The Spanish government has approved a 4.4% increase in the minimum wage, raising it to €1,184 per month across 14 payments—a €50 monthly increase. This adjustment translates to an additional €700 annually for 2.4 million workers, though tax regulations mean some individuals may see up to €300 withheld by the Treasury, reducing the net benefit of the increase.
This wage hike follows a period of legal uncertainty after the rejection of an omnibus decree annulled the 2024 minimum wage extension. Effective immediately, the minimum annual salary for full-time employment is set at €16,576 gross.
Second Deputy Prime Minister Yolanda Díaz hailed the increase as a significant achievement, emphasizing that the current administration has raised the minimum wage by 61% since 2018, when it stood at €735. “Today we are taking a historic step with this new rise in the minimum wage,” Díaz stated. “Contrary to what has been written and spread, raising the minimum wage is not a threat to Spain, but rather the best course for the country’s progress. The history of the minimum wage in our country is a success story.”
Despite the celebratory tone from government officials, the measure has sparked national disappointment due to a historic shift in tax policy. For the first time, Spain’s minimum wage will not be fully exempt from taxation. Some low-income earners, depending on their personal circumstances, will be required to file income tax returns and pay taxes. While the Treasury asserts that only a small percentage of workers will be affected, critics argue that the change undermines the intended financial relief of the wage increase.
The new wage structure is expected to impact Spain’s labor market significantly, with debates ongoing about its broader economic implications. The government maintains that raising the minimum wage benefits the economy and workers alike, while opponents highlight the potential financial burden introduced by new tax obligations.