The year 2023 brings major changes in the public pension system, such as the entry into force of the pension reform or the application from this month of January of the new Intergenerational Equity Mechanism (MEI) that will increase Social Security contributions.
The MEI replaces the sustainability factor, which corrected the increases in pension spending derived from the increase in life expectancy, and will apply until 2032.
The mechanism will reactivate the Social Security Reserve Fund through a 0.6 % increase in the Social Security contribution for common contingencies from 2023 to 2032; 0.5 % of this increase will be borne by the company and the remaining 0.1 % by the worker. The self-employed will fully assume the contribution increase of 0.6 percent.
Consequences of the MEI on workers and employers
- The contribution rate for common contingencies for employed workers amounts to 28.30 %; 23.60 % is paid by the company and 4.70 % is assumed by the worker.
- These types are applied based on the contribution that corresponds to the employee to calculate the contribution to be paid.
- The 0.6 % MEI rate increase will be added to the contribution rate for common contingencies, so it will remain at 28.90 %.
- It will be divided into 24.10% by the company and 4.60 % by the worker.
How the MEI affects the contribution of the self-employed
- The contribution rate for common contingencies will also go from 28.30 % in 2022 to 28.90 % as of 2023, the total contribution being 31.20% once the contributions for professional contingencies and cessation of activity have been added.
- The increase in the contribution base and, therefore, the contribution to be paid that many self-employed workers will suffer, with the entry into force in January 2023 of the new self-employed contribution system according to their real net income.
- 15 price brackets are established based on net income brackets, and includes progressive price brackets from 2023 to 2025.
- It starts this year with fees ranging from a minimum fee of 234 euros per month for self-employed workers with net earnings of less than 670 euros per month, to a minimum fee of 509 euros per month for those with net earnings of more than 6,000 euros per month.
New maximum contribution base:
The maximum limit of the contribution base in each of the Social Security regimes that have it established, is set, as of January 1, 2023, in the amount of 4,495.50 euros per month.
The minimum bases will remain the same as long as the SMI (Minimum Interprofessional Wage) does not increase.
If you want more information, you can contact the labor department, or if you prefer you can contact us through our form by clicking here.