Spain Agrees to Raise Minimum Wage by 3.1% to €1,221 Amid Business Opposition
Spain's government and unions agree on a 3.1% minimum wage increase to €1,221, amid opposition from business groups and plans for regulatory reforms.
- • The minimum wage (SMI) will rise by 3.1% to €1,221 gross per month, effective from January 1, 2026.
- • The increase benefits young and low-wage workers, primarily in sectors like agriculture.
- • Business associations CEOE and Cepyme reject the increase, citing concerns about business costs and collective bargaining.
- • The government plans to reform regulations to prevent salary supplements from being offset by the minimum wage rise.
- • Unions view the agreement as a positive step, despite the wage increase being lower than initially proposed.
Key details
The Spanish Government and major unions UGT and Comisiones Obreras (CC.OO.) have agreed to increase the minimum interprofessional salary (SMI) by 3.1%, raising it to €1,221 gross per month across 14 payments, effective retroactively from January 1, 2026. This translates to a monthly increase of €37, approximately €518 annually, primarily benefiting young workers and those employed in low-wage sectors such as agriculture.
Despite government efforts, the business associations CEOE and Cepyme have rejected the wage hike, criticizing it as intrusive and expressing concerns about potential operational cost increases that could harm many businesses. CEOE condemned the agreement as a "trap" undermining collective bargaining, with ATA president Lorenzo Amor calling the increase disproportionate relative to current inflation rates. This marks the sixth consecutive SMI rise without patronal support, the last being in 2020.
Secretary of State for Labor Joaquín Pérez Rey expressed disappointment over the exclusion of employer groups despite intense negotiations and fiscal incentives offered. He emphasized the need for fair wages and announced plans to reform existing regulations to ensure salary supplements are not absorbed by the minimum wage increase, aiming to guarantee workers directly benefit from the raise.
Unions welcomed the agreement cautiously; CC.OO.'s Javier Pacheco viewed it as a responsible gesture for the two million SMI earners, while criticizing employers for their disrespect toward social dialogue. UGT's Fernando Luján acknowledged the 3.1% increase as progress, although below the initially proposed 7.5%, and an important move towards aligning Spain's minimum wage with European standards.
This agreement represents a significant labor policy development aimed at improving low wage earners' conditions, despite ongoing friction with the business sector. The government’s planned reform to protect salary supplements highlights a commitment to ensuring the wage increase benefits workers effectively.
This article was translated and synthesized from Spanish sources, providing English-speaking readers with local perspectives.
Source articles (2)
Source comparison
Taxation under IRPF
Sources report different taxation status of the SMI increase under IRPF.
as.com
"las patronales CEOE y Cepyme han rechazado este aumento, argumentando que la propuesta de deducción fiscal del Ministerio de Hacienda es 'trilera' e 'intervencionista'."
rtve.es
"bringing it to €1,221 gross per month across 14 payments, without taxation under IRPF."
Why this matters: One source states that the SMI increase will not be taxed under IRPF, while the other does not mention this aspect. This difference affects understanding of the financial implications for workers receiving the increased salary.