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Introduction

Article 41 of the Spanish Constitution states that "The public authorities will maintain a public Social Security system for all citizens, which guarantees sufficient social benefits and support in situations of need". The Social Security, through its Managing Bodies (National Institute of the Social, Security, Social Marine Institute, Institute for Migration and Social Services, National Health Care Management Institute), Collaborating Bodies (Mutual Societies for Work-Related Injuries and Occupational Diseases), Common Services (General Treasury of the Social Security and IT Management) and Independent Organisations such as the Public State Employment Service and the Wage Guarantee Fund, among others, is responsible for managing the public protection system, which guarantees citizens maintenance in situations of need. This guarantee is mainly funded by the revenue from social contributions paid by employers and workers. Therefore one of the most important challenges for the public pension system is to ensure they are both sufficient for their entitlement holders and sustainable, that is, guaranteed for the future.

The General Treasury of the Social Security (as the System´s general fund) is responsible for collecting the social contributions from the individuals liable to make them in advance and on a monthly basis, with the single aim of covering risks and situations of need, guaranteeing to the people who make contributions that they will receive the same benefits that were being paid to those who came before them (known as a distribution system, in which each generation bears their current risks and the risks of past generations, in exchange for their futures being supported by future generations).

The basic and principal sources of funding for the public pension system are contributions in the form of payments made by employers and workers to the various schemes that make up the System. The method and amount to pay of their compulsory contributions will depend on the scheme in which they are included due to the activity they carry out. A constant and consequence of this is that the greater the salary, the higher the contributions and the better the pension, in short; more effort means more pay in the future.

The obligation to make contributions involves carrying out the necessary activities through which the individuals liable to make contributions provide financial resources to the Social Security System. The basic elements of this are the contribution base, rate and payment.

The formula is: Contribution = Base x Rate / 100 – Deductions

The payment of Social Security contributions, which have become due over the period to which the payment refers and, where appropriate, the applicable deductions and surcharges, shall be made by the individuals liable to make contributions by filling out the contribution documents determined by the Ministry of Employment and Social Security.

Let us move on to defining the different concepts that make up the dynamics of contributions.

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