Your salary under the microscope: the new MEI contribution is coming soon (and it won't increase your pension)
Date of introduction and legal basis
Mecanism for Intergenerational Justice (MEI) is a new contribution that came to Spain with the 2023 pension reform.
It was approved by Royal Decree 2/2023 of March 16, as part of a package of changes aimed at ensuring the sustainability of the public pension system and redressing inequalities between generations and genders.
Under the transitional rules, the MEI is effective January 1, 2023, and is to be maintained until 2050.
What exactly is MEI?
MEI is an additional social security contribution to strengthen the pension system's reserve fund.
It is a targeted contribution - this means that the money from it does not go to your individual retirement account and does not increase your future pension.
Instead, they contribute to the so-called “Pension Treasury” - a reserve fund of the state system to help cover future deficits when the number of retirees increases significantly.
In other words: you pay more, but not for yourself - for the system.
When and how is MEI growing? (Year-by-year comparisons)
The amount of the MEI premium increases gradually each year. Here is the schedule:
| Year | Total MEI rate | Part paid by company | Part paid by employee |
|---|---|---|---|
| 2023 | 0,60 % | 0,50 % | 0,10 % |
| 2024 | 0,70 % | 0,58 % | 0,12 % |
| 2025 | 0,80 % | 0,67 % | 0,13 % |
| 2026 | 0,90 % | 0,75 % | 0,15 % |
| 2027 | 1,00 % | 0,83 % | 0,17 % |
| 2028 | 1,10 % | 0,92 % | 0,18 % |
| 2029-2050 | 1,20 % | 1,00 % | 0,20 % |
For example: if your contribution base is €3,000, an MEI of 0.15% (that is, in 2026) means a deduction of about €4.50 per month from your net salary. The amounts seem small, but they are mandatory and do not bring any additional benefits.
What is it all for?
The government justifies the introduction of MEI with three main reasons:
- Aging population - more and more retirees, fewer and fewer working people.
- The replacement of the so-called “balancing factor” - an earlier mechanism that tied the amount of the pension to life expectancy.
- Intergenerational justice - each generation is expected to contribute its share to ensure that the system does not collapse in the future.
In practice, MEI is a kind of emergency insurance for the state, financed by citizens and employers.
How does MEI affect employees?
- Your net salary will be slightly lower, because the MEI contribution is deducted from the same base as social security contributions.
- It does not bring you any additional pension rights - it does not increase the amount of your future pension.
- The higher the earnings, the higher the euro deduction, although the percentages are only fractions of a percent.
- For most workers, we're talking about a few euros a month less in their pockets.
- Many Spaniards criticize the MEI as a “hidden tax” - you pay but get no personal benefit from it.
How does MEI affect employers?
- Companies pay a higher share of the premium than employees (e.g., 0.75% of 0.90% in 2026).
- This means higher employment costs, which can discourage new job creation.
- For companies with small margins, this can be an additional financial burden.
- As a result, some companies may reduce raises, bonuses or the hiring of new employees.
And where is the catch here?
Although the MEI presents itself as a solution for the “common good,” critics see it as another way to bail out the system at the expense of working people.
- The premium increases every year - up to 1.2% in 2029.
- The money does not go to your future pension.
- Employers and employees are paying more and more, and the system may not be stable enough anyway.
- And most importantly, the government can change the rules at any time if the economic situation worsens.
Starting in 2026, every Spaniard will notice a small difference in their paycheck. For most, it will be a few euros less, for companies - hundreds of thousands more per year.
Officially - to protect future pensions.
Unofficially - to save a system that is becoming increasingly difficult to keep alive.
One thing is certain: your salary will shrink a bit, and your future pension will not grow at all from this.
