If you want to start working on your own, one of the first things that you will have to do is to sign up for the Special Scheme for Self-Employed Workers. Also known by its acronym RETA, it is the regime that regulates the Social Security contribution of self-employed workers in Spain. If you want to know better how this regimen works, we will explain it to you in more detail.
Who has to register for the RETA?
In general, all workers over 18 years of age who regularly, personally and directly perform an economic activity for profit without being subject to a contract with a company.
Spouses and family members up to the third degree who collaborate with you regularly, personally and directly, must also be registered in the RETA, as long as they are not hired as salaried employees. They are what is known as collaborating relatives.
Also included in this regime are book writers, economically dependent self-employed workers, those professionals who carry out an activity on their own account that requires incorporation to a Professional Association that has been included in the RETA, the industrial partners of regular collective societies and of limited partnerships, worker members of Associated Work Cooperatives, as well as partners of property communities and civil partnerships.
What does the RETA offer to the self-employed?
Through this contribution scheme, Social Security provides you with a series of coverages as a self-employed worker, some of which are mandatory and others are optional:
- Temporary disability due to common contingencies: to be covered in those situations in which you cannot carry out your work, either due to a common illness or due to a non-work accident. You must formalize this option with a Social Security mutual insurance company for occupational accidents and diseases at the time you register with the RETA.
- Work Accidents (AT).
- Occupational Diseases (PD).
- Due to cessation of activity, also known as the unemployment of the self-employed.
- By risk during pregnancy and lactation.
What is the monthly fee for freelancers?
The monthly fee will depend on the coverage and the contribution base you choose. As being a self-employed worker you will not have a fixed salary, Social Security needs to have a reference base salary to be able to calculate your self-employment quota. The contribution base is nothing other than that “theoretical salary” that you apply to yourself as a self-employed worker.
The Government establishes a minimum contribution each year (for 2018 they are € 919.80 per month) and a maximum (€ 3,751.20). You must choose a base that is between these amounts, depending, in addition, on certain circumstances, such as your age or your professional activity, which you can know in detail in the information section enabled by Social Security regarding the bases and types of contribution in the Special Regime for Self-Employed Workers.
The fee will be calculated by applying the contribution rate (that is, the percentage determined by the government for the self-employed) to the contribution base you have chosen. For example, if you opt for the minimum base, including temporary disability and coverage for risk during pregnancy and lactation, your self-employed quota would be 29.90% of € 919.80, that is, 275 euros. If you set a contribution base of € 1,500 per month, the fee you will have to pay will be 448.5 euros.
However, this base is not eternal and you can modify it up to four times throughout the year, as stated in the new Law on Urgent Self-Employment Reforms, approved at the end of 2017. Another novelty introduced by this regulation is that On the first three occasions throughout the year that you sign up for the RETA, the fees will be paid according to the actual days you sign up, instead of paying the full monthly fee.
Also, remember that if you sign up for the RETA for the first time, you can benefit from the so-called flat rate. Also if you have not contributed to this scheme in the last two or three years, in the event that you have previously enjoyed this bonus. These are the fees that you will have to pay:
- First 12 months: 50 euros if you contribute for the minimum base or get up to 80% bonus in case of contribution for a higher base.
- Months from 12 to 18: 50% reduction in the fee during the second semester
- Months from 18 to 24: 30% reduction during the following semester.
Likewise, women under 35 and men under 30 are entitled to a reduction on the quota of common contingencies during the 12 months following the termination of the flat rate, equivalent to 30% resulting from applying the minimum rate in force (29, 80%) to the minimum contribution base of this scheme.
Where do you have to register?
You have to go to the offices of the Social Security Treasury and fill out the TA form. 0521, a two-page document, consisting of seven sections.
Applicant data: it is time to enter your personal data: name, surname, address, social security number, mobile phone, email …
Data related to the request: you must select the reason for which you are submitting the request (registration, cancellation, or data variation). You must also enter the date on which you started/stopped or changed your economic activity. In another box, if this is the case, you can specify the reason for the cancellation of your company or that you vary the identification data of your company, while in another box you must enter the DNI of the new owner of your company (if any).
Data related to professional activity: in this block, you must specify the economic activity that you are going to carry out, the name of your company, the Economic Activities Tax (IAE), and the business address. The CNAE number will be provided by Social Security when you submit the form. As the last step within this point, you must mark with an X, if your situation is between any of the following assumptions:
- Women incorporated into work after motherhood.
- Autonomous integrated in a professional college.
- Seasonal worker (where you will include the phase of cessation of activity).
Options regarding the contribution base: in this section, you must enter the chosen base (minimum, maximum, or other), as well as the Mutual Collaborator with Social Security, which will be the one that covers the risks of the coverage that you also choose in this block
Details of your bank account: Finally, in section 7 of the TA form. 0521 you can indicate the data of the bank account in which you want the payment of the self-employed fees to be domiciled.
What documentation is needed to register for the RETA?
In addition to the aforementioned TA. 0521 completed, you have to present the copy and the original of the registration form at the IAE, a photocopy of your ID, the Social Security membership card (if you have worked previously and, if not, you must do this procedure simultaneously), and the document of adhesion to a mutual of accidents of work to be able to receive an economic benefit in case of temporary incapacity. You must also present the certificate of the corresponding school, for the activities of Professional Associations.
And don’t forget that, from the moment you register with the Treasury, you have a maximum of 30 days to register for Social Security.
And it is that the beginning of any business and entrepreneurial adventure is complex. And, sometimes, you have to rely on financial institutions to help you fulfill your dreams. We want to help you and offer you a series of facilities, from personal loans to debit cards specially designed for the self-employed and SMEs. So, if you are thinking of starting a business, do not hesitate, and take a look at our accounts for companies.