Spain's Salario Mínimo Interprofesional (SMI) is the statutory national minimum wage — the legally-mandated pay floor applicable to all workers in Spain regardless of sector, age or contract type, set annually by Royal Decree after mandatory consultation with trade unions (CCOO, UGT) and employer confederations (CEOE, CEPYME).
Quick answer: Spain minimum wage 2026
Royal Decree 126/2026 sets the 2026 SMI at €1,221/month in 14 payments (€40.70/day; €17,094/year), retroactive from 1 January 2026 — a 3.1% rise from 2025. Employers must pay January–February 2026 arrears in the first payroll run after the decree. The full annual figure is exempt from IRPF, and the minimum Social Security contribution base rises to the same amount.
| Concept | 2025 | 2026 | Change |
|---|---|---|---|
| Monthly (14 payments) | €1,184 | €1,221 | +€37 (+3.1%) |
| Daily | €39.47 | €40.70 | +€1.23 |
| Annual | €16,576 | €17,094 | +€518 |
| Min. SS contribution base | €1,184 | €1,221 | +€37 |
| Domestic workers (per hour worked) | ~€9.27 | €9.55 | +€0.28 |
| Hourly reference (40 h/week, 173.33 h/month) | ~€6.83 | ~€7.04 | +€0.21 |
Spain minimum wage 2026 (SMI) rises to €1,221 per month in 14 payments — a 3.1% increase from 2025, effective retroactively from 1 January 2026 under Royal Decree 126/2026. The annual equivalent is €17,094, fully exempt from IRPF income tax, and the new figure sets the minimum Social Security contribution base for General Regime workers.
Approved amounts
| Concept | 2025 | 2026 | Change |
|---|---|---|---|
| Monthly (14 payments) | €1,184 | €1,221 | +€37 (+3.1%) |
| Daily | €39.47 | €40.70 | +€1.23 |
| Annual | €16,576 | €17,094 | +€518 |
The SMI is understood to refer to the legally established working hours in each activity, without including the proportional part of Sundays and public holidays. Only cash remuneration counts; benefits in kind cannot reduce the full cash amount.
Retroactivity from 1 January
Royal Decree 126/2026 applies throughout the calendar year, from 1 January to 31 December 2026. This obligates companies to regularise January and February payments, paying the corresponding arrears in the payroll run immediately following publication.
Practically, for a worker earning exactly the 2025 minimum wage (€1,184/month):
- January arrears: €37
- February arrears: €37 × (19/28) ≈ €25 (for the days before publication)
These arrears must appear on the payroll and be included in the Social Security settlement for the corresponding month.
Impact on Social Security contribution bases
The SMI increase raises the minimum contribution base for the General Regime and the Special Regime for Self-Employed Workers (RETA). For employees, the minimum monthly contribution base rises to €1,221. Self-employed workers with earnings in the lowest tranches of the real-income contribution table must verify that their chosen base is not below the new reference.
Domestic workers
For domestic workers, the SMI per hour actually worked is set at €9.55, including the proportional part of extraordinary payments and holiday pay. Employers of domestic workers must adjust their employees’ remuneration and, where applicable, update the Social Security registration with the TGSS.
Collective agreements and salary absorption
Salary scales established in collective agreements that were above the previous SMI continue to apply without modification. However, for collective agreements whose salary tables fall at or below €1,221/month, the new SMI applies automatically as the wage floor, with no possibility of absorption or offset under Article 27.1 of the Workers’ Statute.
This means:
- An agreement that sets minimum pay at €1,200/month in 2026 is automatically overridden by the €1,221 SMI — the employer cannot offset the difference against other pay components.
- An agreement that sets minimum pay at €1,250/month is unaffected — it already exceeds the SMI.
Companies should audit their collective agreement tables to identify any entries that have been overtaken by the new SMI.
IRPF income tax exemption
The full SMI amount for 2026 (€17,094 per year) is exempt from IRPF income tax, as it falls below the filing obligation threshold for taxpayers with a single employer. This has been coordinated with the elevation of the employment income reduction introduced in prior years.
Workers earning exactly the SMI (€17,094 gross per year) are not required to file an IRPF return and do not pay income tax on this income. The employer withholds no IRPF on SMI-level earnings.
Implications for multi-year budget planning
The SMI has increased by approximately €3,000 per year (cumulative) since 2019. For companies with significant concentrations of workers at or near minimum wage levels — in hospitality, agriculture, retail, domestic services and entry-level administrative roles — the trajectory of SMI increases should be factored into multi-year cost projections.
