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Social Security system9

13.1 Introduction

As a general rule, all employers, their employees, self-employed workers, members of manufacturing cooperatives, domestic personnel, military personnel and civil servants who reside and/or perform their duties in Spain are required to be registered with, and pay contributions to, the Spanish social security system (except in specific cases of temporary secondments of employees, as indicated in section 11.2 above).

There are different contribution programs under the Spanish social security system:

aGeneral social security program.

bThere are other situations included within the general social security program that qualify for special treatment, namely:

  • Artists.
  • Railroad workers.
  • Sales representatives.
  • Bullfighting professionals.
  • Professional soccer players and other professional sportsmen and women.
  • Agricultural workers.
  • Domestic personnel.

c. Regímenes especiales de Seguridad Social para:

  • Seamen.
  • Self-employed workers.
  • Civil servants and military personnel.
  • Coal miners.
  • Students.

Classification under these programs depends on the nature, conditions and characteristics of the activities carried on in Spain.

As a general rule, employers and their employees will be subject to the general social security program.

13.2 Basic aspects of the General Social Security Program

In those cases in which the employees or employers are subjected to the General Social Security program, social security contributions are paid partly by the employer and partly by the employee. Personnel are classified under a number of professional and job categories for the purposes of determining their social security contributions. Each category has a maximum and minimum contribution base, which are generally reviewed on a yearly basis. Employees whose total compensation exceeds the maximum base, or does not reach the minimum base, must bring their contributions into line with the contribution base for their respective category.

For 2018, the maximum contribution base will be €3,803.70 per month for all professional categories and groups.

Therefore, the situation for 2018 under the general social security program (applicable to the great majority of workers) is as follows Table 9 y 1010.

Table 9

CATEGORY MINIMUM BASE (EUROS/MONTH) MAXIMUM BASE (EUROS/MONTH)
Engineers and graduates 1,199.10 3,803.70
Technical engineers and assistants 994.20 3,803.70
Clerical and workshop supervisors 864.90 3,803.70
Unqualified assistants 858.60 3,803.70
Clerical officers 858.60 3,803.70
Messengers 858.60 3,803.70
Clerical assistants 858.60 3,803.70

Table 10

CATEGORY MINIMUM BASE (EUROS/DAY) MAXIMUM BASE (EUROS/MONTH)
Class 1 and class 2 skilled workers 28.62 125.04
Class 3 skilled workers and specialists 28.62 125.04
Laborers 28.62 125.04
Workers under 18 years of age 28.62 125.04

The contribution rates applicable to employers and employees under the general social security program in 2018 are as follows Table 11.

Table 11

EMPLOYER (%) EMPLOYEE (%) TOTAL
General contingencies 23.60 4.7 28.30
Unemployment
  • General rule11
5.50 1.55 7.05
  • Fixed-term contracts (full-time and part-time)
6.7 1.6 8.3
Professional training 0.6 0.1 0.7
Wage Guarantee Fund 0.2 0.2
Total general rule 29.9 6.35 36.25
Total fixed-term contracts 31.1 6.4  37.5

The total employer contribution rate is increased by additional percentages relating to the occupational accident and disease contingencies provided for in the State Budget Law which will depend, as a general rule, on the activity of the company, although a common percentage will be applied across the board in the case of some occupations or situations.

Employers deduct the employees’ portion of contributions from their paychecks and pay them over, together with the employer’s portion of contributions, to the social security authorities. Similarly, following the above-mentioned Royal Decree-Law 16/2013 of December 2013, employers must notify the Social Security General Treasury in each settlement period of the amount of all the remuneration items paid to their employees, irrespective of whether or not they are included in the social security contribution base and even if single bases are applicable.

Included below are three practical examples for calculating the social security contribution for general contingencies payable by employers for workers subject to the general social security program.

Case 1: a person works as an administrative assistant for a company under a full-time indefinite-term contract and receives a salary of €10,302.60 per year.

