The Ministry of Finance has confirmed that the minimum interprofessional salary (SMI) will pay IRPF for the first time after the new rise of 50 euros per month (up to 1,184 euros, in 14 payments), which the Council of Ministers has approved on Tuesday.

The ministry led by vice president María Jesús Montero defends that most workers who earn the minimum wage will still not suffer withholdings for the IRPF. Until now, the Treasury had adapted the minimum exempt from income tax to the SMI increases, assuming the cost it supposes for public coffers. This time, he has decided not to do it.

The report of the expert commission for this year’s SMI includes precisely an appendix in which the Tax Agency provides calculations on how many working people who receive the minimum salary would pay IRPF in 2025 if the Treasury did not raise the exempt threshold. Approximately half a million, the majority, single and without loads, 20% of the nearly two and a half million in total that charge “this dignified income floor.” Many of them, young people, in their first jobs.

The remaining 80% are still free to make the income statement, because its minimum exempt increases a little more for deductions for caring for other people, and having them in charge.

These single people without descendants or deductible ascendants for the purpose of calculating withholdings will pay 300.05 euros per year (21.4 euros/month, alleged 14 payments). For these people, the type of retention of the IRPF would be about 2%.

For its part, a taxpayer with a partner and who has a child older than three years will have a retention of 99 euros a year. However, a taxpayer with a partner and who has a child under three years old will not suffer any retention in the IRPF.

The minimum interprofessional salary (SMI) has become one of the flags of the coalition government, which has risen 61% since Pedro Sánchez arrived at La Moncloa.

This year, however, the increase has been somewhat eclipsed by the debate within the government and among the main economic agents on whether the minimum wage had to pay IRPF for the first time. In this discussion, the right has taken the opportunity to intensify antimposed discourse. The PP Tildó is Monday of “plunder” that workers who charge the minimum wage contribute to the personal income tax.

How much do each salary retain at the IRPF?

Average retention type to the Salaries of the Spaniards in the IRPF according to the gross amount charged in 2023

Source: Tax Agency

In the graph of this information, with data from the Tax Agency of 2023, it is observed that companies retain between 2% and 3% of the IRPF of the lowest salaries (work income), even if they are exempt from paying it. And the step is also seen from the minimum wage. On this occasion, the Treasury will not move this step again.

The minority partner of the Coalition Government does not take the debate. The spokeswoman of the Parliamentary Group of Almar, Verónica Martínez, announced this Tuesday that she will look for parliamentary paths to amend that decision if María Jesús Montero does not “rectify.”

In the press conference after the Council of Ministers, the Second Vice President and Minister of Labor, Yolanda Díaz, has stressed that their position is known, that all perceptors must be exempt from paying IRPF, and that “fiscal justice must begin with Above and not below, what they have the most, are the ones that have to contribute the most. ”

A key to the Treasury decision is that, in 2018, the minimum wage was “marginal.” He barely covered “a few hundred thousand” of workers who were not under the mantle of any collective agreement, as the leader of CCOO, Unai Sordo explained on Monday.

After the successive increases of the progressive coalition government, the minimum wage has been encompassing more and more people. In a country of low wages, the SMI has been exceeding the smallest remuneration of many collective agreements, until reaching around 2.5 million working people, according to the calculations of the Ministry of Labor. It is almost 13% of the total employees.

The position of the Ministry of María Jesús Montero is that the relevant thing is to ensure that the salary received by workers who charge the SMI is around 60% of the average salary. As they point out, that is currently fulfilled. Meanwhile, the vice president has not stopped asking for “fiscal pedagogy”, and to remember that “taxes are directed to ensure that, given health, disease, dependence, talent, workers have equal opportunities.”

For example, OECD reports reflect that, in Spain, low and medium income supports an IRPF less than the European average. In addition, the minimum salary taxes in IRPF in countries such as Germany, France, the Netherlands or Poland.

A good number of experts also defends that IRPF must be reinforced as “control and management instrument, in which everyone is inside”, for example, to favor the granting of aid or the design of policies such as the Minimum vital income (IMV) or benefits, according to Luis Zarapuz, of the economic cabinet of workers commissions.

Minister Yolanda Díaz has agreed that “fiscal pedagogy” is needed, but has insisted that you have to look at the richest. There is practically consensus among experts in which Spain needs a deep tax reform so that holes are covered in the Corporation Tax – the benefits of large companies have grown much more than their fiscal contribution has done – or so that The taxation of capital is equal (dividends, rentals …) to that of work.

But the government can barely address it for its parliamentary weakness. In recent weeks, it has been unable to carry out the lien to the oligopolistic profits of the energy sector, with which it intended to increase the collection by 1,000 million. Meanwhile, he has announced fiscal discounts to the owners who enter income to rent their homes, to which Yolanda Díaz herself in the Council of Ministers herself. Therefore, Luis Zarapuz lamented on Monday that influencing the IRPF debate and the SMI was not “a balanced message for society.”