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Increase in the Minimum Interprofessional Wage and its effects on the self-employed and companies

Firmalex > Business consultancy > Increase in the Minimum Interprofessional Wage and its effects on the self-employed and companies

The agreement establishes for this year a wage of 1080 euros gross per month in 14 payments. This increase will be retroactive from 1 February, so that workers who receive the minimum wage will see it reflected in their next pay cheque.

The Ministry of Labour and Social Economy and the labor unions have reached an agreement to increase the Minimum Interprofessional Wage (SMI) this year.

This is the third increase since the beginning of the legislature. The aim of this increase is that there will be a progressive revision of the SMI in both 2022 and 2023 and that it will reach 60% of the average wage before the end of the legislature.

Although it is a measure that affects all types of companies, it has a greater impact on the self-employed. It means a considerable rise in costs for them. As the minimum wage rises, so does the minimum contribution base, and as a consequence, so does the self-employed quota, as well as the salaries of their workers, if they have them.

Increase in social security contributions

The rise in the minimum wage will have an immediate effect on the social security contributions paid by the self-employed. The contribution for the minimum base, set at 286 euros, will go up to 289 euros per month. The contribution for the maximum base, currently at 1,233 euros, will reach 1,245 euros per month.

The contributions that will rise are the self-employed contributions for professional contingencies and for cessation of activity, which the increase in the minimum wage will increase from 30.3% to 30.6%, while those for common contingencies and vocational training will remain unchanged.

Thus, contributions will rise by between 3 and 12 euros per month, or in other words, between 36 euros per year for the self-employed who pay contributions at the minimum rate, who make up 86% of the group, and 144 euros for the self-employed who pay contributions at the maximum rate.

Therefore, contributions will increase from 30.3% to 30.6%, with the rise from 1.1% to 1.3% for professional contingencies, in addition to the contribution for termination of activity, which will rise from 0.8% to 0.9%.

Future rises in the SMI

According to the reports drawn up by the Committee of Experts, the SMI will rise by between 6.4% and 10.4% between this year and 2023. Three scenarios were established for the possible increase in the minimum wage. During 2021 the rise would be between 12 and 19 euros; in 2022 between 24 and 40 euros and for 2023 between 25 and 40 euros.

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