The MEI is the Intergenerational Equity Mechanism and consists of an increase in the Social Security contribution, both by the company and the employee.
It is a contribution that was included in 2023 among the urgent measures for the extension of pensioners’ rights. Considering the demographic trend and, with it, the foreseeable wave of retirements in Spain, this measure is intended to increase the contribution to pensions, distributing its weight among all generations.
We heard about this measure for the first time in Law 21/2021, of December 28, and it was not until Royal Decree-Law 2/2023, of March 16, where it was indicated more broadly how this contribution would be developed.
This is a long-term measure that will apply until 2050, according to the information published in this Royal Decree-Law.
It started in 2023 where the MEI was equivalent to 0.60% (0.50% to be paid by the company and 0.10% to be paid by the employee), with a higher trend each year. In order to know how this contribution increases, 0.10% will be added each year, with the percentages of the MEI being distributed proportionally between the employer and the employee.
Thus, if in 2024 we had 0.70% (0.58% to be paid by the company and 0.12% to be paid by the employee), in 2025 the total amount will be 0.80%, with a difference of 0.67% to be paid by the company and 0.13% to be paid by the employee.
This would be the projection up to 2030:
- In 2023: 0.60% (0.50% will correspond to the company and 0.10% to the employee)
- In 2024: 0.70% (0.58% will correspond to the company and 0.12% to the employee)
- In 2025: 0.80% (0.67% will correspond to the company and 0.13% to the employee)
- In 2026: 0.90% (0.75% to be paid by the company and 0.15% to be paid by the employee)
- In 2027: 1% (0.83% will correspond to the company and 0.17% to the employee)
- In 2028: 1.1% (0.92% will correspond to the company and 0.18% to the employee)
- In 2029: 1.2% (1% will correspond to the company and 0.20% to the employee).
On that date, 1.2% will be maintained for employers and employees until 2050, with both having the same contribution under this concept.
Therefore, in compliance with the regulations, as of 2025 the percentages established for the MEI will have to be updated, increasing Social Security contributions.