Spain increases the minimum wage by 1,120 euros per year

The Spanish Prime Minister, Pedro Sánchez, announced yesterday (Tuesday) that the minimum interprofessional salary (SMI) in Spain, which includes the Canary Islands, will increase by 8% in 2023 to reach 1,080 euros gross per month based on 14 payments per year, 12 monthly payments and traditionally two extras at Christmas and in August.

He confirmed this during his appearance in the Senate to report on the measures adopted by the government to deal with the economic and social consequences of the war in Ukraine and the effects of the rise in inflation.

The minimum wage is worked out differently in Spain than in the UK, as a minimum hourly rate is only established for domestic workers, so SMI per hour is not mentioned for the rest of employees, it is per month or year.

The minimum salary in Spain always refers to the gross salary of workers based on a 40 hour per week contract, and the €1,080 is for 14 payments per year. This means that the minimum gross salary will be €1,260 gross per month, as the total is multiplied by 14 payments to get an annual figure (€15,120) and then divided by 12.

This minimum is also used to calculate minimum wage on part-time contracts which are easily worked out pro-rata, so a 20 hour a week is 50% of this figure (€630 per month) and so on.

There are some deductions to come off this figure which can amount to around 6.5% for transport, and social security retention (IRPF), but the latter only applies to the calculation of 12 of the 14 payments.