This Tuesday, the Council of Ministers approved a royal decree increasing the amount from 5,565 euros to 7,302 euros. Deduction from earned income inside income tax for the lowest salaries. The measure will prevent the increase in the interprofessional minimum wage (SMI) from 1,080 euros in 2023 to 1,134 euros this year (for 14 payments) from turning into a further tax on personal income tax.
On the contrary, a taxpayer collecting the new SMI (€15,876) in 2024 you will pay 0 euro As the First Vice President emphasized, with regard to personal income tax, Maria Jesus MonteroAt the press conference held after the Council of Ministers meeting. Otherwise there would be taxation. about 330 eurosAccording to calculations from the Register of Tax Advisory Economists (Reaf)
The royal decree, approved by the Council of Ministers and amending the personal income tax regulations, not only increases the deduction for earned income, but also increases the income tax deduction. minimum exemption from withholding tax due to personal income tax (from 15,120 euros in 2023 to 15,875 euros in 2024, the same amount as annual SMI). In this way, according to Montero, it is guaranteed that SMI reaches its recipients fully without any interruption.
The increase in the minimum exemption from withholding tax also means a decrease in withholding taxes. Gross income up to 22,000 euros.
Deduction from earned income
According to Treasury sources, the royal decree approved by the Council of Ministers this Tuesday fully coincides with the decision made public on January 17.
Specifically, the rule stipulates that workers with a “net” salary equal to or less than 14,852 euros in 2024 will be eligible for this benefit. a larger overall reduction in labor income7,302 euros (1,737 euros more than so far). And this larger deduction will be noted when the 2024 income tax return is filed next year.
New reduction in labor income of 7,302 euros for net salaries up to 14,852 euros: is decreasing as the amount of salary increases until it decreases 0 euro Based on net salary of 19,747.5 euros.
First Vice President and Minister of Finance announced that the fiscal measures approved this Tuesday will benefit 5.2 million employees and retirees low income and presumably 1.385 million euros This is a tax savings for taxpayers.
Examples by income level
According to the examples made Register of Tax Consultancy Economists (Reaf), based on the General Council of Economists, the increase in the deduction from earned income will result in tax savings of 327 euros for a salary equivalent to the minimum interprofessional salary (€15,876) according to 2023 taxation.
For annual gross salary 17,000 eurosWhile the savings are around 210 euros, 18,000 euros It will be taxed approximately 100 euros less than in 2023. Savings for the annual gross salary will decrease until they are reduced to only 2 euros. 21,000 euros.
Reaf’s exercise is a guess. It is carried out on the theoretical assumption that the territorial tax rate is the same as that of the State, although it differs in each society. But in any case, in Reaf they emphasize that “a taxpayer collecting the new SMI (€15,876) in 2024 will pay 0 euros as personal income tax in any autonomous community.”
Source: Informacion
James Sean is a writer for “Social Bites”. He covers a wide range of topics, bringing the latest news and developments to his readers. With a keen sense of what’s important and a passion for writing, James delivers unique and insightful articles that keep his readers informed and engaged.