HE interprofessional minimum wage (SMI) will rise this year current gross 1,080 euros to 1,134 euros (in 14 payments). An increase of 5%, equivalent to approximately €54 gross per month or €756 more over the year, will have retroactive effect from this date. 1 January. This was agreed by the Ministry of Labor with the most representative unions.
A decision that will benefit some 2.3 million workers According to the factories’ own calculations, 300,000 of them are in Catalonia throughout Spain. And this will lead to greater costs for companies whose spokespeople have already expressed their rejection of the measure through employers’ associations. The administration’s decision will also allow more money to flow into some groups, such as people on active retirement. These are the keys to ascension.
Who will be the beneficiaries?
Mostly youth, women and people of origin immigrantThey are the most vulnerable groups in our labor market. 1 in 10 employees You will see your salary increase, especially for cleaning women, domestic workers, seasonal fruit workers, janitors, bakery or shop assistants or delivery boys and other profiles. The government has already announced that it will increase the minimum income tax exemption in 2024 to prevent SMI recipients from being disadvantaged.
They will receive the increase retroactively to January 1, 2024. This means that companies must apply the increase starting from the first payroll of the year, otherwise make it from February and then make compensation payments for the amounts due to them. Payment was made in January. The government will not officially approve the increase until the last Cabinet meeting of the month, complicating revaluation operations as institutions typically close payrolls on the 20th of each month.
What will be the net salary of the workers?
The revaluation of 5% of the inter-professional minimum wage is usually explained on a gross basis. So the gross amount is 1,080 euros, which will now be 1,134 euros, and is distributed as follows: 14 payments. This new gross of €1,134 will be less when converted into net amounts and the relevant Social Security and Personal Income Tax contributions paid to the Treasury.
The final amount will depend on the employee’s personal situation and the professional category he/she holds. Just as a graduate does not pay the same tax as a worker, a single person without children does not pay the same tax as a married person with a dependent relative. Age or the autonomous community in which the person resides is also influential. When these filters are applied the gross salary of 1,134 euros is approx. Net 1,025.4 EurosIn the case of a 30-year-old full-time worker living in Catalonia with no dependent children, according to the Bankinter calculator. HE PP published its own figures, using a similar assumption, estimating a monthly net salary of €1,038.2 (in 14 payments).
However, there are legal loopholes that could reduce this increase for many workers. absorb salary supplements To reach this legal minimum. For example, if a worker currently receives a base salary of €1,080 (current SMI before the increase) and earns an extra €50 for working the night shift, the company will only be obliged to increase his salary by four euros from now on. , thus reaching a minimum of 1,134 gross euros per month (in 14 payments). He receives the additional fee and complies with the law, and his colleague who leaves in the morning will receive the same fee.
Will the increase in SMI affect retirees?
Yes, apart from them. Another group that will benefit from the SMI increase is retirees, more specifically those who practice what is known as active retirement. Currently, the law allows retired professionals who receive a pension to combine it with work income. If the retiree does not want their pension to be reduced, they should not exceed the annual SMI equivalent.
The larger the margin, the more doctors, lawyers, psychologists, etc. The more income these professionals can raise, as they are often highly skilled and already have high pensions. Notably, with an increase of 5%, this margin adds another 756 euros in revenue over the year.
How much will the increase cost companies?
Companies will be the ones paying the main bill for the increase in SMI. For them, increasing the minimum wage by 54 euros per month means 82.78 to 86.76 euros more in labor costs for each employee for whom they earn that reference. In addition to increasing the salaries of employees guided by this salary base, they are also required to pay extra through Social Security contributions.
Currently a company must pay an employee receiving SMI between €19,864.6 and €20,824.8 per year, between salary and contributions. This range will now increase to between 20,857.9 and 21,866 euros gross per year. So in between 993.3 and 1,041.2 more euros year. Or, as stated by the Pimec employers’ association, the cost increase is monthly, considering that the contribution is calculated for only 12 months. 82.78 and 86.76 euros (including payments). The final amount will depend on the type of contract and the sector of activity.
Under these conditions, the employer CEOE He once again refused to support the increase for the fourth year in a row, considering that the increase in question was not acceptable for the balance sheets of the companies he represents.
Will increasing SMI by 5% destroy jobs?
Currently, the increase in the interprofessional minimum wage (SMI) is not supported by empirical evidence and has not been preceded by a detailed, publicly available report on its impact on the economy. Years ago, there were specially appointed organizations. Ministry of Labor -like the Iseak Foundation- or on its own initiative Bank of Spain– Report analyzing the impact of the revaluation to 900 euros approved in 2019.
The shared conclusions were that increasing the SMI at that time did not mean that jobs were generally destroyed, but caused a limited brake on hiring in some Spanish companies. Specifically, the Bank of Spain estimated that approximately 154,000 new jobs were not created after the SMI was increased to 900 euros; because there were companies that could hire more people with the same salary, but had to increase this salary, limiting their growth. labor.
from Iseak Foundation They found that raising the SMI has positive effects in reducing income inequalities, benefits the most vulnerable groups to a greater extent, contributes to reducing the gender gap, and has “no impact on short-term employment.” But they also detected a “albeit limited negative impact in the medium term.”