In response to the many doubts caused by the new Entrepreneur Support Act (Ley de Emprendedores), we offer the following answers to frequently asked questions about the fifty euro flat rate to be paid to Social Security under the new legislation, along with practical examples of it´s application.
1) Who can benefit from the €50 flat rate bonus? What are the requirements?
– The self-employed or the partners of associated work cooperatives in the RETA (Régimen Especial de Trabajadores Autónomos).
– 30 or more years old (a bonus already exists for people under the age of 30).
– Sign up to the RETA for the first time or sign up after not having been in the RETA in the five years immediately before.
– Not employ workers.
2) How much do you have to pay per month and for how long?
– 80% of the Social Security fee during the 6 months following the inscription in the RETA.
– 52% of the fee during the 6 months following the previous period.
– 30% of the fee during the 6 months following the previous period.
That is, these percentages are applied to the contribution base chosen by the self-employed person. For example, if you contribute to Social Security at the minimum rate, which is around €256 per month, this means that you will pay roughly €50 for the first six months, €130 for the following six and €180 in the following six. In total, 18 months reduction in the contribution to Social Security of the self-employed.
3) If someone has signed up to the RETA before the 29.09.2013, under what circumstances can they take advantage of the bonus?
The bonus is applicable for “new inscriptions” in the RETA and not those that took place before the 29.09.2013. However, if the self-employed person has not been signed up during the 5 years immediately preceding the date of new inscription, he or she can benefit from the bonus.
For example, a self-employed person signs up to the RETA on the 27.07.2013 and cannot take advantage of the bonus. Another self-employed person had been signed up for 6 months in 2002 and registers again now in October of 2013 and can take advantage of the bonus (he or she has been more than five years without being signed up to the RETA).
4) What about administrators (self-employed) of new companies and their family members? How much do they have to pay per month?
With regards to corporate administrators, it should be noted that, although the law does not expressly forbid the application of the bonus to this group, in practice the Social Security has chosen not to include them. Therefore, administrators of companies cannot take advantage of the bonus.
Being a family member of the owner of a company does not qualify you for the new bonus either. However, there is another bonus which was established in the labor reform of 2012 which created the figure of “self-employed contributors” (family members of company owners) and that applies a reduced rate of 50% to this group. This means a reduced fee of 128,37 euros a month instead of the usual 256,74 for those self-employed that collaborate in the companies of their relatives.