security contributions than in most EU countries (and then complain that the state pension is so low). Seemingly they want to carry on paying lower taxes and social security which is why a majority of them keep voting for the party which promises them these things, so they can't expect anything different.


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## kaipa (Aug 3, 2013)

Lynn R said:


> However, you have to remember that there is no additional help with rent (or IBI if they own a home) for pensioners on this non-contributory minimum pension, no free prescriptions (except in the Valencia region, I believe), no Winter Fuel Allowance, no Warm Homes Discount, no free bus travel (although Spanish pensioners do get reduced bus fares). Everything has to be paid for out of that small amount, and I certainly would not like to have to live on it. Any UK pensioner who has only the old basic State Pension to live on can apply for Pension Credit (probably being replaced by Universal Credit now) to bring them up to the guaranteed minimum income. My late aunt was on Pension Credit for many years before she died aged 95 (she had had to give up her job to care for my grandfather when he suddenly lost his sight, and was unable to return to work in time to build up enough NI contributions to qualify for a state pension, and this was before the days of Carers Allowance and carers having their NI contributions credited). She often said she had never been so well off. I don't think Spanish older people on less than €500 per month would say the same.
> 
> As I said in an earlier post, the British pay lower social security contributions than in most EU countries (and then complain that the state pension is so low). Seemingly they want to carry on paying lower taxes and social security which is why a majority of them keep voting for the party which promises them these things, so they can't expect anything different.


I do agree that the UK basically wants everything. They expect low taxes ( which they have) but free high quality healthcare and higher state pensions. Unfortunately the burden of tax contributions has shifted slowly from the richest ( remember the 70s when all those big pop stars moved to US and France to escape the labour tax policy) to now the lower middle class. I find it ridiculous that some people my age ( that I know) receive benefits in various forms but will receive inheritances worth excess of £500,000 ( not that difficult given that average property prices are over £ 350,000). The fact that UK inheritance can now allow property and money up to half million tax free is bad enough but the fact the same folk who have received years of benefits are under no obligation to at least be taxed on that inheritance in lieu of the money working people have been paying them seems rather unfair.


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