The Régimen Especial de Trabajadores Autónomos (RETA) is a fundamental part of Spain’s Social Security system, specifically designed to cover the needs of self-employed workers.
In 2024, RETA has undergone significant changes affecting both contributions and benefits, with the aim of adapting the system to the new realities of self-employment.
In this article, we will explain everything you need to know about the new self-employed regime in Spain for 2024 in a clear and simple way.
What is RETA?
RETA is the system through which self-employed workers in Spain contribute to Social Security, ensuring them access to benefits such as retirement, sick leave, unemployment, and more.
All self-employed workers must be affiliated with this regime, which requires them to pay a monthly contribution based on their chosen contribution base.
Key Changes in RETA for 2024
If you are self-employed in Spain you need to know about these key changes. The updates aim to improve the system’s equity and sustainability. Below are the most relevant changes:
1. Contributions Based on Real Income
One of the most significant reforms is the shift to contributions based on real income.
Starting in 2024, self-employed workers will contribute according to the net income they earn from their economic activity.
This aims to align contributions with each worker’s actual ability to pay.
2. New Contribution Bases
The new RETA introduces a broader range of contribution bases, allowing self-employed workers to choose a base that matches their income.
These bases are updated annually and specific ranges have been established depending on the income level.
3. Improved Unemployment Benefits
The new regime also expands and improves unemployment benefits (equivalent to unemployment benefits for employees).
Now, self-employed workers who cease their activity can access a benefit for a longer period, with greater coverage guarantees.
4. Reduced Contributions for New Self-Employed Workers
In 2024, the flat rate for new self-employed workers remains, although with some modifications.
During the first 12 months, new self-employed workers can opt for a reduced contribution, which will be adjusted later based on their real income.
Tax Obligations for Self-Employed Workers in 2024
In addition to social security contributions, self-employed workers must comply with a series of tax obligations, including:
- VAT Returns: Quarterly, self-employed workers must declare and pay the VAT corresponding to their issued invoices.
- Personal Income Tax (IRPF) Payments: Self-employed workers must make quarterly payments on account of IRPF, based on their net income.
- Annual Income Tax Return: Annually, they must file an IRPF return, including the income earned throughout the year.
You can read my dedicated article if you want to know more about the obligations and opportunities regarding tax residency in Spain.
Advantages and Disadvantages of the New RETA
The new regime for self-employed individuals in Spain offers several advantages but also presents certain challenges:
Advantages:
- Income-Based Contributions: Contributions based on real income are fairer and more equitable.
- Improved Benefits: Enhancements in unemployment benefits provide greater security to self-employed workers.
- Reduced Contributions for New Self-Employed Workers: Facilitates starting a business with a lower contribution rate.
Disadvantages:
- Increased Scrutiny on Income: Income-based contributions imply greater control and transparency in tax declarations.
- Higher Contributions for Some Self-Employed Workers: Self-employed workers with higher incomes may see an increase in their monthly contributions.
The new self-employed regime represents an effort to modernize and adapt the social security system to the current needs of self-employed workers.
While it introduces significant changes, such as income-based contributions and improved benefits, it also presents new challenges that self-employed workers will need to address.It is essential for self-employed workers to stay informed and comply with all obligations to make the most of the benefits offered by the new RETA.
If you want more information you can checkout the website of the Seguridad Social or reach out to me.
