Extension of the former Flat Rate and Zero Quota

The Social Security contribution rebate known as the ‘Flat Rate’ changed with the entry into force of the new system of contributions based on real income on January 1. However, the extension of the old Flat Rate and the Zero Quota allow the self-employed to reduce their Social Security contributions in their initial stages,

Self-employed persons from certain autonomous communities can continue with the Flat Rate

The self-employed are very familiar with the old Flat Rate model in which 80% of the contribution was subsidized during the first year as a member of the RETA. In this model, from month 13 onwards, the quota bonus was 50% and from month 19 to 24 it was 30%. In the event that they chose the minimum base, the 80% subsidized contribution would be 69 euros per month. Then you would pay 146.97 euros per month and end up paying 205 euros per month.

Despite the fact that this model has been reformed this year, the self-employed who applied for the Flat Rate before December 31, 2022 (depending on the Autonomous Community where they carry out their activity), can still apply for the extension of the old Flat Rate during the second year of activity. At present, Madrid, Andalusia, the Canary Islands, La Rioja and Castilla y León are keeping the call for applications open to extend this bonus for another year.

Let’s take an example: a freelancer started his/her activity on November 1, 2022 in Madrid, on November 1, 2023 he/she will conclude his/her activity on November 1, 2023. its first year of activity and under the previous Flat Rate model will pay 50% of the quota instead of the 80% subsidy. This person you can request an extension of assistance from the Community of Madrid. (if eligible) and enjoy for a second yearThe flat rate will be reduced to 80% until November 2024, i.e., you can continue paying the same amount you paid in the first year of the flat rate.

New Flat Rate for self-employed workers registered as of January 1, 2023

Since the beginning of the current year, people who register as self-employed have a Flat Rate different from the one we have explained above, in which they maintain a fixed fee of 80 euros per month for two years. The first year is universal for all self-employed workers who start an activity and, during the second year, only those whose net income has not exceeded the Minimum Interprofessional Wage ( 15,120 euros per year) will continue to pay 80 euros per month. If the self-employed person declares in his/her income tax return a net income (income minus expenses) higher than the SMI, he/she will lose the right to apply for the Flat Rate during the following 12 months. You will only have been entitled to enjoy it for one year.

Do not confuse the Flat Rate with the Zero Quota

The Zero Quota is a measure in force in several autonomous communities that aims to support and encourage the self-employed during the initial stages of their activity and that benefit from the new Flat Rate. Through this aid, beneficiaries can enjoy a 100% subsidy of their social security contributions during the first 12 months of affiliation to the Special Regime for Self-Employed Workers (RETA). This means savings of up to 960 euros per year in social security contributions.

In most of the regions where this measure is applied, at the end of the first year of activity, the autonomous community reimburses the total amount of the quotas paid. As of January 2024, the territories where this bonus will be available are Andalusia, the Community of Madrid, La Rioja, Murcia, Castilla-La Mancha and Castilla y León.

If the person has registered as self-employed in 2023 and is covered by the new Flat Rate, he/she will be able to request and benefit from the Zero Quota, depending on the autonomous community where he/she has his/her tax domicile.

The extension of the former Flat Rate for self-employed workers who started their activity before 2023, and the Zero Quota for those who are registered as of this year in certain autonomous communities, are measures to support self-employed workers in the initial stages of their activity.

Activity integrated in the project “Entrepreneurship and Integration” financed by the Ministry, Social Security and Migration.