La increase in the Interprofessional Minimum Wage (SMI) of 2026 It has become one of the central economic debates of the beginning of the year. The minimum wage has started in January. frozen at 1.184 euros gross per month in 14 payments, the same amount as in 2025, while the Government finalizes with employers and unions what the definitive increase will be and how it will be applied.
The conversations between the Ministry of Labor, social agents and the expert committee They revolve around two main issues: the percentage of the Minimum wage increase in 2026 and if this salary will start to pay income tax or will remain exempt. All of this, with a view to the minimum wage reaching the 60% of the average salary, as established by European Social Charter.
How 2026 begins: extension of the minimum wage and retroactive effects
For the time being, the Government has opted to extend the current amount of the minimum wageThe pension, set at €1.184 per month in 14 payments, was extended by royal decree while a new agreement is being finalized. According to the government, the extension... does not prevent the approval of a new reference for 2026, but it serves to avoid legal loopholes and ensure the continuity of contribution bases.
Once the new royal decree on the increase is approved, the increase will be applied with retroactive effect from January 1, 2026This means that companies will have to adjust payrolls and pay the differences in the first month in which it is possible, usually in the February payroll, including arrears since the beginning of the year.
The extension also has an impact on the Social security: The minimum contribution bases They will be automatically updated by the same percentage as the minimum wage is revised (increased by one-sixth), while the maximum quotation limit It is around 5.101 euros per month. The new contribution rate also applies. Intergenerational Equity Mechanism and additional solidarity contribution on salaries that exceed that maximum limit.
In the case of self-employedUntil the new amount comes into effect, contributions will continue to be governed by the contribution tables in force in 2025, although the maximum contribution base for some brackets will be adjusted to the new upper limit. This is all without prejudice to subsequent updates once the final increase in the minimum wage is known.
Political and social negotiation: meetings, delays and opposing positions
The formal negotiation for the 2026 minimum wage increase It opened with an initial meeting in mid-December, in which the Minister of Labor, Yolanda DÃaz, sat down with CCOO, UGT, CEOE and Cepyme without yet bringing a final proposal to the table. That meeting served to compare positions, but It ended without an agreement. nor concrete figures, leaving the decision for after the holidays.
Following this first failed attempt, the Ministry of Labor has called new meetings for the beginning of January, with the aim of finally presenting a numerical proposal based on the report of expert committeeDÃaz's department intends to finalize the negotiation in the first weeks of the year, although it wouldn't be the first time the final agreement has been delayed until later. mid-January or even February, as has already happened in the last three years.
In this process, the TreasuryBecause their decision will determine whether the minimum wage becomes subject to income tax or remains exempt. In December, the Ministry of Labor still did not have an official position from the Treasury, which prevented a definitive scenario from being established at the first meeting with social partners.
Recent experience suggests that the Government could end up reaching an agreement only with the unionsSomething that has been repeated in recent years. The last time that CEOE and Cepyme The last time employers supported an increase in the minimum wage was in 2020, when it went from 900 to 950 euros per month; since then, increases have been agreed without the support of employers.
What the committee of experts proposes: two scenarios for the minimum wage in 2026
The technical starting point for the negotiation is the report of expert committee, created in 2021 to design the path that will allow the SMI to represent the 60% of the average salary in Spain. By 2026, this group has proposed two possible increases depending on whether the minimum wage remains exempt from income tax or whether it begins to be taxed.
In the first scenario, if the minimum wage continues exempt from taxationExperts recommend a del% increase 3,1With this increase, the minimum wage would be around 1.221 euros per month in 14 payments, which represents an increase of about 37 per month compared to the current 1.184 euros.
In the second scenario, if it is decided that the SMI I will be taxed under the Personal Income Tax (IRPF).The commission proposes a increase of 4,7%In that case, the amount would rise to approximately 1.240 per month in 14 payments, that is, about 56 euros more per monthThis alternative partially offsets the additional tax burden while maintaining the path towards approaching 60% of the average salary.
The government has hinted that the starting position could be closer to 3,1% scenarioespecially since the Ministry of Labor argues that the minimum wage should remain exempt from income tax and the Treasury is studying adjust the deductions existing measures to ensure that those earning the minimum wage do not lose purchasing power in their tax return.
Union and employer demands: from 7,5% to 1,5%
While the government relies on the experts' report, the unions and patronal They have presented their own proposals, which show a wide gap in terms of the percentage increase and the design of the new minimum wage.
On one hand, CCOO and UGT They demand that the minimum wage start paying taxes and propose a initial increase of 7,5%With this increase, the gross minimum wage would reach approximately 1.273 per month in 14 payments. After applying income tax, the unions estimate that the net improvement would be around 2,7%, with a final salary close to 1.216 euros net a month.
Furthermore, the CEOE and Cepyme They are opting for a much more restrained review, up to a 1,5%which would place the minimum wage at around 1.202 euros gross per month in 14 payments. The employers' association argues that this update is in line with the agreed raises for public employees and with a restrictive interpretation of the reference to the European Social Charter.
Furthermore, business organizations insist that any increase must strictly respect the absorption and compensation rules of the Workers' Statute, allowing companies to offset the minimum wage increase with certain salary supplements. This condition has become one of the main sticking points in the negotiations.
In terms of the timeline, the unions have expressed their willingness to close a deal before January 15Although they have shown flexibility regarding their initial proposal of 7,5%, provided that the final result remains within the range proposed by experts and takes into account the evolution of inflation.
