The Spanish government has announced a 5.3% increase in the (SMI) to 1,286 euros gross per month across 14 payments. Finance Minister confirmed that those earning the minimum wage will remain exempt from personal income tax in 2027.
To maintain this exemption, tax advisors at REAF-CGE estimate the current 591-euro deduction must rise by over 70% to 1,006 euros. Experts suggest the income threshold for this relief should also increase from 20,048 euros to 22,982 euros to protect earners.
Without these adjustments, up to 69% of the wage rise could be lost to tax. Expanding the deduction for 2.5 million recipients will cost roughly 1,040 million euros. CGE President Miguel Ángel Vázquez has proposed an automatic adjustment mechanism for future.