November is the month marked on all self-employed people’s calendars. From this month, Social Security will start contacting the self-employed to let them know whether they will have to pay more or receive a refund for their contributions. The regularisation process is scheduled to be completed by March 2025.
Since the new contribution system came into force in 2023, self-employed workers’ contributions have been calculated according to their income, with 15 brackets ranging from 225 to 530 euros per month. This change aims to make the self-employed contribute more fairly to the social security system by adjusting their contributions to their actual income.
However, the self-employed must be well informed about this process, as the difference between the contribution paid and what would correspond to the declared income could lead to additional charges. Only 12% of the self-employed have changed their contribution base in line with their actual earnings, suggesting that a large majority could face adjustments shortly.
What are the implications of this adjustment?
- Review and payment of differences: If your contributions have been lower than your income, you will have to cover the difference. If you have overpaid, you may receive a refund. This adjustment will bring the contributions of the self-employed more in line with their actual income.
- Fines and penalties: If discrepancies in declarations are detected, you may face penalties. The General Social Security Law establishes different types of infringements:
- Minor: Fines of up to 750 euros.
- Serious: Ranging from 751 to 7,500 euros.
- Very serious: From 7,501 to 225,018 euros, depending on the seriousness.
- Transition to a new system: Currently, the contribution system is in a transitional phase. From 2026, a further revision of contributions is expected with additional adjustments until 2032. This means that the self-employed will have to keep adapting to future changes in the system, which will require them to constantly monitor their income and adjust their contributions regularly.
How to prepare for the regularisation of contributions?
- Check your income declarations: The Tax Agency is checking the income data and contributions paid by 3.7 million self-employed people. This is why you will need your income declarations to be accurate to avoid surprises in the regularisation process.
- Take proper advice: With the support of a professional, check whether your contributions properly reflect your income. This will not only avoid penalties but will ensure that your contributions are correctly aligned, thus maximising your entitlement to future benefits.
- Be aware of Social Security notifications: Social Security will contact the self-employed directly, either to report adjustments or to make necessary changes to contributions. Stay informed and respond to these notifications to avoid future problems.
- Consider the cessation of activity: Although the cessation of activity benefit currently depends on the collaborating mutual insurance companies, it is essential to know how it works. In 2023, the State paid 63 million euros in these benefits. Knowing what to do if you need to claim this benefit can be vital.
What to expect soon
Social Security will continue to inform the self-employed and their representatives about the status of the regularisation and other aspects of the contribution system. This change is part of a broader effort to bring the contributions of the self-employed into line with those of employees. This will ensure more adequate pensions and better protection in case of cessation of activity. In addition, self-employed organisations are awaiting a new round of negotiations with the government to define the next stages of this system.
If you are self-employed or your company has self-employed workers or external collaborators under this scheme and you need help understanding how these changes may affect you, we recommend that you seek expert advice.
At LEIALTA, we are available to help you manage and guide your self-employed workers regarding these new regulations. Contact us to ensure that everything is in order and avoid future problems that could affect your business’s performance.
