Question
“I believe there is a social security agreement between Spain and Canada, but what does it really entail for Canadians working in Spain? I know many people in the group are retirees, and this might not be a huge concern to you. I am looking to apply for the Spain Digital Nomad Visa to work and live in Spain.
One of the requirements is to become a tax resident in Spain, which means paying into Spanish social security and income taxes, which might be higher than Canada.
The question is, if I leave Spain in a few years and move back to Canada, do all these social security and income taxes I pay in Spain help my CPP at all? Is that what the social security agreement is? Just don’t want to pay a bunch of money for nothing.”
Answers
These are the answers of Spainguru’s Spain Digital Nomad Visa group members:
“Here you go. Basically, time spent in either country counts for eligibility (not the amount of years you receive) in the other country’s system. For example, I will get OAS even though I only had 19 years—because my time in Spain counts for eligibility—but I will only get the amount equivalent to years in Canada.”
“In Spain, for example, I worked for two years. You need a minimum of 15 years for a Spanish pension. Thanks to the convention, my Canadian years count for eligibility, so I will get a small Spanish pension, but the amount is based only on my actual two years of work.”
“A Spain Digital Nomad Visa allows you to work for a foreign company remotely in Spain. If you have a salary, that company pays into your CPP, and in Spain, you just pay the percentage difference in taxes after paying Canadian taxes. The tax difference allows you access to the Spanish medical system but doesn’t otherwise count towards your CPP.
If you’re paid as a contractor with no deductions at source, you may pay everything in Spain as an autónomo. However, for a pension in Spain, you need at least 15 years of contributions in an EU country, with at least eight of those years in Spain.”
“It only helps with eligibility, not the actual amount. You should still try to apply for a pension where you’ve worked the longest. In my case, I worked 10 years in the U.S., so I’ll likely qualify for a small pension there too.”
“Considering the value of CPP, spending a few years in Spain may not be such a big loss! Think of the Spanish lifestyle instead.”
“In Europe (and in Canada), most social systems require at least 10 to 15 years of contributions for pension eligibility. In Canada, CPP requires contributions for years worked, but the payment amount depends on the total years and contributions.”
“Spain requires a minimum of 15 years for a pension. If you don’t reach that, your contributions don’t transfer back to Canada. With CPP, you’re eligible based on years and contributions in Canada, regardless of whether you worked one year or many.”
“I recommend speaking to a professional. From what I know, people who have worked in both Spain and Canada receive separate pensions for each, not combined. But a professional can clarify specific details for your case.”
“Be prepared to pay tax differences in Spain if you’re a resident. But otherwise, it’s similar to living in Canada in terms of CPP contributions if you’re paid directly by a Canadian employer.”
Conclusion
The Spain-Canada social security agreement primarily supports eligibility for pensions in both countries, allowing work years in one country to count toward minimum requirements in the other. However, the pension amounts are calculated based only on the actual contributions made in each country.
For the Digital Nomad Visa, most Canadians find they will pay into Spain’s system without impacting their Canadian CPP significantly unless they’ve worked in Spain for at least 15 years.
Professional advice is recommended for navigating the complexities of dual contributions, ensuring applicants understand both tax obligations and pension expectations.
Join our community!
Make sure to join our dedicated Spain Digital Nomad Visa group here!
