Workers with the highest salaries and companies will face another increase in social security contributions in 2027 as a result of the schedule of increases approved by the Government within the framework of the pension reform. It will be the third consecutive year in which increases in the Intergenerational Equity Mechanism (MEI), the solidarity quota, and the maximum contribution base coincide, raising the labor cost of the highest wages.
All this, without the increasing contributory effort having an equivalent reflection in the future pension. While maximum contributions will continue to increase at a rate higher than inflation, the maximum pension will continue to be revalued with a different and more moderate schedule, widening the gap between what high salaries contribute and the maximum benefit that today’s workers will be able to receive when they retire tomorrow.
The first increase will come from the Intergenerational Equity Mechanism (MEI), the extraordinary contribution created to strengthen the Social Security Reserve Fund – the so-called pension piggy bank – with the aim of addressing the increase in expenditure derived from the retirement of the baby boom generation. After standing at 0.8% in 2025 and 0.9% in 2026, the rate will increase to 1% in 2027.
It should be remembered that this extra quota, which is funding the additional pension cost borne by public coffers, is applied to practically the entire contribution base, so the increase affects both workers and companies, although the greatest impact falls on employers. Specifically, next year the company will pay 0.83% and the worker, 0.17%. All this without affecting the future pension.
To this increase will be added a new increase in the solidarity quota, the specific levy created so that salaries exceeding the maximum contribution base (set at 5,101.2 euros per month in 2026) contribute to financing the system with a greater proportion of their salary. Until just two years ago, the part of the salary that exceeded the maximum base did not contribute. With the pension reform, a specific contribution began to be applied that will progressively increase until 2045.
Thus, in 2027 the three established brackets will increase again: up to 1.38% on the part of the salary between the maximum base and an additional 10%; up to 1.5% on the bracket between 10% and 50% above the maximum base; and up to 1.75% on the part of the salary that exceeds that base by more than 50%. Again, the bulk of the quota will be borne by the company and a smaller part by the worker, and the higher contribution will not generate new pension rights.
Gap with the pension
The third element of the reform will affect those who contribute based on the maximum base. From 2024, in addition to being updated annually with inflation, the maximum base incorporates an additional annual increase of 1.2% until 2050. This means that in 2027 it will increase again above the price evolution, expanding the amount of salary on which Social Security contributions must be paid.
In practice, this uncapping of the maximum base causes a growing part of the highest salaries to be subject to contribution, increasing both employer and worker contributions. But the maximum retirement pension will not grow at the same rate, since from 2025 until 2050, the maximum amount of contributory pensions is revalued each year with the CPI and a cumulative additional increase of 0.115% annually.
The difference between both growth rates – an additional 1.2% for the maximum bases versus 0.115% for the maximum pension – implies that the gap between what is contributed and the maximum benefit (which currently reaches 3,359.6 euros per month) will continue to widen over the coming decades. In other words, workers with higher salaries will pay contributions on an increasing portion of their salary, but the pension limit will increase much more slowly.
Structural change
All these increases in the contributions that workers make monthly to Social Security respond to one of the main objectives of the reform promoted by former minister José Luis Escrivá, which was precisely to increase revenues to finance the sharp increase in pension expenditure that the system will face to cover the retirement of the baby boomers.
The strategy combines three revenue-raising paths: gradually raising the MEI, implementing the solidarity quota for salaries that were previously exempt from contribution, and steadily increasing the maximum base. And the result is a structural change in the functioning of the system. Traditionally, there was a relatively close relationship between the maximum contribution base and the maximum pension that could be obtained. With the reform, that link is progressively weakened, bringing part of the contributions from high salaries closer to a more redistributive than contributory logic.
The Independent Authority for Fiscal Responsibility (AIReF) estimates that these three measures alone will provide half of the expected revenue increase by 2050, with an average impact of 0.4 points from the MEI; 0.3 points from the maximum bases; and 0.1 points from the solidarity quota. In total, the agency estimates an impact of revenue measures of 1.6% of GDP, compared to pension spending of 14.6%, so the reform theoretically meets the rule that limits net spending to 13.3%, although AIReF has repeatedly warned that risks to the system’s sustainability persist.
