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The Spanish government has just proposed to unions and employers that the national minimum wage be raised by 3.1% in 2026, reaching €1,221 gross per month, paid in 14 instalments, or €17,094 per year.

 

The current minimum wage stands at €1,184 per month, meaning this proposal would increase salaries by €37 per month. Those receiving the minimum wage will continue to be exempt from income tax, as confirmed by the Secretary of State for Employment, Joaquín Pérez Rey.

 

Union and employer representatives are expected to announce in the coming days whether they support the proposal or not. In principle, the unions CC OO and UGT are expected to approve it next Monday, but the meeting also opened the possibility that employers may support the 3.1% increase compared to the 1.5% they initially proposed, according to Mr Pérez Rey.

 

Once agreed, the increase will be approved shortly by the Council of Ministers and will have retroactive effects on all payrolls for the approximately 2.5 million minimum wage earners from January 1.

 

The government opted for the lower end of the threshold suggested by the committee of experts, which recommended a 3.1% rise if the minimum wage remained exempt from income tax, or a 4.7% increase up to €1,240 per month (€17,360 annually) if recipients began paying taxes on this income.

 

The Secretary emphasised that "the beneficiaries of this income will not pay taxes," a position maintained despite the repeated demands of the Ministry of Finance.

 

He also clarified how the tax-free status will be applied, saying, “The Ministry of Labour's proposal is agreed upon with the Treasury; it is a government proposal to exempt the resulting amount (€1,221 per month) from taxation. How to implement this tax relief, exemption, or appropriate tax mechanism is something we leave to the Ministry of Finance, but it is most likely that it will continue to be structured in the same way as in previous years.”

 

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