The Government has committed to progressively aligning the SMI with 60% of the average wage, which implies further increases in future years.
Recommendations for companies
- Review payroll: verify that no worker receives remuneration below €1,221/month in 14 payments, including arrears from January.
- Update contribution bases: ensure the minimum bases on Social Security settlement documents (liquidation systems) reflect the new amount.
- Audit collective agreements: identify whether the applicable collective agreement’s salary tables fall below the new SMI.
- Domestic workers: notify the TGSS of the new remuneration if an adjustment is required.
- Payroll budgeting: update labour cost projections for 2026 to reflect the retroactive adjustment and the full-year impact.
- Commission and variable pay structures: verify that variable remuneration structures do not cause total monthly pay to fall below the SMI floor in low-earning months.
BMC advises companies on compliance with employment law obligations and adapting their pay structures. Learn about our employment law services.
Regulatory Framework: Key Legal Instruments Governing the SMI
The Spanish minimum wage is set within a statutory framework that determines both the procedure for its annual revision and the obligations it creates for employers.
Real Decreto Legislativo 2/2015, de 23 de octubre (Estatuto de los Trabajadores — ET), Article 27: This is the foundational provision. It requires the Government to revise the SMI annually, taking into account the Consumer Price Index (CPI), national average productivity, workers’ participation in national income, and the general economic outlook. The revision must be preceded by consultation with the most representative trade union and employer confederations (CCOO, UGT, CEOE, CEPYME). The ET also establishes the principle of non-discrimination in pay, which interacts with the SMI: any clause in an individual contract or collective agreement that establishes a remuneration below the SMI is automatically replaced by the statutory minimum (Article 3.3 ET).
Real Decreto 145/2024, de 6 de febrero, fijando el salario mínimo interprofesional: This is the regulatory instrument that set the SMI for 2024 at €1,134 per month (in 14 payments) or €15,876 annually. Each year’s SMI is set by a similar Royal Decree. For 2026, the applicable Royal Decree will set the new figure and specify its effective date — which may include retroactive application to 1 January 2026 if the Decree is published later in the year, a recurring pattern that creates retroactive payroll adjustment obligations for employers.
Real Decreto Legislativo 8/2015, de 30 de octubre (Ley General de la Seguridad Social — LGSS): The LGSS links the minimum contribution bases for certain worker categories directly to the SMI. When the SMI increases, the minimum Social Security contribution base rises proportionally for workers in the general regime whose remuneration is at or near the SMI level. This means the SMI increase has a dual cost impact on employers: higher gross salary and higher Social Security contributions on the increased base. For self-employed workers (RETA regime), the SMI increase does not directly affect contribution bases, which follow a separate system introduced by the 2023 RETA reform linking contributions to net income tranches.
Real Decreto Legislativo 5/2000, de 4 de agosto (LISOS): Failure to pay at least the SMI to any worker covered by the ET constitutes a serious labour infraction under Article 13 of the LISOS. The minimum fine per worker affected is €626 and rises progressively to €6,250 per worker for the most serious cases, with additional aggravating factors applying when the infraction affects multiple workers or constitutes discriminatory treatment.
The interaction between these instruments means that SMI compliance cannot be checked once and forgotten. Companies with workers at or near the minimum must verify compliance every time the SMI is revised, every time a collective agreement is updated (since conventions may reference the SMI as a multiplier for certain supplements), and every time a worker’s total compensation changes through contract modifications or renegotiation. The most practical approach is to maintain a real-time report of all workers whose total annual remuneration (in 12 or 14 payments) falls within 120% of the applicable SMI, and to trigger automatic review whenever the SMI is revised by Royal Decree.
Key takeaways
- 2026 figure: €1,221/month in 14 payments (€40.70/day; €17,094/year) — retroactive from 1 January 2026 under Royal Decree 126/2026.
- Arrears obligation: Employers must pay January and proportional February 2026 arrears in the next payroll run after publication; €37 per affected worker for January alone.
- Social Security knock-on: The minimum contribution base rises to €1,221, adding approximately €11.10/month in employer Social Security contributions per affected worker.
- IRPF exemption: Workers earning only the SMI from a single employer have zero income-tax withholding and no IRPF filing obligation.
- Collective agreement override: If a sector agreement specifies wages below the new SMI, the SMI applies automatically — no renegotiation required, no absorption or offset permitted under Article 27.1 of the Workers’ Statute.
