Advantages And Disadvantages Of The Minimum Contribution Bases For Freelancers

The minimum contribution bases are one of the issues that most concern the Freelancers in our country. 66% of them pay the minimum base established by Social Security month after month. That is, the grounds that lower pensions would pay in the event of retirement. Fortunately, this figure has dropped in recent years (83.6% paid for the minimum base in 2008, according to the Association of Self-Employed Workers), although it is still clearly insufficient.

Labor: This must be added to another matter: professionals who are part of the Special Regime for Self-Employed Workers (RETA) for the minimum base and pay the most nominal fee only have access to essential benefits, common contingencies and non-accidents. In other words, all the others are excluded: cessation of activity and professional contingencies. Quoting for each category implies that the quota to pay at the end of the month rises, something that not everyone can afford. 

Professionals must balance the savings involved in paying a lower monthly fee and the benefits they renounce when choosing a contribution base.

How It Is Calculated

The self-employed must be clear that their payments to Social Security are established according to the base they take advantage of. There is a minimum base (which currently stands at 932.70 euros ) and a maximum ( 3803.70 euros ). What does this all mean? Well, that the contribution base is related to the salary of the self-employed. That is your monthly income, which will determine the amount you will have to pay every month and the pension to be received when retirement arrives tomorrow.

That is to say, the higher the base for which you contribute, the higher the fee to pay, but you will also have the right to a much more juicy retirement.

When paying Social Security, you have to consider some percentages, which will determine (always depending on the contribution base that we choose) the fee that we will have to pay month after month. Thus, the minimum payment is 29.90%, including common contingencies and coverage for pregnancy and lactation. It means that someone who uses the minimum contribution base (932.70 euros) must pay 278.88 euros each month (provided that the Government does not decide to increase the minimum base). If you bet on the maximum, the amount will rise to 1,137.31 euros.

The optional coverages are those for cessation of activity, which represents an increase of another 2.2% in the monthly fee, and that of professional contingencies, the percentage of which varies depending on the activity you dedicate yourself to and the mutual you choose. Social Security has a table on its website that details how much each professional who takes out this coverage must pay.

What Is Included And What Is Not Included

As we said, paying the minimum fee, regardless of the basis we choose, will give us access to benefits for common contingencies and non-work accidents. We will be entitled to a temporary disability allowance for common contingencies, health care, and a blessing for risk during pregnancy and breastfeeding. We can also take care of minors affected by a severe illness, and you will be covered in case of permanent disability, death, and survival due to common contingencies, as well as maternity and paternity.

The benefits can be extended by cessation of activity (although significant losses must be demonstrated to access this aid) and by professional contingencies, which extends health care through the mutual of our choice, subsidy for risk during pregnancy and breastfeeding ( without having to pay the mandatory 0.10% of the minimum fee) and other benefits derived from work accidents. 

Choosing the base and the fee to pay is one of the most critical decisions every self-employed worker must make before starting their activity. Many face doubt when launching their businesses: deciding between creating an SME or establishing themselves as a freelancer. This dilemma is as difficult to solve as performing different accounting management tasks.

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