From January 2027, Spain’s Social Security will increase the Intergenerational Equity Mechanism (MEI) to 1%, raising payroll deductions for both employees and companies. The change means workers on the highest bases could see up to €104 withheld annually, with further increases planned through 2029.
Starting 1 January 2027, Spain’s Social Security system will increase the Intergenerational Equity Mechanism (MEI) contribution to 1% of the common contingency base, a move that will directly affect payroll deductions for millions of workers and employers. Under the new rates, employees will pay 0.17% and companies will cover 0.83%, according to the official schedule published in the BOE.
For those earning at the maximum contribution base—set at €5,101.20 per month for 2026—this adjustment means a monthly deduction of €8.67 for the worker, totaling just over €104 per year. The employer’s share will rise to €42.34 per month, bringing the combined MEI contribution to €51.01 monthly. These figures are estimates based on the current maximum base and may change if the ceiling is updated for 2027.
How the MEI Increase Works
In 2026, the MEI stands at 0.90%, split between a 0.75% employer contribution and 0.15% from the employee. The 2027 increase continues the phased rise set out in Spain’s pension reform, with the total rate climbing by a tenth of a percentage point. While the employee’s share grows by two hundredths, the bulk of the increase falls on companies. The MEI applies to all situations where retirement contributions are required, including for self-employed workers, who must pay the full 1% themselves.
Impact on Different Salary Levels
The MEI deduction is calculated on the monthly contribution base, not the gross salary. For example, with a base of €1,200, the worker will pay €2.04 per month, while the company pays €9.96. At the maximum base, the employee’s monthly deduction reaches €8.67. Over a year, this means €104.06 for the worker and €508 for the employer, assuming the base remains unchanged throughout the year. It’s important to note that the MEI is a targeted contribution: it funds the Reserve Fund and does not count toward future pension calculations.
Annual Increase, Not a Sudden Jump
The €104 figure represents the total annual MEI contribution for a worker at the maximum base in 2027—not the increase over 2026. In 2026, the same worker pays about €91.82 annually, so the year-on-year rise is roughly €12.24. For those with lower bases, the increase is proportionally smaller. For instance, a base of €3,000 results in a €5.10 monthly deduction, or €61.20 per year, with an annual increase of €7.20 compared to 2026.
Further Rises Ahead
The MEI is set to continue rising: in 2028, the total rate will reach 1.10% (0.92% employer, 0.18% employee), and in 2029 it will peak at 1.20% (1% employer, 0.20% employee). This level will remain in place until 2050, as established by Spain’s pension reform law. The process is automatic—companies will adjust payroll deductions, and self-employed workers will see the new rate reflected in their contributions. No special application is required.
As the MEI climbs, its impact will be most noticeable for high earners and large employers, but the phased approach aims to spread the cost over several years. According to Talent24h, the measure is designed to reinforce the sustainability of Spain’s pension system by gradually increasing the Reserve Fund without sharply raising costs for any single group.
