26 oct 2018
Spanish employers pay the highest social contributions in the EU

Companies would have to pay up to €1.761 billion per year due to the rise in Social Security costs

Spanish companies would pay up to €1.761 billion a year if the government's announcements affecting labour costs are finally implemented. The increase of up to 12% in the maximum contributions would translate into an increase in costs for entrepreneurs of €1.761 billion.

Companies would have to pay up to €1.761 billion per year due to the rise in Social Security costs

CEOE believes that these increases in Social Security costs for companies would have a direct impact on employment at a time when, as we have been reiterating, the effects of the economic slowdown are starting to show.

CEOE wants to recall that Spanish employers are the ones with the highest social security contributions in the EU, both as a percentage of GDP and as a percentage of tax collection. Specifically, Europe’s average is not higher than 8% in terms of GDP and 20% in terms of revenue, while, in Spain, these same items stand at 8.2% and 24.7% respectively.

Below are the tables reflecting the increase in Social Security costs and the comparison to the European Union.

1.- Increase in Social Security costs in 2019

The information detailed below refers to the General Scheme and all contributions are included (CC, ATEP, Unemployment, FP, FOGASA).

  • The cost of the maximum bases has been calculated considering that it affects one million workers, given that the available figures set the number of people registered with the Social Security at the maximum basis in August 2017 at 1,065,198.

In the event of a 10% increase, the annual cost for companies amounts to more than €1.467 million, broken down as detailed below:

In the event of a 12% increase, the annual cost for companies amounts to more than €1.761 million, broken down as detailed below:

2.- Comparison to Europe

As may be seen on the table below, Spanish employers pay more in social security contributions than the average in the EU and the Eurozone, both as a percentage of GDP and as a percentage of tax collection.

Specifically, Europe’s average is not higher than 8% in terms of GDP and 20% in terms of revenue, while, in Spain, these same items stand at 8.2% and 24.7% respectively.

If these figures are compared to the same ratios in the main European countries, in Germany and the Netherlands the Social Security contributions paid by employers represent 6.6% and 5.2% of GDP, respectively, clearly lower than the figure for Spain. Meanwhile, France exceeds Spain, while the ratios in Belgium and Italy are similar to Spain’s.

In terms of collection, Spain and France are the countries where social contributions paid by employers represent the greatest weight, while it is clearly lower in the rest of the large European economies.