We are more than 3 million self-employed in Spain. Specifically, 3,149,040 members of the Special Regime for Self-Employed Workers (hereinafter, RETA). Since a year ago, we are already 38,444 more brave people, which is very positive, since we are characterized by being entrepreneurs, and that is always good.
Main disadvantages of self-employment
Today, we are going to look at three differences that we have with respect to salaried workers, who are classified in the General Regime, and about which we are not satisfied:
1. Dissociation between income and contributions
As a self-employed person, we may be lucky enough to earn, for example, €2,000 per month or, like the vast majority, less than €800 between expenses and other obligations associated with self-employment. Either way, on the one hand, our income and, on the other, our Social Security contribution (which in 86% of cases, we pay the minimum contribution: €893.10 in 2016). In itself, it is already unfair, since it will mean that we will either pay more than we should or less, which is linked to the second disadvantage of the self-employed compared to the salaried worker.
2. Lower contribution means lower benefits
In fact, contributing 999.27 euros, which is the average for the self-employed, compared to the 1,703.71 euros for salaried workers, has the consequence that all the benefits offered by the Social Security: retirement pension, temporary sick leave due to illness or accident, widowhood pensions, orphan’s pension, unemployment…; will be 40% lower. In this article we talked about the lower pension of the self-employed compared to employees.
This, of course, makes it necessary to take out a series of insurance policies to supplement our basic benefits in the event of any contingency. In the case of paying the minimum contribution (we have already said that this is the case for 86% of the self-employed), let us see some examples of these benefits:
- 526.93 per month for taking a temporary leave of absence (from which we would have to deduct the cost of the self-employed contribution, which we would still have to pay: 267.04 €). In other words, a net of €259.89 per month.
- 98 per month for widowhood. That is what our spouse would be left with per month, should any misfortune befall us (even if we were to receive €2,000 per month).
3. Increased bureaucratic obligations
As freelancers, we are something like a mini-business. We have to control both our income and the expenses related to our professional activity. This implies the need, almost the obligation, to hire a manager to handle everything related to the Administration and the Treasury, in general. Of course, with the cost that it entails at the end of the month.
Of course, we will not go into the issue of vacations or unemployment pension entitlements so as not to inflame the flame even more.
Improvements to be achieved
For these reasons, we demand from here a better treatment of the self-employed worker who, as we all know, also generate wealth in our country. We would like to see more initiatives like the €50 flat rate.
Another logical change would be to link income to contributions, so that they would not be penalized in terms of benefits (as long as the contributions to be paid were more reasonable, of course).
From PIB Group Iberiawe are at your disposal to inform you about the Social Security benefits that you have in your case, and to find the advice you need. Call us or write us if you want to know the best insurances for self-employed.
