Important changes for Freelancer

There is currently a lot of news affecting the self-employed, because after a year of 2021 marked by the effects of the pandemic, the Spanish government has recognised the importance of promoting measures to help this collective and ensure a recovery of lost activity.
The most important measure recently adopted concerns the monthly contribution for the self-employed, because from next year there will be a new system that will benefit those with lower incomes. In practice, this means that of the more than three million self-employed people registered in Spain, practically half will pay less contribution than before, 25% will keep the same contribution and for another 25% it will be increased.

The new system provides for a transition for the next three years, leading to a minimum contribution of 200 euros in 2025 (currently the minimum contribution is 294 euros) and a maximum contribution of 500 euros. 

The new formula lowers the contribution for low-income workers (less than 1,166 euros per month), keeps the contribution stable for those earning between 1,166 and 1,700 euros, and increases the contribution for those earning more than 1,700 euros. It also sets a flat rate of 80 euros for the first year of work, which is extended for a further twelve months for those earning less than the interprofessional minimum wage.

Once these income levels have been set, it is up to the self-employed person to change the expected flat rate if turnover improves or worsens during the year. The social security system allows for a change of contribution base and thus classification every two months, but monitors the contributions paid by the self-employed during the year and obliges them to make additional payments if the balance paid shows that they should have paid more contributions than they did.

In addition to the introduction of this new system of contributions for the self-employed, the government has also adopted various measures this year, some of which apply specifically to certain sectors of the self-employed and others which apply generally to all households and are currently being applied, such as:
– The extension of the 20 cent discount for all consumers on the purchase of fuel at petrol stations until 31 December.
– The reduction of VAT on electricity from 10% to 5% will remain in force until the end of the year.
– Increase in the minimum living wage and non-contributory pensions.
– New cheque for 200 euros (this new direct aid is not specifically aimed at the self-employed, who are explicitly included in the list of beneficiaries who can claim this aid. To do so, certain conditions must be met, such as an income of less than 14,000 euros per year in 2021 and assets of less than 43,196.40 euros).
– Deferral of social security contributions for the self-employed most affected by the energy crisis.

We would also like to remind you that from 11 July 2021, transactions of 1,000 euros or more, can no longer be paid in cash if one of the parties is acting as an entrepreneur or self-employed person.
Remember to take all these new developments into account with regard to your contributions as a self-employed person in the coming years or if you want to start a new activity.

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