Royal Decree 145/2024, of 6 February, approved by the Council of Ministers and published in the Official State Gazette on 7 February 2024, establishes the Minimum Interprofessional Wage (SMI) for 2024 at €1,134 per month over 14 payments, equivalent to €37.80 per day or €16,016 per year when the two compulsory extraordinary payments are included. This represents a 5% increase over the SMI approved for 2023 (€1,080 per month) and consolidates the upward trend that began in 2018, when the SMI stood at €735.90 per month.
Context: the SMI trajectory since 2018
The trajectory of Spain’s minimum wage since 2018 is the most expansive in percentage terms of any period in the country’s democratic history. In six years, the SMI has risen by 54%, from €735.90 in January 2018 to €1,134 in 2024. This accumulated increase significantly outpaces inflation over the period (approximately 25% on the general CPI) and has meaningfully improved the purchasing power of the lowest-paid workers.
The legal framework enabling annual SMI setting is Article 27 of the Workers’ Statute (Royal Legislative Decree 2/2015, of 23 October), which assigns to the Government the annual determination of the SMI by Royal Decree, following consultation with the most representative trade union and employers’ organisations, taking into account the CPI, national average productivity, the increase in labour’s share of national income and the general economic outlook.
Direct effects on businesses: salary structure and collective agreements
The SMI increase has different effects depending on where a company’s salaries stand relative to the new legal minimum.
Workers paid at the previous SMI. Workers receiving exactly €1,080 per month must move to €1,134, with retroactive effect from 1 January 2024. Companies that have used the SMI as a direct reference for their salary scales must update their payroll and pay the differences owed since January.
Wage supplements and the absorption clause. The Supreme Court (STS of 22 April 2014 and subsequent rulings) has established the doctrine that the SMI constitutes the minimum wage on an annual calculation basis, including all remuneration. Wage supplements — seniority supplements, collective agreement bonuses, personal complements — may be counted together with the base salary to reach the SMI, unless the collective agreement expressly states otherwise. However, overtime pay, supplements with a periodic accrual period exceeding one month (such as additional extraordinary payments) and expense reimbursements are not counted for this purpose.
Revision of collective agreement salary tables. Many sectoral collective agreements establish salary tables with references to the SMI or with minimum agreed salaries that have fallen below the new legal SMI. In these cases, the SMI acts as the legal minimum floor: any agreed salary below the SMI is displaced by operation of law and the SMI must be applied. Companies must review their applicable agreements to identify any situations of under-remuneration.
Impact on Social Security contributions
The SMI increase also has consequences for Social Security contributions. The minimum contribution base for the General Scheme is determined by contribution group, but cannot in any case be lower than the SMI in force at any given time. When the SMI rises, the minimum contribution base for workers paid at or near the minimum also rises, which increases the employer’s Social Security cost — both in the employer’s contribution and in the worker’s social insurance.
For a company with 10 workers on the SMI, the 2024 increase represents an additional total Social Security cost of approximately €2,500 to €3,000 per year, depending on the contribution structure and applicable rates.
Penalties for non-compliance
Failure to comply with SMI obligations constitutes a serious offence in employment relations and labour law, pursuant to Article 13.1 of Royal Legislative Decree 5/2000 on Infringements and Sanctions in the Social Order (LISOS). Penalties range from €751 to €7,500 per infringement, with additional sanctions possible in cases of recidivism. Workers may also claim salary differences within a one-year prescription period running from the date the payment obligation fell due (Article 59 ET).
At BMC our legal team is at your disposal. See our legal services.
