You can modify your contribution base as a self-employed worker until August 31st.

We remind you that you have the opportunity to modify your contribution base for the Special Regime for Self-Employed Workers (RETA) and the corresponding contribution to adjust it to your actual income, within the limits allowed according to age, until August 31, 2024. This modification will take effect from September 1, 2024. If you do not make this change, you will continue to contribute based on your current contribution base.

The self-employed are the only ones who can choose their contribution base. This decision is very important, as their current benefits and future pension depend on it. The contribution base can be easily modified electronically through the RED system. However, it's important to be aware of the procedures and timeframes involved in making the change.

• Attention. The choice of contribution level will be very important, as this is the parameter that determines the amount of benefits the self-employed worker will receive in case of illness, accident, unemployment, maternity or retirement.

We would like to remind you that there is a new social security contribution system for the self-employed based on their net income. If you are self-employed and need to update your contribution base, you will have to adjust it to the corresponding bracket for your new income. This change takes effect on September 1st and you can make the adjustment until August 31st.

• Attention. It is important to note that the contribution base is related to the actual earnings you will have during the year 2024.

If a change in net income is expected throughout the year, it will be possible to select a new contribution base every two months and, therefore, a new contribution rate adapted to those changes, with a maximum of six changes per year. This modification will be effective on the following dates:

• March 1, 2024, if the application is made between January 1 and the last calendar day of February.
• May 1, 2024, if the application is made between March 1 and April 30.
• July 1, 2024, if the application is made between May 1 and June 30.
• September 1, 2024, if the application is made between July 1 and August 31.
• November 1, 2024, if the application is made between September 1 and October 31.
• January 1, 2025, if the application is made between November 1 and December 31.

Therefore, you can now until August 31st if you deem it necessary. This will be the last day to request a change in your contribution base for the summer period. This way, if you believe your income will fluctuate during the summer, you can adjust your Social Security contributions.

How do I calculate my returns?

From the resulting amount, 7 percent will be deducted for general expenses, except in cases where the self-employed worker meets the following characteristics, where the percentage will be 3 percent:

• Administrator of capitalist commercial companies whose participation is greater than or equal to 25 percent.
• Partner in a capitalist commercial company with a stake greater than or equal to 33 percent.

To apply the indicated percentage of 3 percent, it will be sufficient to have been registered for ninety days in this special scheme, during the period to be regularized, in any of the cases mentioned above.

Based on the monthly average of these annual net returns, the contribution base will be selected, which will determine the amount to be paid.

Annually, the General State Budget Law will establish a general and a reduced table of contribution bases that will be divided into consecutive sections of monthly net income amounts to which maximum and minimum monthly contribution bases will be assigned for each section.

During the year 2024, the general table and the reduced table and the maximum and minimum bases applicable to the different net income brackets will be the following (Order PJC/51/2024, of January 29):

What happens if I choose a contribution base that ultimately does not correspond to my final earnings?

The monthly bases chosen each year will be provisional until the annual adjustment of the contribution is made.

At the end of the calendar year, the Tax Administration will provide the Treasury with information on the actual annual income received. If the contribution rate chosen during the year is lower than the rate associated with the income reported by the corresponding Tax Administration, the employee will be notified of the difference. This amount must be paid before the last day of the month following the month in which the notification with the result of the adjustment was received.

If, on the other hand, the contribution is higher than that corresponding to the maximum base of the bracket in which the income is included, the Treasury will proceed to reimburse the difference before April 30 of the year following the one in which the corresponding Tax Administration has communicated the computable income.

• Attention. 2023 Regularization: During the second half of 2024, the General Treasury of Social Security will regularize the monthly contributions made by each self-employed worker during 2023 once they have declared to the Tax Agency the amount of net income obtained during the year.

If you are interested in changing the contribution base, we would appreciate it if you could let us know as far in advance as possible.

You can contact this professional office for any questions or clarifications you may have.

Warm regards,