Salary arrears must be taxed in the tax year they were due

The management of delays in salary payments poses a significant challenge in determining the tax period for Personal Income Tax (IRPF). The Directorate General of Taxes (DGT) has specified the tax treatment these amounts must receive when they are received outside the tax year in which they should have been paid.

What the DGT has ruled

The administration's criterion establishes that income from employment must be imputed to the tax period in which it is due to the recipient. The regulations provide for a specific exception for situations in which, due to justified circumstances not attributable to the taxpayer, payments are made in periods different from those in which they were due.

In these cases, the DGT determines that the amounts must be imputed to the tax years in which they were originally due. For example, if a worker receives remuneration corresponding to the 2025 tax year in the present, such amounts must be taxed in the 2025 tax year, regardless of whether the actual income occurs in a subsequent year.

What this means for you

This criterion directly affects individuals who receive late payments of their salaries or remuneration. The operational consequence is that the taxpayer should not declare the income in the year they receive the money in their bank account, but rather in the year they were legally entitled to collect it.

This implies that the calculation of the taxable base and the application of IRPF marginal rates must be carried out following the chronology of when the salary debt was due, rather than the chronology of cash flow.

What you should do

Upon receiving payments for salary arrears, it is necessary to:

• Precisely identify the tax year to which the received remuneration corresponds.
• Verify that the delay in collection is not attributable to the worker in order to apply this temporal imputation criterion.
• Ensure that the tax return reflects the income in the year it was due to avoid discrepancies with the Tax Administration.