The problem of being self-employed in Spain

The government wants to implement a social security reform that seriously harms the economic situation of the self-employed (freelancers).

It intends to apply this measure (change of law) in 2023.

This is de cost of social security by annual income levels:

9.000 to 12.600 euros/year, cost: 245 euros/month
12.600 to 17.000 euros/year, cost 260 euros/month
17.000 to 22.000 euros/year, cost 275 euros/month
22.000 to 27.000 euros/year, cost 290 euros/month
27.000 to 32.000 euros/year, cost 305 euros/month
32.000 to 37.000 euros/year, cost 320 euros/month
37.000 to 42.000 euros/year, cost 340 euros/month
42.000 to 47.000 euros/year, cost 360 euros/month
47.000 to 48.841 euros/year, cost 380 euros/month
More than 48.841 euros/year, cost 400 euros/month

This change will be implemented between 2023 and 2031.

The main problem starts in 2031, with these costs:

9.000 to 12.600 euros/year, cost: 235 euros/month
12.600 to 17.000 euros/year, cost 275 euros/month
17.000 to 22.000 euros/year, cost 305 euros/month
22.000 to 27.000 euros/year, cost 425 euros/month
27.000 to 32.000 euros/year, cost 545 euros/month
32.000 to 37.000 euros/year, cost 670 euros/month
37.000 to 42.000 euros/year, cost 800 euros/month
42.000 to 47.000 euros/year, cost 935 euros/month
47.000 to 48.841 euros/year, cost 1.075 euros/month
More than 48.841 euros/year, cost 1.220 euros/month

This is surprising, in general, when compared to other countries in Europe.

Let me give you an example. If you earn 50,000 euros a year, you have to pay, just for social security, 14,640 euros (29.3% of your income). If you add the 15% that you have to pay in advance to the Treasury, you are paying, in advance, 45% of your income…. now you have to add VAT, local taxes, professional insurances and the costs of your profession.

It is unbelievable, the Spanish state is going to take 50% upfront from the self-employed. Only Portugal and Italy have a similar situation, the rest of the countries are far away.

To make the situation worse, a self-employed person can change his situation 6 times a year. A crazy movie, because all countries in Europe have only one simple rate (or two sometimes).

I hope this change does not happen and the system improves between now and 2031. We will see.

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