20% Of Self-Employed With A Flat Rate Earn 24300 Euros Per Year

The crossing of data from the Social Security and the Tax Agency that the Executive ordered in order to prepare the reform of the Reta so that the self-employed contribute in the future based on their real income leaves striking figures, mainly in the analysis of those workers that will benefit from the flat rate -the super-reduced fee to encourage entrepreneurship in our country-. 20% of the 498,090 self-employed in this situation obtain a net return of more than 24,350 euros per year.

If we look at the figures that the crossing of data throws up. In the income bracket between 20,000 and 30,000 euros per year, a total of 31,962 freelancers pay the reduced flat rate fee to Social Security with computable benefits of 24,350 euros on average.

In the range of 30,000 to 40,000 euros, a total of 12,194 flat-rate freelancers obtain net income of 34,449 euros per year; While in the section between 40,000 and 45,014 euros there are 3,342 Reta workers in the phase of super-reduced quota receiving benefits of 42,376 euros per year; and in the section between 45,014 euros and 48,841 euros, 1,887 self-employed workers are registered with a flat rate and receiving returns amounting to 46,860 euros per year. In the last section, more than 48,841 euros, there are 10,901 beneficiaries of the flat rate with earnings of 111,099 euros per year.

However, it seems clear that the debate on the effectiveness of the flat rate seems to enter the Reta reform negotiating table. From UPTA, one of the associations representing the group, they point to the limited success of the current model: according to the latest data from May 2021, approximately 15% of Spanish self-employed are enjoying this help and, however, only 13 % of these self-employed workers, about 63,000, survive in employment after two years.

It should be remembered that the flat rate for the self-employed is a measure to promote the group that consists of the payment of a reduced monthly fee, of 60 euros, to Social Security for two or three years, instead of the 286.15 euros that constitute the minimum monthly fee in 2021.

Change of model
They point out from the representative organization of the self-employed group that, furthermore, this flat rate model has been the refuge for all these fraudulent self-employment activities, such as what happened recently with the rider of the distribution platforms. In addition, there is a kind of perception of refuge in the self-employed regime for thousands of unemployed from the crisis who decide to start a business given the low economic risk involved in undertaking with this flat rate, which has caused a transfer from unemployment to Reta in the last year and a half.

The amounts proposed by UPTA for its model range from 4,050 euros to 9,600 euros, depending on the particularities of the beneficiary, the same with which self-employed workers who benefit from the flat rate are being rewarded. The proposal, as confirmed by sources from the organization to elEconomista , has been transferred to the Ministry of Labor and Social Economy to be processed as part of the reform of active employment policies proposed by the group.

The organization also suggests to the Government that the self-employed who decide to undertake can reconcile the collection of unemployment benefit beyond the nine months established by law and not lose the accumulated surplus unemployment, so that said surplus is transferred to a future benefit for cessation of activity.

Shelter from unemployment
“The false belief that this system to promote self-employment is the correct one has led us to an excessive expenditure of Social Security, without there being a correspondence with the implementation of stable economic activities, it has only served to mask the reality of the market of self-employment. Spain spends, as a whole, slightly more than 1,200 million euros on this aid, 700 million from Social Security, and the rest is completed with the complementary aid of some autonomous communities “, denounce from UPTA, one of the associations representing the group, arguing that the replacement rate that exists among the self-employed who enter and leave the system has not changed in recent years.

“In 2020 some 650,000 self-employed workers joined and as many disappeared. This trend has not been corrected over the last decade, rather the opposite,” they point out from the association about the high turnover in the group and the increase in the intensity of membership in times of crisis.