If you intend to work and live in Spain, then we would recommend that you become acquainted with the local social security system. A failure to understand the system could prevent you from getting the benefits that you are entitled to, as well as raising the possibility of incurring fines for failing to make the appropriate payments.
As a general overview for foreigners, the Spanish social security system is very efficient and provides good benefits to those who need them. You should be warned that the payments are generally considered to be high compared to what you may be paying in your native country, but as a result of this the general standard of care is excellent.
Social security payments are expected from everyone who is working in the country, and these will cover a range of benefits that you will be entitled to. Failure to make payments could lead to large fines being levied, so it is good to ensure that you know exactly what is expected of you.
You will also be required to get a social security number and a medical card at a seguridad social office, which will require you to take along your passport.
The only instance when you may not have to make social security payments is during the first year of your time spent working in Spain if you are working as an employee for a company. If you want to benefit from this then you will have to fill out an E-101 form, and this will allow you to continue paying into the social security system of your native country for the first year. In some circumstances it is also possible to carry on with this arrangement for the second year spent working in Spain, although you should always find out if you are able to do this in advance to avoid facing fines.
Types Of Payments
If you are going to set up a company in Spain and employ staff then you will be required to make larger social security payments than your workers as you will have to make payments on behalf of your employees. You will also need to have a social security identification number in order to open a business in Spain, and we would advise against conducting any business without one of these.
If you are an employee, the situation is slightly better in terms of payments. As the employer has to pay the majority of social security payments, employees will only have small amounts being deducted from their payments. Payments fall between the minimum and maximum expected payments for employees, know as a nómina, and they come under a general system of payments for most workers. However, workers in certain sectors, including from those working as civil servants, the military and agricultural workers, fall under a different system of payments.
Self-employed workers in Spain will have to work out their payments by a different system. We recommend that you are aware that the payments are going to be higher for the self-employed as you have no employer to make them on your behalf. There is also a minimum amount every month which has to be made, so that if you are experiencing a month of low business then this could be more of a problem.
Types of Benefits
For people working in Spain, social security payments relate directly to certain benefits that they are entitled to. As well as medical care and maternity leave, unemployment benefits are also covered. If a person becomes unemployed, then they will be entitled to receive benefits depending on the amount that they have paid into the social security payments. As a general rule, workers are required to have made 360 days worth of social security payments within the last six years in order to qualify for unemployment benefits, and unemployment benefits can only last for up to two years.
The amount that a worker will receive is also subject to the amount paid in social security payments over the last 180 days before the request for benefits was made. However, as there is a minimum and maximum amount of unemployment benefits, even if you have made no social security payments in the previous 180 days then you are still entitled to payments.
Another major advantage of paying into the social security system is that you may be entitled to a pension upon retirement. At the time of writing the retirement age is 65, but we would advise you that this could change at any time.
In order to claim a state pension, workers must have been contributing to the social security system for at least fifteen years of their lives. On top of this, of the last 15 years before retirement they must have been working for two of them. The amount received in a pension will vary from person to person, but is worked out on how much has been contributed to the system throughout the workers lifetime.