Which Social Security regime applies when you work in your own company?

Terms used

• RETA — RETA is the Social Security regime for self-employed people (autónomos).
• Autónomo societario — An autónomo societario is a self-employed person who works in a company in which they hold a significant share or control.
• Tarifa plana — The tarifa plana is a low flat monthly Social Security fee for new autónomos during their first months.
• Cese de actividad — Cese de actividad is a limited benefit for autónomos who must stop working, similar to unemployment benefit.
• FOGASA — FOGASA is the state fund that pays employees' wages and severance when an employer cannot.

Key rules

• Who is in RETA: Owners who work in their company and hold enough shares, or control it, are generally autónomos societarios, not employees.
• No salary: You still pay contributions when the company pays you no salary.
• Unemployment: RETA gives no ordinary unemployment benefit, only the limited cese de actividad.
• Wrong regime: Being unregistered or in the wrong regime can mean backdated contributions, a surcharge and fines.
• Tarifa plana: Societarios have limited access to the tarifa plana, so confirm eligibility before relying on it.

The short answer

If you own a meaningful share of your company and also work in it, you are generally in RETA as an autónomo societario. You are not in employee-style cover. If you hold less, or have no control, you may be in the general regime as an employee. The choice changes what you pay and what you are protected for.

Who counts as an autónomo societario

You work in the company and any one of these applies:

• You hold at least 33% of the company.
• You hold at least 25% and also perform management and administration functions.
• You hold at least 50% together with your spouse or relatives up to second degree.
• You have effective control of the company, even below those shares.

Administrators who are paid for management functions are also covered by RETA when they hold the relevant share or are directors with full management. Administrators below the thresholds fall under the general regime "assimilated to an employee". That cover excludes unemployment benefit and the wage guarantee fund (FOGASA).

Partners below the thresholds who work as ordinary employees are in the general regime. Use the checklist below to run through the tests.

Do you pay if the company pays you no salary?

Yes. If you meet the tests, you must register and pay contributions even when the company pays you nothing. There is a minimum base for the lowest bracket, so there is always a minimum monthly fee.

How the cost is set

Your fee depends on your forecast annual net income, not on a fixed amount.

• Counted as income: your salary, administrator pay, the net yield of any other self-employment, and your share of profits that matches the work you do. Dividends and profit distributions from the company are expected to count too.
• A deduction applies to that income. For societarios it is 7%.
• There are 15 income brackets. You choose a base within the range of your bracket. The monthly fee is that base multiplied by the total contribution rate.
• After the year ends, the Seguridad Social compares your choice with your tax data. If you paid too little, you pay the difference. If you paid too much, you get a refund.

The brackets rise gradually through 2032 and change every year, and societarios generally face a minimum base. Look up the current brackets and fee with the Seguridad Social before you choose.

Reduced first fee (tarifa plana)

The tarifa plana is a low flat fee for new autónomos. It runs for the first 12 months. It can be extended another 12 months if your net income is below the minimum wage.

You are excluded if you were registered as an autónomo in the previous 2 years (3 if you already used the benefit), or if you owe money to Social Security. Access for societarios is limited, particularly administrators with control. Ask the Seguridad Social whether you qualify before you count on it.

What protection you get

As an autónomo societario you are covered for:

• Sickness and accidents. Sick pay starts from the fourth day.
• Maternity and paternity.
• Retirement and disability.
• Widow and orphan benefits.
• Work accidents and professional illness, mandatory since 2019.
• Cese de actividad, a limited unemployment-type benefit with strict conditions.

You get no ordinary unemployment benefit. Your benefits depend on the base you chose, while an employee's follow salary. You can also take out optional extra cover.

What happens if you are in the wrong regime

The Seguridad Social can register you in RETA on its own initiative, backdated, usually after a labour inspection. It can claim contributions for up to four years, with a surcharge that starts at 20% plus interest. Fines for not registering typically run from hundreds to several thousand euros. Benefits can be denied or reduced for the unregistered period.

If you are unsure, or think you were registered under the wrong regime, ask the Seguridad Social to confirm your regime.

Choosing between options

Which Social Security regime applies to you as an owner working in your own company?

• RETA as autónomo societario: You work in the company and hold at least 33% (25% if you also manage it), or 50% with spouse or relatives, or have effective control. Cover follows the base you choose, with cese de actividad but no ordinary unemployment benefit.

• General regime as an employee: You work in the company but stay below those thresholds and have no control. Your benefits follow your salary.

• General regime as an administrator treated like an employee: You are a minority administrator paid for management. You are covered like an employee, but without unemployment and wage-guarantee fund (FOGASA) cover.

Start with your shareholding, then your management role and control: meeting any RETA test means RETA, and registering in the wrong regime can lead to backdated contributions and fines.

Timeline and deadlines

• Check you have not been registered as an autónomo recently and have no Social Security debt: before you register

• Start the tarifa plana, if you qualify: from the month you register, for the first 12 months

• Ask for a further 12 months of the flat fee if your net income is below the minimum wage: at the end of the first 12 months

Checklist

• Check whether you hold at least 33% of the company, or 25% if you also manage it, or 50% together with a spouse or relatives up to second degree.

• Register in RETA as an autónomo societario if you meet any of these tests, even if the company pays you no salary.

• Work out your forecast annual net income, counting salary, administrator pay and your share of profits.

• Choose a contribution base within your bracket and expect a correction after the year-end.

• Look up the current 15 income brackets and monthly fee with the Seguridad Social.

• Ask the Seguridad Social whether you qualify for the tarifa plana.

• Ask the Seguridad Social to confirm your regime if you are unsure or think you were registered under the wrong one, and fix it before an inspection finds it.

What to watch out for

• Being in the wrong regime or not registered: The Social Security (TGSS) can register you in RETA on its own initiative after an inspection, backdated. It can claim contributions for up to four years, with a late-payment surcharge starting at 20% plus interest, and fine you for not registering. Fines run from hundreds to several thousand euros. Benefits can also be denied or reduced for the unregistered period. Work out your regime now from your shareholding and role, and register or correct it with the Seguridad Social before an inspection does it for you.

Frequently asked questions

Do I have to pay RETA contributions if my company pays me no salary?

Yes, if you meet the RETA tests, you must register and pay contributions even when the company pays you no salary. Contributions are due whatever your income, and there is a minimum base for the lowest bracket.

Does money I take as dividends count when my contribution base is set?

Yes, for an autónomo societario, dividends and profit shares linked to your work count as income, together with salary and administrator pay. You choose a base within your bracket, and the Social Security (TGSS) adjusts it after the year using tax agency data.

Can I get the tarifa plana as an autónomo societario?

Generally no if you are an administrator with control, and only in limited cases otherwise. The flat fee is for people registering as autónomos for the first time, or not registered in the previous 2 years (3 if they used it before), and it lasts 12 months. It can be extended another 12 months if net income is below the minimum wage. Outstanding Social Security debt rules you out.

Does RETA give me unemployment benefit like an employee?

No, there is no ordinary unemployment benefit in RETA, but cese de actividad gives a limited unemployment-type benefit on strict conditions. Sickness pay starts from the fourth day, and your benefits follow the base you chose, not a salary.