calculation process and impact on payrollv
Understanding what common contingencies are is vital for both employees and companies. For this reason, we teach you what situations fall into this category according to Social Security, how the regulatory base is calculated, workers’ rights and more. Let’s get started!
What are common payroll contingencies?
Common contingencies represent a type of contribution made to Social Security in Spain. They are situations that can harm the health of the worker and that are not a direct consequence of an accident at work or an occupational disease.
By paying contributions for common contingencies, workers guarantee their protection and the right to receive financial benefits in the event of facing a common contingency that prevents them from continuing their work activity. Therefore, according to the General Law on Social Security , one of the deductions from the payroll of workers for their monthly contribution must be allocated to this type of contingency.
Types of common contingencies
What situations are classified as this type of contingency? Here we can highlight some of the most common ones:
- Temporary disability due to non-occupational illness;
- Retirement pension;
- Maternity or paternity leave;
- Occupational risk during pregnancy;
- Temporary disability due to an accident outside the workplace;
- Death and survival benefits, provided that the cause of death is not related to an occupational accident or occupational disease.
Essentially, these are all situations not related to work that can lead you to temporarily or permanently stop working. However, there are also other types of contingencies to consider.
Other forms of contingency
Now that you know what common payroll contingencies are, it is time to learn about other eventualities that can also cause a work stoppage and that are taken into account by Social Security:
- Occupational contingencies : as the name suggests, these are contingencies that occur in the work environment itself and prevent you from continuing to work. Both accidents and occupational diseases are considered here.
- Unemployment contributions : Social Security contributions also include a percentage to help workers when they lose their jobs through benefits and financial aid.
- Vocational training contribution : This is a modality that allows employees to take training or professional development courses to improve their working conditions.
Difference between common contingencies and other contingencies
In addition to the situations of incapacity that lead to work stoppage, the types of contingencies are differentiated by the percentages that are deducted from the payroll for Social Security contributions.
Common contingency is the modality where the highest percentage of the contribution is delivered, adding the contribution made by the worker (4.70%) and the company (23.60%) . The contribution for professional contingencies and other modalities is lower.
How common contingencies are calculated in payroll
Economic benefits for common contingencies can be received from the fourth day of sick leave. In this sense, from the 4th day to the 15th, payment of the benefit will be the responsibility of the company where the person worked, while, from the 16th day, said payment is the responsibility of Social Security.
But how much money must the worker contribute to receive these benefits? Below, we will see how common contingencies are calculated in the payroll:
1. The first step is to calculate the employee’s gross salary, which includes the sum of their base salary, plus any supplements such as prorated overtime, seniority pay, bonuses, etc.
Gross salary = Base salary + Supplements
2. Then the concepts excluded from the contribution base are considered, that is, some salary concepts that must be subtracted from the gross salary to obtain the contribution base for common contingencies.
Contribution base = Gross salary – Exclusions
3. Finally, the contribution base is multiplied by the percentages established by the saudi arabia email list General Social Security Law . This allows us to calculate the contribution corresponding to the employee and the company.
Quote = Contribution Base x Percentage
How to Add Google Analytics to WordPress (with and without a plugin)
Are you looking for a convenient way to set up Google Analytics in 15 best content marketing tools and plugins for wordpress WordPress? One of the most powerful weapons you have as a WordPress site owner is analytics. You can use your data and patterns to make more informed decisions and help you better understand your audience. As such, Google Analytics presents one of…
8 Best WordPress Migration Plugins (Comparison)
Are you looking for a quick and easy way to migrate your WordPress website? You may want to move your site to another WordPress web host or domain name. If your current hosting provider is not offering satisfactory performance, security, and support, upgrading to a better host can significantly improve the experience for both you…
How to Display a Facebook Feed in WordPress (5 Easy Steps)
customers about a discounted price on your WooCommerce store? Price drop campaigns display pop-up notifications when your brand reduces the price of a product. Sending alerts to your visitors allows you to
How to notify your customers of a price drop in WooCommerce
Are you looking for a way to notify your customers about a discounted price on your WooCommerce store? Price drop campaigns display pop-up notifications when your brand reduces the price of a product. Sending alerts to your visitors allows you to improve engagement and maximize sales on your website. In this tutorial, we’re going to…
7 Best Divi Builder Alternatives for Your Website (Compared)
Looking for Divi alternatives to help you build your website? Divi is one of the most popular WordPress builders, but some users may find that Divi’s interface has a bit of a learning curve, making it harder for beginners to get up to speed. There are other builders that are easier to use and designed…
MemberPress vs WishList Member: Which is Better?
