At the beginning of 2024, various modifications to Spanish labour legislation have been approved, among which we highlight the following:
1. Minimum Interprofessional Wage (SMI)
The SMI has increased by 5% compared to 2023. Therefore, the SMI increases from 15,120 euros gross per year (2023) to 15,876 euros gross per year (2024), which is equivalent to 12 payments of 1,323 euros or 14 payments of 1,134 euros.
2. Social Security contribution bases
The maximum contribution base has also increased by 5%, from 4,495.50 euros per month (2023) to 4,720.50 euros per month (2024).
The minimum contribution base for 2024, which is expected to be aligned with the SMI, i.e. 1,323 euros per month, is currently pending approval.
3. Intergenerational Equity Mechanism (MEI)
The MEI consists of progressively increasing Social Security contributions in order to guarantee the sustainability of the pension system.
This mechanism came into force in 2023 and resulted in an increase in social security contributions equivalent to 0.6% of wages, with 0.5% paid by the employer and 0.10% by the employee.
This percentage now increases in 2024 to 0.7%, with 0.58% borne by the company and 0.12% by the employee.
The plan is to implement an annual increase of 0.10%, reaching a total increase of 1.2% in 2029.
4. Compulsory Social Security registration of interns
All interns must be registered with the Social Security, regardless of whether the internships are paid or unpaid. This obligation to register with the Social Security includes both students who carry out training and academic internships included in training programmes (university degree, master’s and PhD) and those who carry out professional training internships.
Furthermore, the new regulation on interns implies a significant increase in Social Security protection and coverage for this group, even considering this period of registration with intern status as a countable contribution period for retirement pension purposes.
In any case, internships (paid or unpaid) will not pay MEI contributions and will receive a 95% Social Security contribution reduction on common contingencies.
5. Social Security contributions for self-employed workers
In 2023, the new contribution system for the self-employed came into force, which consists of calculating the monthly Social Security contribution payable on the basis of their net monthly income, establishing a scale of monthly contributions applicable to the different tiers of net income.
This new contribution scheme for the self-employed continues to be applied in 2024, although the differences between low and high net income tiers will be accentuated.
Thus, compared with 2023, the scale applicable for 2024 reduces the burden for the self-employed in the lowest tiers, but increases the burden for those in the upper brackets. By way of illustration, this scale for 2024 implies the following:
– Tiers 1, 2, and 3 have monthly contributions between 2.1% and 3.8% lower than in 2023.
– Tiers 4, 5, and 6 pay the same contribution as in 2023.
– The higher tiers (7 to 15) have an increase of between 2.5% and 6% compared to 2023.
6. Pension revaluation
Social Security contributory pensions have been revalued by 3.8% for 2024. This percentage corresponds to the average inflation between December 2022 and November 2023.
The maximum contributory pension is increased from 42,829.29 euros gross per year (2023) to 44,450.56 euros gross per year.
Minimum pensions, non-contributory pensions and the Minimum Living Income have been increased by 6.9%, while widow’s and widower’s pensions with family dependents have increased by 14.1%.
We should also highlight two relevant measures that are currently on the government’s agenda and could eventually have an impact as early as 2024:
1. Parental leave: progressive increase from the current 16 weeks to 20 weeks, for both fathers and mothers.
2. Progressive reduction of the working week from the current 40 hours a week to 37.5 hours a week.
