Intergenerational Payroll Equity Mechanism (IEM)

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In 2023, the so-called Intergenerational Equity Mechanism (MEI) came into force , a new contribution applicable to both the company and its employees that was already provided for in Law 21/2021, guaranteeing the purchasing power of pensions and other measures to strengthen the financial and social sustainability of the public pension system.

This new regulation affects both companies and workers also during saudi arabia mobile phone number the next year 2024 and beyond. What does it consist of? What does it mean? We will tell you everything.



The MEI is a mechanism that establishes a contribution increase of X percentage points (depending on the year) applied on the basis of common contingencies in all situations of registration or similar to registration in the Social Security system in which there is an obligation to contribute to cover the retirement pension.

In 2023, the percentage allocated to Social Security was 0.6%.
In 2024, the percentage allocated to Social Security will be 0.7%.
We could say that this is a new payroll "tax" that began to be applied in 2023 and that will continue to be applied progressively year after year. We are talking about a "new" contribution that both companies and their employees must make to Social Security to cover the payment of pensions.



Labor consultancy for companies

Progressive increase in the MEI rate
Royal Decree-Law 2/2023, of March 16, gradually readjusts the initial MEI configuration of 0.6% in 2023 until it reaches practically 1.2% in 2029.

Specifically, the final MEI quotation takes effect from January 1, 2023 to December 31, 2050 according to the following scale:

In 2023, it will be 0.60 percentage points, of which 0.50 will correspond to the company and 0.10 to the worker.
In 2024, it will be 0.70 percentage points, of which 0.58 will correspond to the company and 0.12 to the worker.
In 2025, it will be 0.80 percentage points, of which 0.67 will correspond to the company and 0.13 to the worker.
In 2026, it will be 0.90 percentage points, of which 0.75 will correspond to the company and 0.15 to the worker.
In 2027, it will be 1 percentage point, of which 0.83 will correspond to the company and 0.17 to the worker.
In 2028, it will be 1.10 percentage points, of which 0.92 will correspond to the company and 0.18 to the worker.
In 2029, it will be 1.2 percentage points, of which 1.00 will correspond to the company and 0.2 to the worker.
From 2030 to 2050, the same percentage of 1.2 will be maintained, with equal distribution between employer and employee.

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