Living and working conditions

Print this page

Spain


Living conditions

Income and taxation

 

Every worker receives a periodic remuneration in the form of a salary, normally paid monthly.

The employer is empowered to deduct tax and social security contributions that are legally due on workers’ monthly salary. Below are examples of gross and net pay, i.e. before and after the corresponding deductions have been made. 

The following amounts are average wages calculated for a worker under age 65 working a 40-hour week and without taking into account non-standard payments, bonuses or other additional payments. Social security deductions are 6.3 % and in this case the income tax withheld is 10 %. The amount of income tax withheld depends on the worker’s family situation and the duration and type of the work contract.

It is 25 % for workers who are not tax residents, except for farm workers for whom the deduction is 2 %. 

Occupation

Monthly gross pay

Social Security

Income Tax

Monthly net pay

Waiting staff

EUR 953

EUR 60.51

EUR 95.30

EUR 797.19

Tele-operator

EUR 886

EUR 56.26

EUR 88.60

EUR 741.14

Industrial engineer

EUR 2 130

EUR 139.08

EUR 213

EUR 1 777.92

Computer expert

EUR 1 216

EUR 77.26

EUR 121

EUR 1 017.74

Administrative worker

EUR 936

EUR 59.43

EUR 93.60

EUR 782.97

National minimum wage (SMI)

EUR 707.70  735.90

 

 

 

 

1. DIRECT TAXES 

A. Personal Income Tax [Impuesto sobre la Renta de las Personas Físicas – IRPF]: charged on all income obtained from work, professional or business activities, investments and wealth. 

The amount of this tax is determined by the income level reached during the financial year, which coincides with the calendar year, and it is a progressive tax (the higher the income, the higher the percentage of tax, starting from a minimum that is exempt). The obligation to file a tax return starts from EUR 22 000 per year from a single income source (employer).

Income tax returns are filed in May and June of the year following the tax year in question and fines are imposed for failure to file or late filing. 

As a general rule, if you live in Spain for 183 or more days during a given tax year, you will have to declare all your income there, regardless of where you earned it. In determining one's ‘tax residence’, however, other considerations may be taken into account, such as close personal and economic ties, residence of family members, the place where most of the work is performed, etc. You are therefore advised to seek further advice if you are unsure.

If you have worked in Spain for fewer than 183 days and are then going to move to another EEA country, you can request a rebate of a proportion of the deductions made from your salary. To do so, you need to submit form 215 to the Tax Agency, a certificate of residency from the country to which you are moving and a certificate of the deductions made. The deadline for applying for a rebate is four years. 

B. Corporate tax: this is very similar to personal income tax (IRPF) but it applies to legal persons. The current tax rate is 30 % for large businesses and 25 % for smaller businesses (SMEs), but there are also other special rates. 

C. Inheritance and gift tax: levied on goods and services inherited or on gifts made inter vivos.

2. INDIRECT TAXES: 

A. Value added tax (VAT): levied on the supply of goods and services by employers and professionals and on imports. The tax rates are 4 %, 10 % and 21 % depending on the type of goods, and without prejudice to statutory exemptions. 

Property transfer tax and stamp duty: levied on particular transactions and legal and commercial documents, such as the purchase of real estate and taking out mortgages. 

There are also other EXCISE DUTIES, levied on the consumption of particular goods such as alcohol, tobacco and fuel. 

In addition to these national taxes or taxes devolved totally or partially to the Autonomous Communities, other LOCAL TAXES are levied by municipalities, such as property tax and vehicle road tax.

 

Text last edited on: 01/2020

Are you satisfied with the information provided on this page?