The main focus of the conflict: the reform of the absorption system and bonuses
Although headlines often focus on the percentage increase, much of the tension centers on a more technical but equally relevant issue: the reform of the absorption and compensation rules of salary supplements. That is, how it is permitted or limited that the seniority bonuses, night shift bonuses, productivity bonuses or holiday bonuses are used to effectively neutralize the rise in the minimum wage.
El Ministry of Labor, aligned with CCOO and UGT, wants to modify the regulations for to protect the minimum wage and to prevent certain supplements from absorbing the entire increase. The goal is for the minimum wage increase to truly be felt in the pockets of those who receive it, and not be diluted by internal payroll adjustments.
La patronal He flatly rejects this proposal. The president of the CEOE, Antonio Garamendi, has warned that, if the absorption of bonuses is limited, the business confederation is prepared to go to courtIn his opinion, changing these rules could lead to effective increases far exceeding those agreed upon, of up to a 20% or 25% in certain cases, and could break many collective agreements for generating disparate salary structures within the workforce.
The reform of the absorption process is also linked to the transposition of the European directive on minimum wages to the Spanish legal system. The Ministry of Labor intends to use this process to strengthen the guarantees for those earning the minimum wage, while business organizations are asking to maintain the current system to preserve what they consider legal certainty and negotiating flexibility.
Impact on the self-employed, companies and retroactive effects
The 2026 minimum wage increase not only affects salaried workers; it also has direct consequences for self-employed and small businesses that have contracted staff. Once the new amount is approved, these employers will have to update payrolls retroactively from January 1st, including salary differences in the February payroll or the next one issued.
In practice, this means that the self-employed with salaried employees Organizations will have to adjust their labor costs from the first day of the year, even if the formal approval of the new minimum wage comes later. Those that fail to implement the update will have to pay the outstanding amounts later, with the added risk of potential claims and penalties if the situation is not rectified.
At the level of quotationsThe increase in the minimum wage also implies an adjustment of the minimum contribution bases to Social Security. In addition to the increase linked to the minimum wage, in 2026 the application of the Intergenerational Equity Mechanism and the additional solidarity contribution Regarding salaries that exceed the maximum limit, measures included in the latest reforms of the system.
The companies that benefit from certain public aid They are also subject to additional conditions: in some cases, increased energy costs It cannot be used as an objective cause for dismissal during 2026, under the threat of having to return the aid received if these clauses are breached.
Recent evolution of the minimum wage and wage concentration
The strong growth rate of the minimum wage in recent years explains some of the sensitivity of the current debate. Since 2018, when it stood at around 735,90 euros gross per monthUntil the 1.184 euros from 2025the minimum wage has increased by approximately 61%This boost has significantly increased the pay of those at the bottom of the salary scale.
La committee of experts He pointed out that this progress has contributed to concentrating a growing number of workers in one narrow salary band around the minimum wageAccording to their analysis, more and more people with a average qualification or experience They fall within that range, which could be causing a loss of salary differentiation between professional profiles.
The data Salary Structure Survey They suggest that a large proportion of low-wage workers have been moving towards the lower end of the income bracket. 15.000 to 16.000 euros gross per yearThis is partly due to the increase in the minimum wage. Employers, for their part, question this statistic and prefer to use the Active Population Survey, with which he argues that the minimum wage has already exceeded 60% of the average salarywhich, in his opinion, would leave a limited margin for further revaluations.
This disagreement over which indicator to use to measure average wages is one of the underlying factors that explains why unions and employers They come to the table with such different diagnoses about the appropriate level of the minimum wage and about the need to continue promoting it in the coming years.
Domestic workers and part-time contracts: how the price increase affects them
The 2026 review of the minimum wage is also key for groups such as Household employees and people with part-time contractsIn your case, the remuneration is calculated in a proportional to a full 40-hour work weekso that any increase in the minimum wage is passed on to the part-time wage tables and the hourly rate.
Taking as a reference the ranges of increases that are being considered, if the minimum wage were to be between 1.221 and 1.240 euros Monthly salaries paid in 14 installments; part-time salaries would be adjusted accordingly. For example, a workday of 20 hours per week would be around 610-620 euros gross per month, while one of 10h would be around 305-310 eurosalways with extra payments prorated according to the type of contract.
In the case of domestic workers paid by the hour, a reference is maintained minimum price per hour worked This includes vacation pay and bonuses. This amount is also affected by the increase in the minimum wage, so those who work a few hours a week in private homes should check that the new amount respects the legal threshold.
If, after the approval of the new minimum wage, a person with a part-time or domestic contract observes that their total remuneration (including supplements) does not reach the proportional minimum amountthe company or domestic employer will be obliged to raise salaryOtherwise, the difference can be claimed retroactively from January 1st.
The ways to demand compliance involve a friendly claim Firstly, and if that doesn't work, then by presenting a conciliation ballot and, ultimately, through the complaint filed with the Work inspectionThe general deadline for requesting the amounts owed is one year from the date on which payments ceased.
With the 2026 minimum wage still pending a final figure but with a very narrow range, the debate revolves around a moderate increase in line with 3,1%-4,7% recommended by experts and the positions furthest from 7,5% union and the 1,5% businessMeanwhile, the real battle is being fought over how the increase will be implemented in practice, what leeway companies will have to absorb it through bonuses, and whether or not the minimum wage will become subject to income tax. What is already clear is that, once the agreement is finalized, the new amount will be applied retroactively to January 1st and will affect not only the salaries of those earning the minimum wage, but also a wide range of social security contributions, collective bargaining agreements, and benefits that use the minimum wage as a benchmark.
