The pressure to meet the stability objectives in a context of a sharp increase in public spending once again decays the Government for raise employment taxes and, therefore, the costs to the companies in a moment of strong deceleration of the activity and of fall of sales. A scenario aggravated by major administrative obstacles generated by the hourly register and the threats to make the labor relations framework that designed the 2012 labor reform more rigid.
Waiting for a Budget that will enable it to apply a multiple tax increase that will once again put pressure on the business class, the Executive opts for the route with a strong collection capacity: maximum social contribution bases. This will be a new obstacle to the activity, but more resources to deal with 18,000 million deficit that has the pension fund, the main impediment for Spain to meet the deficit target.
Spain needs to ensure an adjustment of the environment of seven tenths, more than 8,000 million euros, that Brussels demands that they be structural, that is, not for the cycle, so that the public deficit drops to 1.8% of GDP. Sánchez is obliged to comply with Brussels, but also with Podemos and the expensive program he agreed with this training with measures such as minimum vital income The Minister of Social Security, José Luis Escrivá, advanced last week.
His department finalizes a royal decree law that will soon be approved by the Council of Ministers and to which ABC has had access, which includes an increase of 2.8% in the maximum contribution bases, which correspond to the highest salaries, which will remain at 4,184 gross euros per month compared to the current and extended 4,070 of 2019. By raising the Executive base by 2.8%, what it does indirectly is Increase what those who earn the most have to contribute. The measure will affect more than one million workers.
More than the economy
This new twist means increase this bill above what the government expects that the economy grows this year (1.6%), in addition to being above 0.9% of what increased pensions and what prices are expected to grow, and also exceeds the increase applied to public employees This year, 2%.
Increase the taxation of higher salaries, but the cost of those who pay the lowest wages will also rise, since the minimum bases will also grow in 2020. In that case, the increase will be higher, of 5.5%, the same percentage in which the minimum wage has grown this year, given that both indicators are referenced. For this year the minimum will be set at 1,108 euros compared to 1,050 last year. The rise in the minimum wage and minimum bases will mainly affect SMEs, especially those of smaller size and the self-employed with wage earners, where the lowest salaries are concentrated.
The approval of both increases was approved on February 4 by the Council of Ministers by the way of the royal decree. In order to raise the maximum bases, a decree law and its passage through the Congress of Deputies are required since the Executive changes them on their own will to be able to collect more and approach the stability objective before approving the tax battery in the coming months . For this reason, Social Security will gather all the new contribution rules in the aforementioned royal decree law.
The publication of these contribution bases arrives delayed compared to other exercises, what has generated uncertainty among companies, as reported by ABC. The order that regulates it is traditionally published at the end of the month of January and it establishes the requirements for hiring. That is, the maximum and minimum ceilings for the contribution bases of the different professional categories, and on them it is determined how much the company and the worker themselves must contribute to Social Security in the general regime. In addition to update groups which include the self-employed, farm, household and sea workers, with different contribution bases and still pending to be established by 2020.
In practice, the fact that these quotation rules are not yet published has not prevented contracts from being made, but for this, the contributions of 2019 are being taken into account. This means that once the corresponding ones for this exercise are published, the companies must update all the payrolls of their workers and adjust accounts with the Social Security which, in the practice, it will be a considerable tangle, in addition to an economic outlay for arrears that not all companies will be able to allow it. Many of them even lack programs that can update payrolls with the corresponding adjustments, which Social Security itself must also communicate. A complex process
The rise of maximum bases will have effects from April 1 and the minimum bases will be applicable from January 1, as reflected in the royal decree law of urgent measures in the matter of contribution to Social Security and for concepts of joint collection to which this newspaper has had access. In this rule, the Government recognizes, as this newspaper advanced, that the lack of contribution standards is «Generating uncertainty in companies and workers in fulfilling their contribution obligations. Hence, he points out, the extraordinary and urgent need for approval of this norm.
He argues that “the time that must necessarily pass in the processing and approval of the Budget Law for the year 2020 implies a detriment to the financing of the Social Security system due to the lack of updating the contribution bases ».
The new increase of the highest bases of the system comes after the outstanding increases in business costs approved last year. In 2019 the minimum wage (SMI) grew to 900 euros, 22.3%, the same rise in minimum bases and 7% increased the maximum base. This 2020 the SMI has had an increase of 5.5%, up to 950 euros and the minimum bases have grown in the same proportion. That is the minimum wage adds almost 30% increase in two years, the same as the minimum bases and 10% maximum quotes.
The economic slowdown and the impact on the labor market have had factors such as labor cost growth They have been noted in the evolution of employment. In 2019, 402,300 jobs were created, which means the worst data since 2013, last year of the crisis, and 30% less occupancy than a year earlier (163,900 positions), according to the fourth quarter EPA.
At the head of Europe
Today Spanish companies are among those who pay more employment taxes in Europe. Social contributions today represent 24% of total corporate taxes in Spain compared to 16.7% in Germany or 11.3% in Ireland, which makes, again increase business invoice. And almost six percentage points of average employment taxes paid in the Europe of the 28.