The Government approves the increase in the minimum wage to 1,134 euros and an increase of 0.5% for public salaries
On Tuesday, the Government approved an increase in the minimum interprofessional wage (SMI) to 1,134 euros per month in 14 payments, which is 5% higher than in 2023. Additionally, public salaries will receive an extra 0.5% increase with retroactive effects to 2023. These measures will benefit about 5.5 million workers, representing 29% of all employees in Spain. Furthermore, the Government raised the minimum exemption from withholding in the personal income tax regulations to 15,876 euros, which is equivalent to the SMI for one year. This measure will prevent minimum wage recipients from having to pay any taxes.
Government spokesperson Pilar Alegría stated that these measures “dignify the quality of life of the people of this country” and highlighted that the SMI has increased by 54% since Pedro Sánchez took office in 2018. Vice President and Minister of Labor Yolanda Díaz emphasized that while there is still progress to be made, Spain is taking a decisive step in the fight against precariousness. Vice President and Minister of Finance María Jesús Montero noted that the modification of the minimum exemption from withholding will benefit 5.2 million taxpayers with low incomes, resulting in a total savings of 1,385 million euros in 2024.
While these salary improvements were previously announced by the respective ministries, their endorsement by the Council of Ministers is necessary for them to be reflected in payrolls. As a result, the 2.5 million workers affected by the increase in the SMI will see their salary statement at the end of the month showing a gross salary of 1,134 euros per month in 14 payments. They will also receive an additional supplement for retroactive effects dating back to January.
For public employees, the 0.5% increase varies depending on each case. The average salary of a public employee was 2,835 euros gross per month in 12 payments in 2022, so the salary improvement will be approximately 15 euros per month. As the increase is retroactive to the entire year of 2023, workers will receive a supplementary payment in February to compensate for the 13 months they missed out on. In this case, the amount would be around 195 euros.
With the latest increase in the minimum wage, the Ministry of Labor believes that the goal of reaching 60% of the average salary in the country has been achieved. However, unions argue that this milestone has not yet been met, and future increases should be tied to the evolution of other salaries or inflation to maintain purchasing power.
Regarding public employees, the agreed remuneration increase for 2024 is set at 2%, with an additional 0.5% linked to consumer price changes. The implementation of this improvement is pending the approval of the General State Budgets for 2024, which is not expected to be ready before March and may face further delays. The Executive has not clarified whether alternative methods are being considered to raise the salaries of public employees.