Lorraine Williamson
After days of mounting criticism, the Spanish government has backtracked on planned increases in social security contributions for the self-employed. However, the move offers little reassurance to those already struggling to make ends meet. For Spain’s autónomos, this latest U-turn feels like another chapter in a long-running saga of high costs, bureaucratic hurdles, and policy uncertainty that discourages entrepreneurship rather than nurturing it.
Minister of Social Security Elma Saiz confirmed on 20 October that the increase for lower-income autónomos would be frozen “temporarily”. This followed an outcry from trade bodies and opposition parties. The decision came just 24 hours after the measure was published in Spain’s Official State Gazette (BOE). Moreover, it suggested a government caught off guard by the scale of the backlash.
Pressure from all sides
The reversal was driven by a wave of criticism from across the political spectrum. The Partido Popular and Vox accused the Sánchez administration of punishing small business owners during a fragile economic recovery, while the national federation ATA called the plan “incomprehensible and harmful.”
Even within the Socialist Party (PSOE) itself, dissenting voices urged caution. They warned that the government risked alienating one of the country’s most economically vulnerable groups. Facing both internal rebellion and public anger, Prime Minister Pedro Sánchez ordered a full review. He insisted that supporting self-employed workers “remains a priority.”
A system still under construction
The now-suspended increase was part of Spain’s new progressive contribution model, introduced in 2023 as part of the EU’s post-pandemic recovery reforms. The intention was to tie contributions more closely to actual income — a long-overdue correction to the previous flat-rate system that saw low earners paying disproportionately high fees.
In theory, the reform promised fairness. In practice, however, it has produced confusion and unpredictability. Many autónomos report being worse off than before, with shifting income brackets, unclear rules, and little consistency from one fiscal year to the next.
Even with the freeze, the lowest income brackets — those earning under €1,166 per month — still pay around €260 monthly, while higher earners contribute well over €500. For many, these figures remain punishing, especially in a climate of rising inflation, fuel costs, and tight credit.
Reform, recovery, and reality
The contribution overhaul was among several structural reforms Spain pledged in return for access to EU recovery funds. Officials maintain that the model aims to make the system more equitable, redistributing the burden toward higher earners and reinforcing the social safety net.
Yet for many self-employed professionals — from freelance designers and translators to plumbers and café owners — the reality is one of dwindling margins and limited support. Associations representing autónomos argue that the scheme, though progressive in principle, risks stifling small-scale entrepreneurship, particularly among younger workers and women.
Frozen for now, but not forgotten
Under the government’s revised plan, the 2026 contribution rates for the lowest three income tiers will remain unchanged, while modest increases of around 1% to 2.5% will apply to higher bands. Consultations with trade unions and business groups are promised in the months ahead, but no clear timeline has been set.
The freeze may offer temporary relief, yet few see it as a victory. “The problem isn’t just how much we pay,” one Málaga-based freelance consultant stated. “It’s that every year the rules change. You can’t plan, you can’t grow, and you certainly don’t feel supported.”
High costs, low confidence
Spain’s self-employed sector — nearly 3.3 million strong — remains one of Europe’s most burdened. Aside from social security contributions, freelancers face quarterly VAT returns, advance income tax payments, and a tangle of administrative obligations that many struggle to navigate without professional help.
Despite government rhetoric about promoting innovation and entrepreneurship, Spain continues to rank below the EU average for new business creation. Analysts warn that unless costs are reduced and stability restored, the country risks discouraging the very people it depends on to drive local economies, especially in rural and tourist-dependent regions.
Stability still out of reach
While the government insists that the progressive contribution system will remain, the repeated policy shifts have left autónomos weary and sceptical. The promise of consultation may ease tensions temporarily, but without deeper reform — one that balances protection with affordability — confidence in Spain’s self-employed sector will remain fragile.
For now, the fee hike may be frozen, but the chill of uncertainty persists.
Sources: El País, RTVE, Ondacero