Minimum Wage Increase for 2025

The Government approves the increase of the minimum wage in 2025: how much it increases and how the payroll will be from January 1

The Council of Ministers approved this Tuesday the revaluation of the Interprofessional Minimum Wage (SMI) from 2025 to 1,184 euros per month in 14 payments with retroactive effect from January 1. This is how the payrolls are and this is how the SMI has evolved in recent years.

The Council of Ministers have approved, at the proposal of the Ministry of Labour and Social Economy, the Royal Decree establishing the Interprofessional Minimum Wage (SMI) for 2025. This basic remuneration increases by 4.4% to 1,184 euros per month in 14 payments: 700 euros more per year and 50 euros more per month than the amount established previously.

The minimum wage will rise for around 2.4 million workers, 65.8% of whom are women. 26.8% of those receiving the wage are young people, aged between 16 and 24. By sector, 31% of the beneficiaries belong to the agricultural sector, 14.3% to the Services sector, 5.9% to the Industry sector and 3.4% to the Construction sector. Domestic workers must earn at least 9.26 euros for each effective hour worked.

The revaluation approved today is the result of an agreement at the Social Dialogue Table with the majority trade union organisations, CCOO and UGT, but without the endorsement of the employers’ association CEOE and Cepyme, with the aim of “guaranteeing sufficient remuneration to satisfy the needs of workers and their families”, the Executive said in a statement. The second vice-president and Minister of Labour and Social Economy, Yolanda Díaz, has highlighted that the SMI is a “clear tool” to reduce inequality in Spain.

“From 2018 to 2025, incorporating the current increase, the SMI has experienced an increase of 61% while inflation has risen by 23%. The minimum wage in our country has therefore gained 38% of its purchasing power,” Moncloa recalls.

Specific amounts of the SMI

The amounts that the SMI will have in the year 2025 from January 1 will be the following for the fixed SMI:

Daily SMI: 39.47 euros.
Monthly SMI: 1,184 euros.
Annual SMI: 16,576 euros.
SMI for temporary and seasonal workers , per legal day in the activity: 56.08 euros.
SMI for domestic workers , per hour actually worked: 9.26 euros.

How much has the SMI risen?

With the new increase, the SMI has increased by 61% since 2018. Since Spain’s entry into the Economic and Monetary Union, different stages can be distinguished:

From 1998 to June 2004 , the minimum wage rose by around 2% annually and monthly salaries were less than 500 euros.
From June 2004 to 2009, the SMI was at levels close to 600 euros, but with annual increases of around 5% .
Between 2010 and 2016 , the minimum wage was less than 700 euros, and there was a stagnation in annual variations, not exceeding 1.5% increase, and even with a null increase in 2012 and 2014 after the economic crisis of 2008.
In 2017, the SMI increased by 8% , after 5 years with very moderate increases. This last stage, which runs from 2017 to 2024, has seen the largest increases in the SMI, reaching the highest increase in 2019 (22.3% year-on-year), which meant that the monthly SMI went from 735.90 euros to 900 euros. In 2024, the SMI has reached 1,134 euros, which represents an annual variation of 8%.
From 2018 to 2024 there was a gross increase of 398.1 euros, that is, an increase of 54.1% .

The Treasury has decided not to adjust the personal income tax to the new minimum wage , so it will no longer be exempt and although the majority of workers who receive the minimum wage will continue to not pay taxes, some of their recipients will have part of their gross salary withheld for the first time depending on their personal and family situation, approximately two out of ten.

The exemptions in the IRPF remain as they were last year, leaving the exempt minimum at 15,876 euros , without reaching the 16,576 euros per year at which the new SMI is set.

According to calculations by the Treasury, a taxpayer with a partner and a child under three years of age will not suffer any withholding, just as now, but if he or she is single and without children , 300 euros a year will be withheld, almost half of the 700 euros by which his or her salary will increase.

The Vice President and Minister of Labor, Yolanda Díaz , has insisted today that income corresponding to the new minimum wage should be exempt from taxation . Although she respects the competence of the Treasury in this matter, if an initiative reaches Congress to exempt income from taxation at the SMI, Sumar will support it, she has assured.

The Treasury argued that the IRPF will not be modified, as it has been with previous increases, given that the largest reduction for medium and low incomes has already been approved and the majority of workers who receive the SMI will continue not to pay taxes. “The minority that may suffer a withholding will pay much less tax than they would pay with the IRPF in force under the Popular Party,” Treasury sources have indicated in statements to Efe.

Government spokesperson Pilar Alegría stressed that the money raised “will benefit the improvement of public policies and public services” that all citizens “use.”

“We need to educate about taxation,” Díaz said, but “we believe that tax justice starts at the top, not at the bottom.”