Due to the publication of the Royal Decree Law 16/ 2013, 20 of December, on measures to promote stable employment and improve employability, the article 109 of the General Social Security Law has been modified. As a consequence, the SS contribution base has been broadened. As a general rule, before the new regulations, most payments in kind were disregarded for Social Security contributions, so the overall cost for the employer could be largely reduced by using fringe benefits instead of cash payments. However, this had the drawback for the employees of reducing future SS benefits, since these are determined according to the contributions paid to the SS scheme.
The new amendment will mainly affect low to medium paid employees. High earners (EUR 3.500 € per month or more) will remain unaffected, because they are already above the maximum statutory SS base, so their contributions are capped on this amount.
Are defined as concepts included in the contribution basis, among others, the following:
- Companies from January 2014 are required to contribute for the remuneration in kind paid to their workers.
- The total amount to employees for bonuses of transport and distance.
- Improvements in social security benefits, except those for temporary disability.
- Assistance allowances with the exception of those corresponding to the education expenses of the employee or assimilated, when it will be required for the development of their activities or the characteristics of the job position.
- The totality of the normal child support expenses and stay generated in the same municipality in the place of usual work of the employee and the place which constitutes its main residence.
On the other hand, it shall not count on the contribution base.
- Allocations for the employee travel expenses who travels outside his usual workplace to carry out the job in different place when he uses public transport ways, provided that the amount of that expenditure will be justified by invoice or equivalent document.
- Allocations for the employee travel expenses who travels outside his usual workplace to carry out the job in different place, which are not included in the previous section, as well as for normal living and accommodation expenses generated in different municipality from the regular workplace of the receiver and the place which constitutes his residence, in the amount and to the extent provided in the state law which regulates the personal Income Tax.
- Death compensations as well as those compensations related to transfers, suspensions and dismissals.