Intergenerational Equity Mechanism (IEM)

Contribution mechanism. The Intergenerational Equity Mechanism (MEI) is a new type of contribution that has started to be applied as of 1-1-2023 and affects both employees and companies as well as self-employed professionals. The aim of this mechanism is to prevent the younger generations from assuming the entire burden of retirement, distributing contributions in a balanced way and strengthening the pension system in the long term.

Amounts. This new contribution will be 0.6% of the contribution base for common contingencies. The worker will assume 0.1% of the total and you will have to assume the remaining 0.5% (the self-employed will assume the entire 0.6%). This means about 12 euros per month for a regulatory base of 2,000 euros (in this case, 10 euros would correspond to the company and 2 euros to the worker).

Temporary. This measure is temporary. The State intends to collect around 40,000 million Euros for the Social Security Reserve Fund and, when this figure is reached, the mechanism will be reviewed. Remember to incorporate this novelty in the contribution in your payroll management program.

 

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