Montero advocates for a specific deduction to adapt personal income tax to the minimum wage.

MadridBoth partners in the Spanish government, the PSOE (Spanish Socialist Workers' Party) and Sumar (Sumar), are seeking a way to prevent workers earning the minimum wage (SMI) from having to pay personal income tax. The Minister of Finance, María Jesús Montero (PSOE), and the Minister of Labor, Yolanda Díaz (Sumar), are continuing negotiations to reach an understanding on an issue that has been one of the most tense clashes of the year. evidenced in a press conference following a cabinet meeting"He is confident of reaching an agreement in the coming days," Montero confirmed at a press conference this Thursday.

For now, the differences between the two ministries have not yet been resolved, so talks are ongoing. The Treasury's proposal is to offer tax bonuses or deductions for those minimum wage earners who are due to pay personal income tax for the first time. It should be noted that this represents 20% of the total number of these workers: approximately 500,000 people—single and without children—according to calculations by the SMI expert committee. The impact on the public coffers is €200 million, Montero explained.

However, the department headed by Díaz insists that these incomes should be "exempt" from paying personal income tax. However, this would mean leaving the current Treasury's approach of adapting personal income tax to the annual increase in the minimum wage as structural, which Montero rules out.

The 50-euro increase approved in 2025 leaves the minimum wage at 1,184 euros gross per month in 14 installments, or 16,576 euros gross per year. Until now, with each increase in the minimum wage, the Treasury had increased the minimum exempt from personal income tax, so workers who receive it would not have to pay tax on it. This will not happen in 2025, so the exempt minimum approved in 2024 will remain in place: 15,876 euros per year.

Impact on a portion of workers

Workers will notice this in their monthly paychecks, as they will be affected by the lower income tax brackets, for which the Treasury would have withheld part of their salary. Regarding next year's income tax return, regional tax brackets also come into play. The Registry of Economists and Tax Advisors estimated that, on average, a single worker without children earning the minimum wage will have a withholding of approximately €300 per year, bringing the increase in the minimum wage (€700 gross per year) to €400 net. In the case of Catalonia, taking into account the regional tax brackets, the impact would have been €357.43 per year.