The interprofessional minimum wage (SMI) is set to rise this year from the current gross 1,080 euros to 1,134 euros, paid in 14 instalments. The increase of 5%, about €54 gross per month or €756 more over the year, takes retroactive effect from January 1. This decision was reached by the Ministry of Labor in agreement with the most representative unions.
The move is expected to benefit around 2.3 million workers. Calculations by the sector show that about 300,000 of these workers are in Catalonia, with many more across Spain. Employers’ associations have signaled concern about higher costs. The government’s plan will also boost income for groups such as those on active retirement. These are the key themes driving the change.
Who will gain from the change?
The beneficiaries include a large share of younger workers, women, and people who immigrated to the country. In many cases, one in ten employees will see a pay rise, particularly among cleaning staff, domestic workers, seasonal fruit pickers, janitors, bakers, shop assistants, delivery personnel, and similar roles. The government has already announced that the 2024 tax exemption for minimum income will be increased to protect SMI recipients from losing out.
The raise takes effect retroactively from January 1, 2024. Companies are required to implement the increase starting with the first payroll of the year, or, if not possible, from February, with back payments for any amounts due. Payroll processing in January may complicate matters, as the government’s final approval comes at the last Cabinet meeting of the month, after many institutions have closed payrolls around the 20th.
What will the net salary look like after the rise?
The 5% revaluation is usually explained on a gross basis: the gross amount rises from 1,080 euros to 1,134 euros, distributed across 14 payments. The new gross figure of 1,134 euros will translate into lower net pay after Social Security and personal income tax withholdings are applied.
The final net amount depends on the employee’s personal circumstances and professional category. For example, a graduate will not pay the same tax as a general worker, and a single person without children will have a different tax burden than a married person with dependents. Age and the autonomous community of residence also influence taxation. With these adjustments, a gross salary of 1,134 euros typically nets about 1,025.4 euros for a 30-year-old, full-time worker living in Catalonia with no dependents, according to a commonly used calculator. A similar estimate from another source places the monthly net near 1,038.2 euros (in 14 payments).
Legal gaps could still reduce the increase for many workers. For instance, if a worker currently earns 1,080 euros and receives an extra 50 euros for night shifts, the company might only have to raise the base salary by four euros, still reaching 1,134 euros gross per month (14 payments). The additional shift pay would be preserved, and other colleagues receive the same adjustment as required by law.
Will retirees benefit from the SMI increase?
Yes. Retirees who work under active retirement arrangements stand to gain as well. The law currently allows pensioners to combine earnings with a pension, but if they want to avoid reducing their pension, they must ensure their yearly income does not exceed the SMI threshold.
As the SMI rises by 5%, the opportunity to earn more opens up for professionals such as doctors, lawyers, and psychologists who are already well compensated. The increased ceiling adds up to an additional €756 in annual income for those who can take on more work or higher earnings within the permitted limit.
What is the cost to employers?
Employers shoulder the main burden of the SMI rise. The €54 monthly increase translates into roughly €82.78 to €86.76 more in labor costs per employee affected, in addition to higher Social Security contributions for the broader salary base.
Currently, a company covers an employee earning SMI as part of a yearly package of salary and contributions ranging from €19,864.6 to €20,824.8. With the rise, that range would move to approximately €20,857.9 to €21,866 gross per year, implying an extra €993.3 to €1,041.2 annually. Some employers quantify the cost monthly, noting the variation by contract type and sector. The final amount will depend on the specific employment terms and industry.
Despite these figures, the main employer federation CE have reportedly remained cautious about endorsing the increase, citing potential pressure on company finances for the coming year.
Will boosting the SMI by 5% affect job growth?
There is currently no definitive, publicly available study showing that the SMI increase will destroy jobs. Past analyses from the Ministry of Labor and independent researchers have examined earlier boosts. A historical review noted that a previous rise to 900 euros in 2019 did not generally destroy jobs but moderated hiring in some firms when wage floors were raised.
Analyses from think tanks indicate mixed outcomes: some measures show a reduction in income inequality and benefits for the most vulnerable groups, with no clear short-term impact on employment. Yet there can be a modest negative effect in the medium term, depending on economic conditions and sector-specific dynamics.