The Spanish government approved the increase in the minimum wage (SMI) on Tuesday. It will be increased to €1.134 per month in 14 payments (5% more than in 2023). In addition, an additional 0.5% increase has been approved for government salaries, with retroactive effect to 2023.
These two wage increases will benefit some 5.5 million workers. This represents 29% of all registered workers in Spain. In addition, the Government has approved the increase of the exempt minimum for income tax withholding to €15,876. This is equivalent to the amount of a year’s minimum wage.
The government’s spokesman, Pilar Alegría, stressed that the measures approved on Tuesday “are of value for the quality of life of people in Spain”.
Minimum wage up 54% under Sánchez
She highlighted that the minimum wage has grown by 54% since Pedro Sánchez came to power in 2018. “Today, Spain is a better country and we are taking a decisive step in the fight against uncertainty,” said the Second Vice President and Minister of Labour, Yolanda Díaz. “There is still a long way to go and we are still a long way from European wage averages, but this disparity is narrowing,” she added. The First Vice President and Minister of Finance, María Jesús Montero, pointed out that the change to the minimum exemption from withholding will benefit 5.2 million low-income taxpayers. They will save a total of €1.385 billion in 2024.
Wages increases ratified
These salary increases had already been announced by the ministries, but they are now ratified by the Council of Ministers. This is a necessary step towards actually seeing the increases reflected in the payslips. Thus, when the 2.5 million workers who benefit from the increase in the minimum wage consult their payslip at the end of the month, they will see how their salary is already €1,134 gross per month, with 14 payments (for whole days). In addition, they will find an additional supplement that could amount to €54 for the civil servants.
Minimum wage at 60% of average wage
With the latest increase in the minimum wage, the Ministry of Labour has achieved the objective of bringing this income – which is paid by companies, although it is set by the government – to 60% of the country’s average wage. But according to the unions, this milestone has not yet been reached. From now on, the increases must be linked to the development of the rest of wages or inflation. That way, purchasing power is not lost.
Increase in civil servants’ salaries
In the case of the three million officials, the 0.5% increase depends on each specific case. The average salary of a civil servant in 2022 was €2,835 gross per month in 12 payments. This means that the wage increase in this case will be around €15 per month. This 0.5% increase with retroactive effect applies to the whole of 2023. Employees will receive a payment in February to compensate for what they did not receive in the previous 13 months (the twelve months of 2023 and January 2024). That extra will be around €195 in that particular case.
In the case of civil servants, the wage increase agreed between the government and the unions for 2024 was set at 2%, with a further 0.5% linked to the evolution of consumer prices. The application of this measure is still pending the approval of the General State Budget (PGE) for 2024. In any case, it will not be ready before March of this year. There is a good chance that it will be postponed even longer. The government has not yet made it clear whether it is considering alternative ways to increase the salaries of civil servants.