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Q&A: How will Spain’s new social security system for the self-employed work?

The Spanish government announced new tax rates for the self-employed from 2023, but many "autónomos" are confused as to exactly how it will work in practice. Here's what you need to know to understand the new system better.

self employed in Spain
Spain's Minister of Social Security Jose Luis Escrivá. Photo: PIERRE-PHILIPPE MARCOU / AFP

From 2023 Spain’s autónomos will pay monthly social security fees based on “real earnings” in a similar way to how it works for income tax. The Spanish government revealed the new rates at the end of July 2022. 

The changes mean that rather than there being a fixed minimum contribution base of €294, self-employed workers will pay different monthly amounts based on how much they earn. It will go from €200 a month for lower earners to €590 a month for higher earners.

READ ALSO – CONFIRMED: Spain’s new tax rates for the self-employed from 2023 onwards

However, many of those who are self-employed are confused by the new rules and have many questions regarding exactly how much they’ll be paying from next year. 

Here are some of the most common questions asked and the answers, which are based on an interview with Social Security Minister José Luis Escrivá on radio station Cadena Ser. 

Q: When will the new system come into effect?

A: Autónomos will start paying the new social security quotas from January 1st 2023.

Q: How will I know what income bracket I will be put into?

A: At the beginning of the year, each autónomo will have to state their expected income level using a special tool called ‘importas’ or imports. This will help you calculate how much you might potentially earn during the year. You will be able to modify and change your income bracket six times per year, based on your real earnings. At the end of the year, you will find out what your final real earnings are and your fee will be adjusted accordingly.

READ ALSO: Will you pay more under Spain’s new social security rates for self-employed?

Q: Does that mean I will get my social security back if it turns out Ive paid too much?

A: Yes, essentially like the income tax, you will be paid part of your social security fee back again if it turns out you’ve paid too much. On the other hand, it also means that you will also have to pay more social security if you have paid too little.

Q: How will the new system work if I only work sporadically?

A: As mentioned above, you will be able to change your expected income every two months. This means those with seasonal work will end up paying less in social security fees than they do now, during the months when they get less work. When you begin to earn more, you can change your expected income level again and will be charged more.

Q: What will happen to the tarifa plana or flat rate scheme whereby new autónomos start out paying only €60 per month in social security fees?

A: The tarifa plana as it stands currently will end and those on it will not continue paying the same amount. Instead, new autónomos will pay a flat fee of €80 per month for the first year and will continue at this rate in year two, only if they earn below minimum wage. Low earners, those who earn less than €670 per month will see their rate reduced to €230 in 2023, €225 in 2024 and €200 in 2025.

Q: What will happen if I have to close my business for some reason, do I have to de-register completely?

A: The new law now states that if you are forced close your business partially or temporarily, such as in the case of the volcano eruption in La Palma, you now don’t have to deregister completely from the autónomo system. Those who have to partially close their business will be able to apply for financial help, even if they do not close completely.

Q: Why is there such a big difference between the social security rate in Spain and other European countries?

A: According to Escrivá, Spain is one of the countries with the highest level of protection for self-employed people in Europe. In other countries, you may pay less in social security fees, but will not get pensions, sick pay, maternity or paternity benefits, he explained. It also means you have aid benefits during a crisis such as the Covid-19 pandemic or if you own a shop on a street that has to be closed for construction, for example.

Q: How will we know if the new changes will be successful or not?

A: These reforms essentially mean higher pensions for the self-employed, as well as higher and better benefits. When autónomos start benefitting from these, then we know that it is successful, said Escrivá. 

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WORKING IN SPAIN

Spain’s public and regional holidays in 2023: How to make the most of them

2023 will be a good year for long weekends and bank holidays. Here’s how to plan ahead and turn Spain's national and regional holidays into extended breaks without using up your annual leave.

