This year, the income tax declaration in Spain presents significant changes that will mainly affect those whose income ranges between 22,000 and 35,200 euros. The Personal Income Tax (IRPF) is one of the most important taxes in the country as it taxes the income obtained throughout the year.
For workers receiving the Minimum Interprofessional Wage (SMI), IRPF withholdings will begin to be applied, which will especially impact specific family profiles. For example, a single worker without children who earns the SMI in 2025 will need to pay 300 euros annually in IRPF. As the salary increases, a higher percentage is paid on additional income.
The reform of the IRPF Regulation, approved in December 2022, introduced an important measure to reduce withholdings on salaries that fall between 22,000 and 35,200 euros, with the aim of alleviating the tax burden on taxpayers in this bracket. This lower withholding in payroll during 2024 will result in a greater adjustment at the time of making the declaration.
On the other hand, those taxpayers with incomes between 22,000 and 35,200 euros will have to make an additional payment when filing their declaration, due to the reduced withholdings throughout the year. Unlike previous years, this increase is not accompanied by a rise in the IRPF exemption threshold. The withholding percentages vary according to the annual income brackets:
- Up to 12,450 euros: 19% - Between 12,450 and 20,199 euros: 24% - Between 20,200 and 35,199 euros: 30% - Between 35,200 and 59,999 euros: 37% - Between 60,000 and 299,999 euros: 45% - More than 300,000 euros: 47%
Although withholdings were reduced for approximately 250,000 Spaniards starting in February 2023, these taxpayers will have to pay the difference when filing their income declaration. To counteract this impact, they can request their employer to apply a higher withholding in the upcoming payrolls.
Finally, workers with a partner and children under 3 years old will remain exempt from paying taxes on the SMI. The IRPF is a progressive tax, where those with higher incomes will pay a larger percentage, while those with lower incomes will pay a smaller percentage.
