top of page

Autónomo payments 2023: Social Security Changes in Spain

Updated: Jan 26

Author: Vee Saudargaite

Publication date: 12.01.2024


Autónomo payments

In regards to autónomo payments in Spain, there have been significant modifications to the Seguridad Social (autónomo) payment system in January 2023. In Spain, the autónomo payment is a payment that people who are self-employed must directly cover out of their take-home pay before taxes. In particular, they are referred to as "autónomo payments" because the self-employed status in Spain is known as "being autónomo/a".


Up until January 1st 2023

Until recently, people had the option to determine the average rate by which to set their autonomic amount. The range of options was from a minimal base of €960.60 per month to a maximum of €4,139.40 per month.






The unfair old system and the need of change

Unsurprisingly, at least 80% of payers chose to pay the minimum amount, according to data provided by the state. This is understandable, as there was hardly any reason to act otherwise. However, this was unjust, unsustainable, and extremely difficult for individuals with the lowest incomes, which is a large section of the population in Spain. Therefore, something needed to shift.



From the first of January 2023, everything changed in terms of autónomo payments in Spain. One key sentence that describes this change is ´The more you earn, the more you pay´. This basically means that the autónomo payment had to increase proportionate to the income of individuals.


The new system over a 3 year period

This new self-employed contribution system was introduced in January 2023. With that said, it is to be progressively put into effect over a period of three years, between 2023 and 2025. So what is the outcome of these new changes for Spain´s self-employed? Well, it is that the highest earners will see their financial contribution increase, while the lowest earners would see their contribution decrease. 


The categories of the new system

As a result, the new system anticipates 15 contribution categories. Each person who is self-employed will be assigned to a category based on their anticipated income, which they must report to Social Security. And as mentioned earlier, higher levels will result in an increase in contribution while lower levels will experience a decrease.



What is the autónomos cuota?

So, what exactly is this monthly fee that self employed people have to pay in Spain? Well, it is known as the autónomos cuota or the freelance quota. In particular, it is defined as a monthly social security contribution in Spain, which ensures the legal compliance of those who are self employed.

                                                           


How will this affect the monthly payments of the self-employed?

When we look at how this will affect monthly payments, we see that by 2025, contributions for self-employed individuals making less than €900 per month will be kindly reduced by a significant amount which is between €94 and €74.


Additionally, for those who are earning between €1300 and €1700 per month, they will continue to pay the current minimum payment of €294. And lastly, the monthly payment for the self-employed individuals who are earning more than €1700 per month will increase.


Why do people choose to become autónomo in Spain and why is it so popular?

Well, in Spain, almost everyone can work for himself or as a freelancer. Being an autónomo enables you to practice what you do or manage your own firm in the same way as a corporation. However, being self-employed results in significantly reduced expenses and overhead costs. In actuality, 3.2 million individuals work for themselves in Spain, making up approximately 16% of the overall population. Many of them work in construction and agriculture, but the bulk are in the service industry.


The advantages of becoming an autónomo

Self-employment has grown significantly in popularity among online workers and small

enterprises in Spain in recent decades. Additionally, there are a variety of professions in

which becoming autónomo can be very beneficial and successful. 


For example, launching an internet business is one popular choice. This is because it reaches clients worldwide and avoids the costs associated with hiring staff or leasing office space. Another example is teaching online as it is a very broad profession that can be done with or without qualifications.


More popular autónomo professions in Spain include doctors, restaurants, retail

establishments, and service-oriented companies like hair salons. For the majority of people in Spain, working for themselves is undoubtedly preferable to running a private limited company. This is because being self-employed it is less costly to establish and manage.

Takeaways

In conclusion, it is clear that these modifications made to the autónomo payments signify a new strategy for Spain's self-employed contributions.


 

You can also read about:


 

Reference List

244 views0 comments

Recent Posts

See All
bottom of page