Spain's public and regional holidays in 2023: How to make the most of them

People in every region of Spain will enjoy 14 public holidays in 2023, 8 of which are national holidays that can’t be omitted or replaced from the calendar. 

What’s more, 4 of these 8 fall on Monday or Friday, which give you the option of taking a three-day weekend without having to book out any leave from work. 

Two others fall on a Tuesday and a Thursday, which means that by taking one day off from work you can have four days off in a row. 

Spain’s public holidays in 2023 are:

  • Friday April 7th: Good Friday (Viernes Santo)
  • Monday May 1st: May Day (Día del Trabajo)
  • Tuesday August 15th: Assumption of Mary (Asunción de la Virgen)
  • Thursday October 12th: Spain’s National Day (Día Nacional)
  • Wednesday November 1st:  All Saints Day (Día de Todos los Santos)
  • Wednesday December 6th: Constitution Day (Día de la Constitución)
  • Friday December 8th: Immaculate Conception (Inmaculada Concepción)
  • Monday December 25th: Christmas Day (Navidad)

Spain’s official national holidays list is missing two key dates: Three Kings Day (which falls on Friday January 6th and is a holiday in all of Spain’s regions) and New Year’s Day. 

Because January 1st 2023 falls on a Sunday, not all regions are making Monday January 2nd a holiday; so far only Andalusia, Murcia, Aragón, Asturias and Castilla Y León.

Everyone in Spain will also get at least 2 days off for Easter. Apart from Friday April 7th (which is a holiday across Spain), Maundy Thursday 6th will be a holiday in every region except Catalonia and the Valencia region, which instead have Monday April 10th off. In the Balearics, La Rioja, Navarre and the Basque Country it’s a holiday on Thursday, Friday and Monday, which equates to five days off in a row.

It’s worth noting as well that the December 2023 puente (how Spaniards refer to ‘bridging’ the days between official public holidays and the weekend to maximise time off) has two public holidays on a Wednesday and a Friday and can therefore be turned into a five-day holiday by just taking one day of leave.

That means that overall in 2023, pretty much everybody in Spain will have at least 7 puentes to enjoy, and they will only have to take 3 days off in total from their annual leave to enjoy all of them. 

So apart from Spain’s public holidays and the differences in New Years’ and Easter holidays that we’ve covered above, what other regional holidays can residents in Spain look forward to?

Well, each region has at least its own specific holiday to celebrate its region and heritage, many of which fall on Mondays and Fridays, allowing for even more long weekends. 

Keep in mind that there are also festivos (holidays) in specific provinces, cities and towns and even islands, such as in the Canary Islands, where each island enjoys its own day off.

Spain’s regional holidays in 2023 are:

Andalusia: Tuesday February 28th (Andalusia Day)

Aragón: Monday April 24th (Aragón Day)

Asturias: Friday September 8th (Asturias Day)

Balearics: Wednesday March 1st (Balearics Day)

Canary Islands: Tuesday May 30th (Canaries Day)

Cantabria: Friday July 28th (Cantabria Day), Friday September 15th (La Bien Aparecida)

Castilla-La Mancha: Wednesday May 31st (Castilla-La Mancha Day), Thursday June 8th (Corpus Christi)

Castilla y León: Tuesday July 25th (Saint James Day)

Catalonia: Monday September 11th (Catalonia Day), Tuesday December 26h (San Esteban)

Madrid: Monday March 20th (San José Day), Tuesday May 2nd (Madrid Day)

Valencia region: October 9th (Valencia Day)

Extremadura: Tuesday February 21st (Carnival Tuesday), Friday September 8th (Extremadura Day)

Galicia: Wednesday May 17th (Galician Writing Day), Tuesday July 25th (Galicia Day)

La Rioja: Friday June 9th (La Rioja Day) 

Murcia: Friday June 9th (Murcia Day)

Navarre: Tuesday July 25th (Saint James Day)

Basque Country: Tuesday July 25th (Saint James Day)

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