Minimum wage review in autumn to bring fresh increase

SPAIN'S minimum wage is set to go up again by next year as part of a longer-term plan to bring it to 60% of the national mean average salary, in accordance with European Union guidelines.

Since the turn of the century and up to socialist president Pedro Sánchez's winning the elections in 2019, the minimum pay for a full-time, 40-hour-a-week job had been between just under €600 and €700, reaching €735 a month by the time Sánchez took up office.

This is based upon 14 monthly pay packets per year, in line with a largely-diminishing tradition of giving workers a double salary in August and at Christmas – nowadays only really observed in the public sector and for State pensions.

By the end of 2021, the minimum wage under Pedro Sánchez had risen to €965 a month over 14 months, or €13,510 per year.

This, for employees who get 12 monthly wage packets per year, would equate to a take-home of approximately €1,054.30.

In February 2022, the coalition government – run by the PSOE or socialists and its left-wing independent partners Unidas Podemos – agreed for the minimum wage to rise to €1,000 a month in 14 payments, giving a total gross annual salary of €14,000.

This would result in 12 monthly take-home salaries of approximately €1,092.60.

Sánchez says the minimum salary will be reviewed 'this autumn' and is likely to rise by 2023, the final year of his current tenure.

European Social Charter: Minimum wage not lower than 60% of average salary

Whilst not mandatory at present, the European Commission strongly advises member States to set their minimum wages at a figure not less than 60% of the national average individual income – even though this does not always reflect what the 'standard' earnings of a country are, since very high earners will always skew the figures.

This recommendation falls within the European Social Charter, drawn up in the aftermath of the continent-wide recession that led to widespread unemployment and poverty a decade or so ago.

Increasing the minimum wage, as well as making it easier for workers to survive – and even spend money on non-necessities – is crucial for clawing in government funds, too, since at present the lowest amount a person can earn for working 40 hours a week falls within the tax-exemption threshold.

Some public help available to low earners

Although a couple living together, working full-time and on the minimum wage, with a mortgage, would be able to meet their expenses fairly comfortably, a single person or a couple with one or more children would find it difficult, if not impossible, to make ends meet on their present salary.

In-work benefits do not exist in Spain, although those earning sums well below the minimum wage may be able to apply for certain one-off annual council tax discounts, and reduced-rate electricity bills.

Greater tax breaks and concessions are available for households considered 'large families' – a single parent with two children, a couple with three children, or with two where one is disabled – and some local assistance at town council level may be offered for low-income families or individuals in general.

Recently, it was announced that a one-off payment of €200 would be given via the national tax authority to all low-income people, and a 'minimum living income' (Ingreso Mínimo Vital, or IMV) was launched nearly two years ago for those on exceptionally-reduced earnings.