If you are planning on living and working in the Costa del Sol or another region of the country, the social security system is something you must become familiar with.
Payment into the social security system in Spain is required in almost
all cases, apart from in a few situations that are covered below. The
system is very efficient, and although you can expect the payments to
be slightly higher than what you might be used to, the benefits of the
system are considerable.
What Do the Payments Cover?
The social security system is very comprehensive and we would suggest that
you make arrangements to sort out your payments as soon as possible. For
those of you just starting to make your payments, these will cover you for
periods of unemployment (for employees), all of your healthcare needs, any
injury payments that come up and state pensions. Paying into the social
security system is essential for anyone working in the country, and failure
to do so could lead to the possibility of hefty fines.
Social Security for Employees
Where employees of a company are concerned, this is very often the
most cost-effective means of making the social security payments, due
to the fact that the employer is usually responsible for the majority
of them. Smaller payments will also be deducted from you own wages, and
these will depend upon the type of work that you are involved in and
the amount that you earn.
In Spain, a system exists by which a nómina is established, which means
that there are minimum and maximum payments that employees can be
expected to make. A general program of payments exists for the
majority of workers, but for those who are working in certain
specific areas, including civil servants, those working in the military
and agricultural workers, a different system of payments is made.
It is common for the employer to sort out all the necessary arrangements
required for social security payments on the employee's behalf. However,
if for some reason the employer fails to do this, the employee will
have to register at a social security office, taking along proof that
they will be working in Spain. They will need to take along a passport,
proof of residence, a birth certificate and a marriage certificate, and
in some cases translations may also be required.
Unemployment benefits are included on the employee scheme, and the
amount that the employee is entitled to receive is worked out by the
amount of contributions that have been made over the last six months.
In all cases, you must register as unemployed within two weeks of
being out of work.
Social Security for the Self-employed
If you are going to be self-employed, we would warn you that the system
is slightly different than for employees. The main difference is that
the social security payments are higher because there is no employer
to pay the costs.
One thing that we would remind those of you who are self-employed is
that, contrary to the general scheme in place for employees, there
are no unemployment benefits. Also, you are entitled to receive a
pension as long as you have been contributing to the scheme for at
least fifteen years, and two of these years were in the fifteen
years prior to taking retirement.
It is also a matter of consideration that even if you earn no money
in a particular month, there is still a minimum payment that has to
be met. However, a maximum payment also exists, meaning you will never
have to pay over a certain amount.
Social Security For Employers
As mentioned previously, employers have to make larger social security
payments on behalf of their employees. There are also certain other
responsibilities on the behalf of the employer, details of which will
be provided in full by the tax office. If you are setting up a
business in Spain, you will also have to acquire a social security
identification number before commencing trading.
Who Doesn't Have to pay?
Although everyone working in Spain in any capacity will usually have
to make social security payments, Spain has agreements with all the
EU countries as well as a number of others, including the US, that
for the first year of working as an employee for a Spanish company,
you can continue to pay into your own country's social security system.
In special cases, this could stretch to two years, and in both cases
the E-101 and E-102 forms are required respectively.
Related Documents: Obtaining Your NIE Number | Starting A Business In Spain
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