Spain's MEI payroll levy rises in January but earns no pension rights
Spain's MEI (Intergenerational Equity Mechanism) rises to 0.13% in 2025 and does not generate pension rights. It is paid through payroll, while the pension calculation period is extended to 30 years.
English · Original discussion in Spanish · Published
The MEI is already cutting your payslip: the contribution that rises every January
Have you noticed a new line on your January payslip? The Intergenerational Equity Mechanism (MEI) has been in force since 1 January 2023 and was updated again in 2025, up to 0.13%. It is not a tax with a fancy name: it is a contribution paid alongside social security contributions, which rises automatically every first of the year and which, according to circulating estimates, does not generate future pension rights. The result: a few euros less in net pay in January compared to December 2024.
The increase is planned and does not depend on who governs. The MEI is updated every 1 January, even with a caretaker government, and the scheduled path takes it to 1.20% in 2030. Some argue that this trajectory will fall short because the money will not be enough to sustain pensions. Others point out that VAT started at 4% and nobody remembers that anymore. The comparison is not innocent: the levy was born small and grows by design.
What is the MEI and why does it not count towards your pension?
The MEI is a pension contribution without the associated rights. It is paid through social contributions, but it is not taken into account when calculating your future pension. In other words, you contribute more and accumulate nothing extra. The concept now appears visibly on the payslip, even though it was previously passed on through other items. For the average worker, the difference is a few euros a month; for the system as a whole, it is a growing source of revenue reviewed every year.
The novelty of 2025 is not the birth of the mechanism, but its umpteenth update. It had already been raised in 2023 and 2024. Updating, in this context, means raising. Workers take home less in January than in December, and the mechanism is consolidating as a fixed piece of the contribution system.
The pension calculation period: from 15 to 25 and now 30 years
The other open front is the calculation of the regulatory base. For years, the last 15 years of contributions were used; then it moved to 25. Now the calculation period is extended to the last 30 years. The effect is well known: if the final years of a working life are the ones with the highest salaries, extending the window backwards dilutes those salaries into a lower average. The future pension falls.
There are nuances. Not all workers reach retirement with rising salaries. In sectors with layoffs from a certain age onwards, the worker chains long-term unemployment and contributions on the minimum base. In those cases, extending the calculation period does not necessarily make the outcome worse. But the argument that the extension reflects the reality of salaries does not stand on its own: if most working careers were flat, there would be no reason to touch the window.
Who pays today's pensions and who will collect tomorrow's?
The system is sustained by current contributions and debt. The underlying debate is generational: those contributing today see their contribution rise and the calculation period extended, while political propaganda focuses on the uprating of current pensions. For now, the bill for intergenerational equity is being paid by those at the bottom.
Confidence in receiving a decent pension has broken down among part of the population. It is not a new phenomenon, but the MEI and the extension of the calculation period reinforce it. Those under 60 who have not built up their own safety net look at the system with distrust. The state, meanwhile, collects more and promises less.
The MEI rises every January, the calculation period gets longer, and the January payslip arrives with a new line item. Enjoy the mechanism.
Have you noticed a new line on your January payslip? The Intergenerational Equity Mechanism (MEI) has been in force since 1 January 2023 and was updated again in 2025, up to 0.13%. It is not a tax with a fancy name: it is a contribution paid alongside social security contributions, which rises automatically every first of the year and which, according to circulating estimates, does not generate future pension rights. The result: a few euros less in net pay in January compared to December 2024.
The increase is planned and does not depend on who governs. The MEI is updated every 1 January, even with a caretaker government, and the scheduled path takes it to 1.20% in 2030. Some argue that this trajectory will fall short because the money will not be enough to sustain pensions. Others point out that VAT started at 4% and nobody remembers that anymore. The comparison is not innocent: the levy was born small and grows by design.
What is the MEI and why does it not count towards your pension?
The MEI is a pension contribution without the associated rights. It is paid through social contributions, but it is not taken into account when calculating your future pension. In other words, you contribute more and accumulate nothing extra. The concept now appears visibly on the payslip, even though it was previously passed on through other items. For the average worker, the difference is a few euros a month; for the system as a whole, it is a growing source of revenue reviewed every year.
The novelty of 2025 is not the birth of the mechanism, but its umpteenth update. It had already been raised in 2023 and 2024. Updating, in this context, means raising. Workers take home less in January than in December, and the mechanism is consolidating as a fixed piece of the contribution system.
The pension calculation period: from 15 to 25 and now 30 years
The other open front is the calculation of the regulatory base. For years, the last 15 years of contributions were used; then it moved to 25. Now the calculation period is extended to the last 30 years. The effect is well known: if the final years of a working life are the ones with the highest salaries, extending the window backwards dilutes those salaries into a lower average. The future pension falls.
There are nuances. Not all workers reach retirement with rising salaries. In sectors with layoffs from a certain age onwards, the worker chains long-term unemployment and contributions on the minimum base. In those cases, extending the calculation period does not necessarily make the outcome worse. But the argument that the extension reflects the reality of salaries does not stand on its own: if most working careers were flat, there would be no reason to touch the window.
Who pays today's pensions and who will collect tomorrow's?
The system is sustained by current contributions and debt. The underlying debate is generational: those contributing today see their contribution rise and the calculation period extended, while political propaganda focuses on the uprating of current pensions. For now, the bill for intergenerational equity is being paid by those at the bottom.
Confidence in receiving a decent pension has broken down among part of the population. It is not a new phenomenon, but the MEI and the extension of the calculation period reinforce it. Those under 60 who have not built up their own safety net look at the system with distrust. The state, meanwhile, collects more and promises less.
The MEI rises every January, the calculation period gets longer, and the January payslip arrives with a new line item. Enjoy the mechanism.
Summary of a discussion on Burbuja.info - Foro de economía, actualidad y política., translated from Spanish and reviewed before publication. Read the full discussion (40 replies).
More summaries
-
Lamine Yamal: "I hope so, that there are many Africans"
Lamine Yamal claims his African roots less than a month before the 2026 Ballon d'Or, in a debate mixing play, nationality, and candidacies.
-
Spain's Low Wages: Why Your Paycheck Isn't Rising
A forum user argues that household savings are below 8% of GDP and that unemployed people over 45 now make up 57% of the total.
-
Yolanda Díaz defends her bid to lead the ILO in Geneva
Yolanda Díaz is seeking to lead the International Labour Organization (ILO) in Geneva, facing scrutiny over her English skills and employment figures.
-
The new Citroën 2CV: €15,000 for an icon nobody asked for
Citroën is reviving the 2CV for €15,000 in 2028. The price and the nostalgia divide opinion: is it a viable electric city car or a design indulgence?
-
PSOE spokesperson's hot mic: laughter after the outrage
The Spanish Socialist Party's spokesperson ends a press conference denouncing Ayuso's lack of empathy, but a hot mic catches her laughing with journalists.
-
Atlantic overturning circulation collapse may be near, warn forum users
Debate on the possible collapse of the Atlantic Meridional Overturning Circulation (AMOC): imminent or a long-term risk? A critical look at climate predictions.