  • Data used to calculate the contribution for general contingencies:
  1. The contribution base to be used will be the minimum for administrative assistants, i.e., €858.60 per month, given that the monthly salary received by the worker is lower than this amount.
  2. The contribution rate applicable to the aforesaid amount will be 29.9% for the employer and 6.3% for the worker, bearing in mind that the contract is indefinite-term.
  • Monthly contribution (general contingencies) (Table 12).

Table 12

  BASE (EUROS) CONTRIBUTION RATE (%) MONTHLY CONTRIBUTION (EUROS) 
Employer 858.60 29.9 256.72
Worker 858.60 6.35 54.52
311.24

Case 2: a person works as a technical engineer for a company under a full-time fixed-term contract and receives a salary of €24.996 per year.

  • Data used to calculate the contribution for general contingencies:
  1. The contribution base to be used will be the monthly salary received by the worker, i.e., €2,083.
  2. The contribution rate applicable to the aforesaid amount will be 31.1% for the employer and 6.4% for the worker, bearing in mind that the contract is fixed-term.
  • Monthly contribution (general contingencies) (Table 13).

Table 13

  BASE (EUROS) CONTRIBUTION RATE (%) MONTHLY CONTRIBUTION (EUROS) 
Employer 2,083 31.1 647.81
Worker 2,083 6.4 133.312
781.12

Case 3a person with the job category “graduate” (licenciado) works for a company under a part-time indefinite-term contract and receives a salary of €50,400 per year.

  • Data used to calculate the contribution for general contingencies:
  1. The contribution base to be used will be the maximum for graduates, i.e., €3,803.70 per month, given that the monthly salary of the worker is higher than this amount.
  2. The contribution rate applicable to the aforesaid amount will be 29.9% for the employer and 6.3% for the employee, bearing mind that the contract is indefinite-term.
  • Monthly contribution (general contingencies) (Table 14).

Table 14

  BASE (EUROS) CONTRIBUTION RATE (%) MONTHLY CONTRIBUTION (EUROS) 
Employer 3,803.70 29.9 1,137.3
Worker 3,803.70 6.35 41.53
1,178.83

In all cases, the employer must also contribute for professional contingencies at the premium rates stipulated in additional provision four of Law 42/2006, of December 28, 2006. The resulting amounts are borne exclusively by the employer.

13.3 Applicable program to administrators or members of the Board of Directors

The administrators or members of the Board of Directors of a company could be included in the General Program (“RGSS”), in the General Program as “assimilated” or in the Special Program for Self-Employed Workers (“RETA”). Table 15 explains the different scenarios.

Table 15

COLLECTIVE CONDITIONS AND CHARACTERISTICS CONTRIBUTION SCHEME OBSERVATIONS

Administrators or members of the Board of Directors who receive compensation

 If the worker has the effective control
of the company
 RETA It is presumed, unless there is proof to the contrary, that the worker has the effective control of the company when any of the following circumstances exists:

I. At least half the company capital for which they render their services is distributed amongst partners in the company with whom they live and with whom they are linked by marriage or by blood, affinity or adoption family ties of up to a second degree.

II. Their participation in the company capital is equal to or greater than one third.

III. Their participation in the company capital is equal to or greater than one fourth, if they have been attributed with functions of direction and management of the company.

If the worker has not the effective control of the company They are employees of the company and the administrator post does mean carrying out the functions of direction and management. RGSS
The post as administrator means carrying out the functions of direction and management. RGSS as assimilated to employees (excluding unemployment protection and that of the Salary Guarantee Fund
The post as administrator does not mean carrying out the functions of direction and management. Non-affiliation in the Social Security system

These rules apply as long as the administrator or member of the Board of Directors resides in Spain. In case the administrator resides abroad, the Spanish Social Security would not be applicable.


9  www.seg-social.es
http://www.empleo.gob.es/index.htm

10  Order ESS/55/2018, of January 26, 2018.

11   It includes: indefinite-term contracts (including part-time indefinite-term contracts and indefinite-term contracts for seasonal work), and fixed-term contracts (in the form of training contracts, hand-over and relief contracts and any type of contract made with disabled workers who have been recognized as having a degree of disability of at least 33% of their physical or mental capacity.