As of January 1, 2026, millions of workers in Spain you will see how your payroll It drops a little compared to December 2025. The reason, an increase in one of the withholdings that are applied to the payrolls of all workers aimed at guaranteeing the viability of the benefits of future pensioners.
This adjustment, provided for in the Royal Decree-Law 2/2023 It can reach up to 95 euros per year for those with high salaries, although for the majority of workers it will barely exceed 43 euros per year.
What is the MEI? Just like explain from BBVA, the MEI, or Intergenerational Equity Mechanism, is a withholding that is applied to working people on their payrolls and that serves to reinforce the Social Security Reserve Fund (popularly known as the “pension piggy bank”). As with other withholdings and contributions, part of the MEI falls on the company and another part on the worker.
The objective of this retention is to compensate for the effects of demographic aging of the workforce and ensure that today’s younger generations, with a smaller population than Baby Boomers and Generation the full weight of pensions of the next 25 years.
How is it calculated? This withholding is calculated as a percentage of the total salary base for which each person contributes and it is expected that this percentage will increase annually until 2029 and then stabilize. In 2026, this percentage will go from 0.80% of the salary base to 0.9%. Of this amount, the worker will assume 0.15% in 2026, and the company will pay 0.75% (to complete the total 0.90% planned for this year).
|
Year |
Company |
Worker |
Total |
|---|---|---|---|
|
2023 |
0.50% |
0.10% |
0.60% |
|
2024 |
0.58% |
0.12% |
0.70% |
|
2025 |
0.67% |
0.13% |
0.80% |
|
2026 |
0.75% |
0.15% |
0.90% |
|
2027 |
0.83% |
0.17% |
1.00% |
|
2028 |
0.92% |
0.18% |
1.10% |
|
2029 to 2050 |
1.00% |
0.20% |
1.20% |
And how much money does that mean? As the final amount depends on the contribution base of each worker, the MEI does not retain a fixed amount for everyone. By 2026, the maximum contribution base will be 63,180 euros per year. Therefore, for those who have a gross salary of 5,265 euros per month (in 12 payments), about 94.77 euros per year will be deducted from that maximum base. That is, about 7.89 euros per month.
According to consolidated data from the ‘Salary Structure Survey’ of 2023, the most common gross salary in Spain is around 15,574 euros per year. This means that for workers with a gross monthly salary of 1,297 euros (in 12 payments), the 0.15% that is withheld from each employee as MEI would mean 1.94 euros on each payroll, adding up to a total of 23.34 euros per year.
How much will it increase each year? The change in the MEI withholding will be applied automatically and has been increasing since its implementation in 2023, the year in which a withholding of 0.10% for workers and 0.50% for companies began to be applied, with a total of 0.60% on the contribution base.
The objective is to reach 1.20% in 2029, divided into 1% retention for the company and 0.20% for workers. Once this objective is reached, withholdings will be frozen at that percentage until 2050.
Pay more without receiving more. Unlike other withholdings that are applied to payrolls, the MEI percentage does not generate additional rights on the amount of the retirement pension, as would happen if the contribution base is increasedFor example. That is to say, this withholding does not have a direct effect on the pension, but rather is intended to make the pension system more solvent and viable for a longer time even if there is more retirees than active contributors.
According to data of the Ministry of Inclusion and Social Security, in 2023 the Intergenerational Equity Mechanism contributed 3,437 million euros to the Social Security Reserve Fund, while in 2024 it was 3,799 million.
The record increase in the number of Social Security contributors registered in 2025 means that the forecasts for contributions to the pension fund for this concept will increase to 4,623 million euros, leaving a total balance in this fund close to 14,000 million euros.
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