Are you looking for an affiliate plugin for your website? Want to know which one is above WishList or MemberPress? These two WordPress affiliate plugins allow you to create affiliate and subscription plans on your website to make money online. The best thing is that they give you full control over your earnings. We have…
How to Embed Instagram Feed in WordPress (5 Easy Steps)
Looking for an easy way to add an Instagram feed to your WordPress site? An Instagram feed helps you display your social media content directly on your WordPress website. Visitors can view and engage with your Instagram content without ever leaving your website. In this step-by-step tutorial, we’ll show you how to connect your site…
How to Make a WordPress Quiz to Increase Engagement
Are you looking for an easy way to add a quiz to your WordPress site? Contests are a great way to improve engagement, conversions, and social media impact. But more than that, they’re just plain fun to have on your site. Now, quizzes can be easy to create if you use the right tool. In…
How to create a location-based popup
Do you want to create popups based on your visitor’s location? One of the best ways to capture your visitors’ attention is with pop-ups. However, if you use the wrong approach, pop-ups can be annoying, intrusive and overbearing, which quickly causes them to lose value and your audience’s attention. The best way to improve the…
15 Best Content Marketing Tools and Plugins for WordPress
improve engagement and maximize sales on your website. In this tutorial, we’re going to…
7 Best Divi Builder Alternatives for Your Website (Compared)
Looking for Divi alternatives to help you build your website? Divi is one of the most popular WordPress builders, but some users may find that Divi’s interface has a bit of a learning curve, making it harder for beginners to get up to speed. There are other builders that are easier to use and designed…
MemberPress vs WishList Member: Which is Better?
Are you looking for an affiliate plugin for your website? Want to know which one is above WishList or MemberPress? These two WordPress affiliate plugins allow you to create affiliate and subscription plans on your website to make money online. The best thing is that they give you full control over your earnings. We have…
How to Embed Instagram Feed in WordPress (5 Easy Steps)
Looking for an easy way to add an Instagram feed to your WordPress site? An Instagram feed helps you display your social media content directly on your WordPress website. Visitors can view and engage with your Instagram content without ever leaving your website. In this step-by-step tutorial, we’ll show you how to connect your site…
How to Make a WordPress Quiz to Increase Engagement
Are you looking for an easy way to add a quiz to your WordPress site? Contests are a great way to improve engagement, conversions, and social media impact. But more than that, they’re just plain fun to have on your site. Now, quizzes can be easy to create if you use the right tool. In…
How to create a location-based popup
Do you want to create popups based on your visitor’s location? One of the best ways to capture your visitors’ attention is with pop-ups. However, if you use the wrong approach, pop-ups can be annoying, intrusive and overbearing, which quickly causes them to lose value and your audience’s attention. The best way to improve the…
15 Best Content Marketing Tools and Plugins for WordPress
best to use a practical example. Let’s imagine that you receive a base salary of €1,500, plus a transport allowance of €200 and an annual payment of €10,000. You also have a Social Security benefit of €150.
With this data, we can calculate the gross salary:
Gross salary = €1,500 + €200 + (€10,000/12) = €2,533.33
We move on to the calculation of the regulatory base:
Regulatory base = €2,533.33 – €150 = €2,383.33
Finally, applying the percentage corresponding to the worker and the company to the base:
Contribution (employee) = €2383.33 x 4.70% = €112.02
Quote (company) = €2383.33 x 23.60% = €562.47
This means that the employee’s contribution for common contingencies will be €674.49 (€112.02 + €562.47).
Impact of common contingencies on salary
These contributions, although they represent a means of protecting employees from many unforeseen events, have a considerable impact on an employee’s payroll.
This is because the amount of money you will receive at the end of the month will be reduced. If we look at the example above, although your gross salary was €2,533.33, after deducting the corresponding contribution, you will only receive €2,421.31.
Let’s also consider that we only take into account one of the types of Social Security contingencies. That is why it is important to check the breakdown of your payroll each month to know which contributions you are making and which are deducted from your payroll.
Differences between salaried workers and self-employed workers
To receive economic benefits for common contingencies, self-employed workers must register with the Special Regime for Self-Employed Workers (RETA).
In this way, they can choose a contribution base for common contingencies that they can pay according to their monthly income. Unlike salaried employees, the contribution of self-employed workers is complete, that is, it is not divided between the employee and the company.
It is important to understand that self-employed workers are responsible for managing all payments when paying into Social Security, and the larger the amount, the better the benefits will be in the event of an emergency.
Rights and benefits associated with common contingencies
The payment of the contribution for common contingencies gives the person the right to receive:
- Economic benefits for work incapacity;
- Retirement pension;
- Orphan’s and widow’s pensions;
- Maternity and paternity leave;
- Sick leave due to risk during pregnancy and breastfeeding;
- Healthcare, medical and pharmaceutical assistance.
To access these benefits, the worker must be registered with Social Security and have made contributions for the minimum period. It should be noted that this period varies depending on the benefit required.
When you apply for sick leave, you must apply for benefits and provide any documents or evidence that prove that you have a temporary or permanent incapacity to continue working.