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More money for millions of workers in Spain, but the devil is in the detail
What the minimum wage rise in Spain actually means for your pay packet and 2026 tax bill
Spain's minimum wage is going up and for around 2.5 million workers, mostly women according to government estimates, it' will mean a welcome income boost throughout 2026 that will be backdated to the start of the year.
The increase has been agreed between the Ministry of Labour and Spain's two biggest trade unions, UGT and CCOO, although it hasn't gone down well with everyone. Business organisations and employer reps have already rejected the rise, making it clear they weren't on board before the ink was even dry.
Labour Minister Yolanda Díaz confirmed the new Minimum Interprofessional Wage, known in Spain as the SMI, will rise by €37 a month, a 3.1% increase that takes the minimum to €1,221 gross per month. Over the course of a year, that adds up to an extra €518 in workers' pockets.
If you're trying to work out what this means for you personally, there are a few things worth understanding before you get too excited or too disappointed by the numbers.
When does it come into effect?
The increase needs to be formally approved by the Council of Ministers, which was expected to happen this week, after which it will be published in the Official State Gazette, the BOE, within three weeks at most.
Importantly, the government intends for the rise to be backdated to the start of the year, so workers won't miss out on the months already gone. Once the Royal Decree is signed and in force, every employer in Spain will be legally required to pay the new rate.
How much will you actually take home?
This is where things get a little more nuanced, because the €1,221 figure is a gross salary, meaning it's the amount before deductions. What lands in your bank account each month will be less, once social security contributions and income tax withholdings are taken out. Annually, the gross minimum wage will come to €17,094, paid across 14 instalments as is standard in Spain.
The exact net figure will vary from person to person depending on individual circumstances such as marital status, whether you have children and the type of contract you're on, which means not every minimum wage worker will see exactly the same amount hit their account.
What about your tax return?
The 2025-26 Declaración de la renta campaign is fast approaching, kicking off a day early this year on April 8. To stop the pay rise being quietly eaten up by income tax, the government is maintaining a special deduction system similar to the one used last year.
In practice, this means that any tax withheld from minimum wage earners throughout the year will be returned when they file their annual income tax return. The end result is that workers on the minimum wage should get back whatever was withheld and won't find that a chunk of their pay rise has simply disappeared into the tax system.
It's a reassurance worth noting, particularly for those who might otherwise wonder whether a higher gross figure actually translates into anything real at the end of the month.
