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Date Published: 27/10/2026

Spain's minimum wage rise will be exempt from income tax

The Spanish government says workers on the minimum wage will keep the whole increase

Workers on Spain’s minimum wage will keep the whole of next year’s pay rise, as the government plans to make the increase exempt from income tax.

Social Security Minister and government spokesperson Elma Saiz confirmed the news on Monday October 26, just over a month before the general election on November 29. She explained that a new tax deduction will be approved alongside the increase “so that this income is not subject to personal income tax”.

That means full-time workers on the minimum wage won’t pay any income tax when they file their return and will take home the full amount, apart from their social security contributions.

The government is almost certain to approve the rise before the election, and Ms Saiz repeated that it will be around 5% and likely no less than 4%. No figure is official yet, but those numbers give a good idea of what to expect.

The minimum wage currently stands at €1,221 a month before deductions, paid in 14 instalments, which comes to €17,094 a year. A 4% rise would take it to roughly €1,270 a month, or about €17,778 a year, while 5% would mean around €1,282 a month, or about €17,949 a year.

The government has also said it wants the increase to be at least in line with inflation, which is currently 4.9%, while the CCOO union is calling for more than 5%.

The minimum wage itself is set by royal decree and doesn’t need the approval of Parliament, but a tax measure does, so a new law will have to be drafted and passed by the Standing Committee of Congress.

Until 2024, every rise in the minimum wage came with a matching increase in the income tax thresholds, so those on the lowest pay didn’t end up paying tax. Over the last two years the government hasn’t changed the thresholds and has used a deduction in the tax return instead, which cancels out the tax owed.

Workers still have to file a return to get back the money withheld from their pay during the previous year, and they receive it a year later. That looks to be the system the government will use again, and it plans to approve it even with Parliament dissolved.

Image: Magnific

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