At the beginning of 2025, Social Security in Spain will introduce a new solidarity contribution. This change will entail an additional contribution for incomes that exceed the maximum annual contribution base, which for 2024 is set at €4,720.50 per month. This new contribution will only apply to the portion of the monthly salary that exceeds the maximum contribution base, an area that until now has not been subject to Social Security contributions.
The distribution of this contribution is designed to avoid any potential collapse in the pension system in Spain. This measure will be implemented progressively from January 2025 to 2045. For this reason, we would like to explore the most relevant aspects of this new measure before it is put into effect.
What will this new contribution consist of?
Last March, the central government approved the introduction of this new contribution. As mentioned, this solidarity contribution, which will effectively function as a tax, is intended to help compensate for pensions in Spain. It will not be until January next year that we will begin to see the deductions that will go into the common fund.
The distribution of this contribution will follow the same structure as the current contribution for common contingencies: 83.40% of the contribution will be borne by the company, and 16.60% will be borne by the worker.
How will the Solidarity Contribution be implemented?
The solidarity contribution will be implemented progressively, and the structure of the contribution will depend on the level of income above the maximum contribution base. Specifically:
- Income between the maximum contribution base and an additional 10%: 0.92% increase.
- Income between 10% and 50% above the maximum base: 1% increase.
- Income exceeding 50% of the maximum base: 1.17% increase.
The contribution will increase progressively: these percentages will rise annually by 0.25 percentage points until they reach the following values in 2045:
- First segment: For income between the maximum base and an additional 10% of the base, the contribution will be 5.5%.
- Second segment: For income between 10% and 50% above the maximum base, the contribution will be set at 6%.
- Third segment: For income exceeding 50% above the maximum base, the contribution will be 7%.
Who will be affected by the regulation?
This change is particularly relevant for sectors where high-responsibility positions or specialized technical profiles tend to receive salaries above the maximum base. Affected workers include:
- Managers and executive staff: As salaries in these positions are often above the maximum base, the solidarity fee will apply to their additional income.
- Technical and specialized profiles in high-paying sectors: Professionals in areas such as technology, engineering, finance, and other sectors with high demand and above-average salaries.
- Employees of multinational companies or large corporations: Where salary levels may exceed the maximum base limit in certain cases.
For employees and companies with salaries that do not exceed the maximum contribution base, this additional contribution will have no impact, as only the standard contribution will continue to apply. It should be noted that this contribution will also not apply to workers included in the Special Scheme for Self-Employed Workers (RETA).
What does the new Solidarity Contribution mean for companies?
For companies, this change means:
- Increase in labor costs: Companies with high-earning staff will need to include an additional contribution in their budgets.
- Adaptation in payroll management: The new contribution will require an adjustment in payroll management systems to correctly calculate contributions based on salary and the maximum annual contribution base.
- Impact on financial planning: Companies will need to anticipate an increase in Social Security costs, especially if they have a significant number of employees earning above the maximum base threshold.
- Review of wage policy: Some companies may choose to review their wage and bonus structures, assessing how the contribution affects their competitiveness in terms of compensation and benefits.
The solidarity contribution represents a major change in Social Security contributions, so companies will need to take steps to anticipate the new requirements and effectively manage the financial effects it will bring.
That is why you need to be more prepared than ever and have the right advice to help you cope with the new year. LEIALTA can provide you with the security you are looking for. Contact us, and we will answer any questions you may have.
