The Government of Spain has approved an increase in the Interprofessional Minimum Wage (SMI) for 2025, setting it at €1,184 gross per month in 14 payments, which represents a €50 increase over 2024. This measure is retroactively effective from January 1, 2025.
Who benefits from the increase in the SMI?
The rise in the SMI will have a significant impact on certain segments of the workforce. In particular:
- Women: they represent 65.8% of those who receive the SMI
- Young people under 25 years of age: they represent 26.8% of the total number of beneficiaries.
Both groups will experience a direct improvement in purchasing power and social protection.
Tax implications: will income tax (IRPF) be payable?
One of the most notable changes concerns income tax (IRPF). Until 2024, workers earning the minimum wage were exempt from IRPF, as their annual income was below the tax threshold of €15,876.
However, with the new annual SMI set at €16,576, that threshold is now exceeded by €700.
As a result, for the first time, minimum wage earners will be subject to tax withholding, though it will be minimal. The exact amount depends on personal factors such as:
- Marital status
- Number of dependent children
- Disability status or other applicable deductions.
IRPF is calculated progressively and individually, so the amount owed will vary case by case.
Practical example
Employee profile: María works full-time as an administrative assistant (40 hours per week).
| Concept | 2024 | 2025 |
| Monthly SMI (14 payments) | €1,134 | €1,184 |
| Annual SMI | €15,876 | €16,576 |
| IRPF Withholding | Exempt | Minimal withholding (based on profile) |
| Contract Changes | None | Mandatory update |
| Social Security Base | Stable | Proportional increase |
In addition to the small tax withholding, employers are required to update both the employment contracts and the social security contribution bases for affected workers.
Conclusion
The SMI increase for 2025 strengthens the economic protection of the most vulnerable groups, although it introduces new administrative and fiscal challenges. Both employees and employers will need to adjust to these changes to remain compliant with current regulations.
