The 2025 Spanish minimum wage (SMI) was set at €1,184 per month over 14 payments (€16,576 per year) by Royal Decree approved at the end of 2024, with retroactive effect from 1 January 2025. This increase of €50 per month over the 2024 SMI (€1,134) represents a rise of 4.4% and reinforces the Government's commitment to setting the SMI at 60% of the average wage — a reference objective established by the revised European Social Charter and recommended by the committee of experts provided for in Article 26 of Directive (EU) 2022/2041 on adequate minimum wages.
The EU Minimum Wages Directive: the reference framework
Directive (EU) 2022/2041 of the European Parliament and of the Council, of 19 October 2022, on adequate minimum wages in the European Union, requires Member States with statutory minimum wages to have procedures for setting and updating them regularly, with quantitative adequacy criteria including 60% of the gross median wage and 50% of the gross average wage.
Spain transposed the Directive within the deadline (before 15 November 2024) by updating the existing SMI-setting mechanisms already present in Article 27 ET, without requiring substantial legislative changes, since the Spanish system already provided for consultation with the social partners and similar adequacy criteria. The Directive does not require Member States to reach the 60% of median wage threshold by a specific deadline, but does require them to periodically assess whether the SMI is adequate against those criteria.
Cost of the increase for businesses: sector-by-sector analysis
The €50 per month gross SMI increase has effects on total labour costs that go beyond the wage differential, since they also pull up Social Security contributions on the minimum contribution base.
For a full-time worker contributing in Group 10 (workers over 18 without qualifications), the minimum contribution base aligns with the SMI. The employer’s contingency contribution rate is 23.6%, to which are added the unemployment rate (5.5%), FOGASA (0.2%) and vocational training (0.6%), giving a total employer rate of 29.9%. On an increase of €50 gross per month, the additional cost to the employer per worker per month (including the employer’s Social Security contribution) is approximately €65, or around €780 per year per worker.
The sectors with the greatest exposure to the SMI — where the proportion of workers remunerated at or near the minimum is highest — are hospitality and catering, retail trade, cleaning and auxiliary services, agriculture and livestock, and domestic workers. In these sectors, the SMI increase may represent between 2% and 5% of total labour costs, with a direct impact on operating margins.
Interaction with collective agreements
The SMI increase to €1,184 affects sectoral collective agreements with salary scales below the new legal minimum. The lowest-remunerated professional category in a collective agreement — typically general workers, service auxiliaries or unskilled support staff — cannot be paid below the SMI.
In practice, some collective bargaining tables use the SMI as an anchor for the lowest categories, which simplifies negotiation but also obliges parties to update salary scales each year. Companies with a company-level collective agreement or applying company agreements on remuneration must expressly verify that no category falls below €1,184 per month from 1 January 2025.
The SMI and the reduced working hours reform
The reform reducing the maximum working week to 37.5 hours, approved in 2025, interacts with the SMI at one specific point: the minimum wage per effective hour of work. As the annual maximum working hours decrease (from approximately 1,826 to 1,712 hours), the SMI per effective hour of work increases by more than the nominal rise alone. For part-time workers, whose remuneration is calculated on a proportional basis, this effect is particularly significant, since collective agreements setting minimum hourly rates for part-time work must be reviewed taking into account both the new nominal SMI and the new maximum working week.
The compound effect of higher nominal SMI and lower maximum hours means that the effective hourly cost of labour is rising faster than the headline SMI figure suggests — a distinction that labour cost models for 2025 must capture explicitly.
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