New contribution system for the self-employed as of 2023

The new mechanism represents a major change in the way in which self-employed workers have been calculating their social security contributions, since these will be determined on the basis of professional income.

The main aspects of the system designed by Royal Decree-Law 13/2022 are analyzed below.

1. Contribution bases and brackets.

Self-employed workers must establish their contribution base taking into account the net income from their activity and, therefore, they will no longer be able to choose this contribution base freely.

Self-employed workers must communicate to the Social Security a forecast of the net income they expect to obtain in the exercise of their economic activities. Based on this forecast, the self-employed will choose the corresponding contribution base according to the 15 new brackets (three reduced brackets for self-employed workers with incomes below the S.M.I. and 12 general brackets), where a minimum and a maximum base are established.

Every two months (six times a year) it will be possible to change the bracket to adapt the contribution to the income.

The table of brackets established for the year 2023 is as follows (a gradual application regime is instituted until 2032 [1]:

It is worth mentioning the provision according to which self-employed workers who, as of December 31, 2022, were paying a contribution base higher than that which would correspond to them due to their income, may maintain such contribution base, or a lower one, provided that, in the latter case, the base chosen is equal to or higher than that which would correspond to them due to their income.

In addition, Royal Decree-Law 13/2022 introduces a reduced contribution of 80 euros per month for self-employed persons starting their activity, which will replace the current flat rate of 60 euros per month.

The benefits of the current flat rate will continue to apply, in the same terms, to those who were beneficiaries of the same before January 1, 2023 and until the maximum periods established in each case for its application are exhausted.

2. Determination of net income

In order to calculate the definitive contribution that the self-employed will pay under the new contribution system established for 2023, first of all, it will be necessary to know the annual net income of the self-employed activity. In order to determine the net computable income, it will be necessary to take into account the self-employed worker's taxation system:

If the self-employed person is taxed by the direct estimation method, the computable income will be the net income (income from the activity minus deductible expenses in accordance with the IRPF regulations), increased by the amount of the social security contributions and contributions to alternative mutual insurance companies of the holder of the activity.

Regarding the so-called "module" regime or objective estimation method, the computable income will be the previous net income minus the previous net income in the case of agricultural, forestry and livestock activities and the previous net income in the rest of the cases. What is taken as a reference is the previous net yield of the module calculated for personal income tax purposes, specifically the module units for the annual yield per module unit (before depreciation).

In both cases, subsequent reductions (employment incentives, amortizations), corrective indexes, general reductions, extraordinary expenses, other business income or reductions of irregular income will not be taken into account.

On the other hand, in the case of the so-called "corporate self-employed", the total income, in cash or in kind, derived from the participation in the equity of those entities in which they hold, on the date of accrual of corporate income tax, a share equal to or greater than 33% of the capital stock or, having the status of director, a share equal to or greater than 25%, as well as the total earned income derived from their activity in such entities, must be computed.

For joint owners and partnerships, the total income from work or movable capital, in cash or in kind, derived from their status as partners or joint owners in the entities will be computed.

Once the net income has been determined, a 7% deduction for general expenses must be subtracted.

Subsequently, the figure obtained must be divided by 12 to calculate the monthly result, which is what will be taken into account to determine which section of the contribution table is applied and thus determine the contribution base and the minimum monthly contribution.

In the specific case of the so-called "corporate self-employed", the deduction will not be 7%, but 3% and will only be applied if the subject has been registered in the R.E.T.A. for at least 90 days. In addition, for this case of the "corporate self-employed", a minimum contribution base of 1,000 euros is set for the year 2023.

It should be noted that the T.G.S.S. has enabled a web simulator for the calculation of the contribution fees according to the new system.

3. Regularization

The bases chosen will be provisional until they are regularized as from the following year, based on the annual income obtained and reported by the Tax Administration.

Once the definitive contribution base has been calculated, two situations may arise:

Contribution lower than the net income obtained. It will be necessary to pay the difference between both contributions before the last day of the month following the notification of the result, without surcharges or late payment interest if it is paid within that period.

Contribution higher than the net income obtained. The Administration will proceed, ex officio, to the refund of the difference of contribution before April 30 of the fiscal year following the one in which the computable yields have been communicated.