This is how the new solidarity fee that the highest salaries will pay in 2025 works to support pensions

The Government has approved by Royal Decree-Law the relevant regulatory development to develop a new social contribution for the highest salaries, as stated in the Official State Gazette (BOE). Specifically, this so-called solidarity quota aims to provide extra income to those workers whose payrolls exceed the maximum base expected from 2025, currently at 56,600 euros per year. This will be the last year that workers who exceed this maximum contribution base do not contribute for a section of their payroll. How does the new quota work?

It is important to first understand that the philosophy of the latest pension reform orients efforts towards income. In the specific case of the solidarity quota, it seeks to correct a gap with Europe: Spain has a lower maximum contribution base (also salaries) than other counterpart countriestherefore there are workers who do not pay contributions for their entire salary.

In the reform package, what is known as destope (eliminating the limit or ceiling) of these maximum contribution bases was addressed. This upper limit will rise with inflation plus an additional surcharge of 1.2 points with the aim of progressively reaching the highest salaries in the system.

In addition, the reform of the then Minister of Social Security, José Luis Escrivá, introduced the Intergenerational Equity Mechanism (MEI), another surcharge that is applied to all payrolls to ‘pinch’ more income destined for the Reserve Fund (the pension piggy bank).

The solidarity fee is an additional contribution that is not contributory, but rather “redistributive.” What does this mean? Like the aforementioned MEI, it serves to generate an extra in the income item that will be used to pay pensions, but does not generate an improvement in the regulatory base that calculates the contributor’s future benefit and could be considered a tax. Definitely: will be used to soften the financial blow of the mass retirement of the baby boom generationbut it has no effect on the pension.

The new solidarity quota will be determined based on the excess of earnings from employed work over the maximum contribution base established in the General State Budget Law of each year under the aforementioned formula (variation of inflation plus 1.2 additional points).

That new share of solidarity It will begin to be applied in 2025 in three sections:

• An additional 0.92% contribution for the part of the salary between the maximum base and 10% higher than that maximum base.
• 1% for the salary range from the additional 10% of the maximum base to 50%.
• 1.17% for the remuneration bracket above the additional 50% of the maximum base.

The previous percentage will increase gradually each year, until reaching: in 2045:

• 5.5% on the part of remuneration included between the maximum contribution base and the amount greater than the aforementioned maximum base by 10%, after growing 0.23 points per year
• 6% on the part of salary included between the additional 10% of the maximum contribution base and 50%, after growing 0.25 per year
• 7% on the part of salary that exceeds the additional 50% of the maximum base, after growing 0.29 points per year

“The distribution of the type of contribution for solidarity between the employer (employer) and worker will maintain the same proportion as the distribution of the type of contribution for common contingencies (that is, the company’s contribution will be 5 times that of the worker). For example, in the year 2045, in the case of the second tranche (6% extra contribution), 5% will be borne by the company and 1% will be borne by the worker,” explains BBVA My Retirement.

This solidarity quota will be applied to workers with higher salaries, that is, those employees who contribute to the General Social Security Regime. Also to employed workers of the Sea Workers Regime and self-employed workers included in this Special Sea Workers Regime. However, Self-employed workers are exempt from this fee.

The (hypothetical) example: those workers who next year have a payroll up to 10% above the maximum base, that is, up to 62,260 euros today, must pay 0.92% as the solidarity for the section that exceeds the maximum base. The company and the worker would pay 0.92% of the 5,660 euros that exceed the current maximum base, up to 52 euros more in social contributions for common contingencies.

Another example (in the long term): those workers who within two decades have salaries 50% higher than the maximum base will have to pay an additional contribution of 7% of the remuneration bracket that exceeds the maximum base. Currently it would correspond to a payroll of about 84,900 euros. The company and the worker would pay 7% of the 28,300 euros that exceed the current maximum base, almost 2,000 euros more in social contributions for common contingencies.