What is the minimum wage in Spain in 2025?

The new minimum wage for 2025

The Spanish government has reached an agreement with the unions to increase the minimum wage by 4.41% in 2025. This represents an additional €50 per month, setting the gross monthly amount at €1,184 for 14 payments, which equates to €16,576 gross per year. If the salary is paid over 12 monthly payments with prorated bonuses, the gross monthly amount rises to €1,381. For those working on a daily basis, the minimum daily wage is €39.47.

This adjustment aims to provide stability following the uncertainty caused by the repeal of Royal Decree-Law 9/2024, which had left many companies without a clear salary reference. The publication of the new decree in the Official State Gazette confirmed the predictions made in the Third Report of the Committee of Experts on the minimum wage, which had already anticipated the €50 monthly increase.

When does the new minimum wage come into effect?

The adjustment to the minimum wage came into effect retroactively on 1 January 2025. This means that companies must update payrolls and pay the corresponding arrears to their employees from that date.

The 2025 minimum wage for seasonal workers and domestic employees

The increase in the minimum wage also applies to workers with specific contracts, such as seasonal and domestic workers, adjusting the amounts based on their working hours and type of contract. For these groups, the minimum wage is set at:

• Temporary and seasonal workers (with contracts of up to 120 days in the same company): €56.08 gross per day
• Domestic workers (paid by the hour): €9.26 gross per hour worked

The minimum wage for part-time workers

If a worker works fewer than 40 hours a week, their salary will be calculated in proportion to the minimum wage:

• 20-hour weekly contract (part-time): €592 gross per month in 14 payments; €690.50 gross per month if the payments are prorated over 12 months
• 30-hour weekly contract (75% of full-time work): €888 gross per month in 14 payments; €1,035.75 gross per month if payments are prorated over 12 months

In this way, any reduction in hours in the contract will proportionally affect the minimum wage that the worker must receive.

The new features of the new minimum wage

The increase in the minimum wage in 2025 has introduced a significant change. For the first time, workers receiving this minimum income will be required to pay personal income tax, which effectively limits the increase announced by the Spanish government.

Despite differences between the Ministries of Labour and Finance on this issue, the refusal of María Jesús Montero, First Vice President of the Government and Minister of Finance, to continue raising the tax-exempt minimum to match the rise in the minimum wage has prevailed. As a result, the Treasury will collect €300 of the €700 annual increase. The Treasury argues that, despite this rise, "the majority of workers earning the minimum wage will still not be subject to income tax withholdings."

However, the figures tell a different story. Following the increase in 2025, the minimum wage will rise from €15,876 to €16,576 per year, representing a €700 gross annual increase. But here’s the catch: the tax-exempt minimum remains at last year’s level of €15,876 per year.

As a result, of the €700 increase in 2025, €346 will go directly towards paying personal income tax and social security contributions, as they will be taxed at the 24% income tax rate, rather than being exempt as in previous years, when income tax was adjusted to the new minimum wage.

As a result, the employee will actually receive just €354 net per year, far from the €700 calculated in gross terms. Additionally, the impact of inflation must be considered.

In 2024, the consumer price index (CPI) stood at 2.8%, meaning the increase would have needed to be €445 net for workers to maintain their purchasing power. To make matters worse, the CPI has started 2025 with further increases, having reached 2.9% year-on-year, marking a seven-month high.

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Proposals for exemption from personal income tax reach Congress

The debate over whether workers receiving the minimum wage should pay taxes is still ongoing. This discussion has extended beyond the coalition government and has involved all political parties, from Sumar to the PP, as well as Esquerra Republicana (ERC) and the BNG.

So much so that the PP, Sumar and Podemos have proposed tax exemptions for those earning the minimum wage, and their proposals have passed the first stage in the Congress of Deputies. The texts will now be sent to the Spanish Government, which will have one month to decide whether to veto them or allow further debate.

Brussels demands a uniform approach

Despite the increase in the Interprofessional Minimum Wage in 2025, the European Commission has emphasised the need for a standardised updating method, based on economic indicators, rather than relying solely on negotiations between the Government, social partners and other involved stakeholders.

To this end, the European Union is considering the possibility of linking minimum wage reviews to objective economic parameters, such as:

• Cost of living and inflation
• GDP growth
• The country's productivity
• The overall wage evolution

Who is affected by the increase in the minimum wage in 2025?

The increase in the minimum wage has a direct impact on various groups, particularly those with lower incomes. The main beneficiaries include:

• Workers without a collective agreement, since the minimum wage functions as a basis in the absence of specific agreements
• People with low wages, ensuring that no worker receives a salary lower than the established minimum
• Social contributions and public benefits, since many grants and subsidies are calculated taking the minimum wage as a reference

This increase aims to protect the purchasing power of low-income workers and impacts key sectors of the economy, affecting both employees and self-employed workers, as well as companies.

Adjustment of the minimum wage for self-employed persons with employees

For self-employed workers with employees, updating the minimum wage can be a challenge, particularly in sectors with narrow profit margins. To adjust salaries without breaching the regulations, you can:

• Include salary supplements (seniority, productivity) if the agreement allows it.
• Verify that the annual remuneration complies with the legal minimum

The evolution of the minimum wage in recent years

In recent years, the minimum wage has seen significant growth. In just seven years, it has increased by more than 50%. Here is how it has evolved since 1980:

What is the minimum wage in Spain compared to other countries?

According to Eurostat, these are the latest data on the monthly minimum wage as of February 2025 in Europe:

On the other hand, if the Purchasing Power Standard (PPS) were used – an artificial reference unit designed to eliminate price differences between countries and enable comparisons – the result would be as follows:

Can the increase in minimum wage be absorbed with seniority bonuses?

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Since 2022, a Supreme Court ruling has confirmed that companies can absorb the increase in the minimum wage using seniority bonuses, provided that the worker’s total remuneration meets the established legal minimum.

This criterion was reinforced following the case of the Associació Empresarial d'Economia Social, where the High Court of Justice of Catalonia (TSJC) ruled that increases in the minimum wage can include the seniority bonuses accumulated by workers over the years.

The TSJC ratified this principle, establishing that if an employee has a base salary lower than the minimum wage, but whose total remuneration (including bonuses) exceeds the legal minimum, the company is not obliged to increase the base salary.

This means that an increase in the minimum wage does not always lead to a direct increase in wages, as the bonuses can be considered part of the minimum wage, provided there is no specific clause in the collective agreement that prohibits it.

Can minimum wage be offset with extra-salary benefits?

Unlike bonuses, extra-salary benefits cannot be used to offset the increase in the minimum wage. This is established by the ruling Rec. 60/2020, which states that concepts such as travel allowances, transportation compensation or reimbursements for work expenses are not part of the base salary.

Furthermore, the minimum wage only applies to the standard working day, so the following concepts must be paid separately:

• Overtime: Minimum wage does not influence its calculation, but must be paid additionally.
• Night work: Compensation for night work must respect what is established in the collective agreement, whether in the form of extra payment or compensatory rest.

Fines for failing to comply with minimum wage

According to the Law on Offences and Penalties in the Social Order (LISOS), the Labour Inspectorate can penalise companies that fail to pay the minimum wage with fines ranging from €751 to €7,500, depending on the severity of the offence, which is classified as very serious.

Moreover, the company must regularise the contributions owed to Social Security, paying the corresponding amounts.