The new quotas for the self-employed in Spain from 2023 to 2031 are undoubtedly causing a stir. Although they are still being processed and there is time for them to be improved and adapted, they should not go unnoticed. If you are self-employed or an entrepreneur, this article will be of great use to you.

What are the new quotas for the self-employed?

The current €294 minimum fixed contribution will be part of a progressive system of 13 tranches depending on the income received. This program will be implemented as of 2023, so that by 2031 the contribution will vary between €184 and €1,297.

As you will see, the new quotas can be described in a few words, but this is only a rough outline, so read on to learn more about the advantages and disadvantages involved.

Advantages of the new quotas for the self-employed

If you are self-employed, you will be interested to know the advantages and disadvantages of implementing the collection of these new fees.

A fair progressive system.

In short, whoever earns more, pays more. For years, the Spanish government has been evaluating the possibility of adjusting the self-employed quota to their real income, since it makes no sense for a self-employed person who earns 500 € to pay the same quota as one who earns 4,000 €.

Improve the social protection of the self-employed.

The average pension of the self-employed is 59.4% of that received by salaried workers and sick leave benefits are much lower.

This is because 85% of the self-employed contribute at the minimum rate and, although the option to contribute more exists, they do not take it. Therefore, the increase seems logical.

Sustainability of the pension system.

Currently, the Social Security pension system is considered an unviable hole that needs to be changed as soon as possible.

By increasing contributions, more money can be raised to support pensions.

Reduction of the contribution for those who earn less.

According to the Government, these measures will benefit more than half of the self-employed. In practice, it will be those who earn €900 or less.

Flexibility to adapt the quota for one year.

The possibility of modifying the amount 6 times a year is contemplated in order to give the self-employed the opportunity to adapt their income throughout the year.

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Disadvantages of the new quotas for the self-employed

• It equates the obligations of two very different labor realities. This means that the responsibilities of the self-employed will be equal to those of the employee. This is, at first sight, unfair: the employee’s contributions are supported by the company, while the self-employed person is responsible for this economic responsibility on his own.

• It does not value the risk of entrepreneurship. It does not take into account the uncertainty of income, the continuous reinvention, the extra hours of work, the fact that there are fewer and fewer vacations, the stress, among others.
  Nor is it valued what the self-employed represent for the economy: dynamizers of activity and employment.

• It discourages entrepreneurship and self-employment. This type of change encourages the attraction of working in companies instead of entrepreneurship, something really bad if Spain wants to become a dynamic first level country.

• The possibility of being able to choose one’s own pension plans and private insurance is eliminated. With this, the ability to choose the method of saving is lost.

• People over 45 years of age find it more difficult to find an alternative to being self-employed, even if they get a public job.

• It will be more difficult to hire due to higher costs.

• Price increases. Faced with the loss of clients, many freelancers will once again compete on price, reducing the quality of their services. In the face of this price increase, inflation will be encouraged.

• More underground economy, since the highest earners will hold back from reaching the highest bracket.

• The self-employed will move to countries with more tax advantages.

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Summary of the new self-employed quotas 2023-2031

To close, here we will detail the collection of fees according to the real income of a self-employed worker:

You may also be interested in: Tax obligations for the self-employed in Spain 2022

What do you think about these new fees for freelancers? Do they affect your business model? If you want to upgrade your business as a freelancer and that these measures affect you in the least, contact us. In TAS Consulting we have a team of highly trained professionals to advise you in the best way.