The first vice president and Minister of Finance, María Jesús Montero, has announced the update of the current deduction in the Personal Income Tax (IRPF) to adapt it to the increase in the minimum interprofessional salary (SMI) approved this Tuesday, up to 1,221 euros per month for fourteen payments. The objective, as explained, is that those receiving the minimum wage do not have to assume a greater tax burden after the salary increase.
“We accompany the approval of the interprofessional minimum wage with a new tax review for low incomes, so that these people who receive the interprofessional minimum wage do not have to pay the corresponding tax part,” the head of the Treasury said in the press conference after the Council of Ministers.
The measure will mean, in terms of deduction, a tax reduction of up to 591 euros for people with salaries below 20,000 euros. Montero explained that, although the minimum interprofessional salary is 17,094 euros per year, to avoid the so-called “jump error” it is lowered to 591 euros for people whose salaries are below 20,000 euros gross per year.
In the case of a person who earns the minimum interprofessional salary in 2026, the Treasury has indicated that they will pay 356 euros less in personal income tax than last year.
The debate on taxation and the agreement with the employers
According to Montero, in the last four years, the Government has reduced personal income tax by 11,160 million for almost ten million taxpayers with lower salaries. “It has been an initiative of this Government, as always, to lower the contribution to low-paid people and ask for a greater effort from those who pay taxes on the high scale,” defended the head of the Treasury.
Montero has defended that this tax deduction was a “clear invitation to businessmen” to sign the agreement, although finally the businessmen have decided to distance themselves from the pact between unions and the Government.
The head of the Treasury recalled that the group of Labor experts for the SMI established an increase range between 3.1% or 4.7% depending on whether or not there was taxation. “The Government decided that labor costs for employers would be lower and, therefore, we have contributed with this 3.1% so that the cost for employers was not such a high cost,” defended Montero, after regretting that, despite this, the employers did not want to sign the agreement.
In any case, Montero has stressed that the Ministry of Finance considers that the debate on minimum taxation and on the interprofessional minimum wage are two different issues. “Our aspiration is that the interprofessional minimum wage continues to grow and reach high levels. The minimum taxation that a citizen has to face is another debate, although for now they are still going hand in hand,” he remarked.