The national minimum wage (SMI) is the minimum amount a worker must be paid for carrying out their work over a specified period. The SMI is set each year by the Government, following consultation with the social partners, taking into account various factors such as the cost of living, productivity, employment and economic growth.
In this article, we are going to analyse the increase in the national minimum wage for 2024, which represents a 5% increase on the previous year, and its implications for the various sectors and groups. Read on!
Extension of the national minimum wage of 1,080 euros
On 6 February 2024, the Government approved the Royal Decree 145/20241, which sets the national minimum wage for 2024 at 1,134 euros per month in 14 payments, or, to put it another way, 39.90 euros per day or 6.25 euros per hour actually worked.
If you’re wondering, this increase amounts to an extra 54 euros a month, or 756 euros a year, on top of the 2023 minimum wage, which had been set at 1,080 euros a month in 14 instalments.
Does the increase in the minimum wage for 2024 apply retrospectively? The answer is yes, with effect from 1 January 2024. This means that workers on the minimum wage must be paid the difference for the months of January and February in their next payroll. It is also important to note that the personal income tax allowance has been increased to ensure that people on the minimum wage do not have to pay tax on their earnings.
People who will benefit from the 2024 minimum wage increase
According to the Labour Statistics Bulletin from the Ministry of Labour and the Social Economy, the increase in the minimum wage By 2024, it will benefit more than 2.5 million people, equivalent to one in seven wage earners in Spain. Of these people, a third are women and young people, who are the groups most affected by job insecurity and the pay gap.
The increase in the minimum wage will also have a positive impact on the people receiving social security benefits linked to the minimum wage, such as unemployment benefit, the minimum living wage, non-contributory pensions and child benefit. Furthermore, the increase in the minimum wage will lead to an improvement in working conditions people working in sectors such as retail, the hospitality industry, the agri-food sector and domestic work.
Changes in the minimum wage in recent years
This isn't the first increase in the national minimum wage in Spain in recent years. In particular, 2019 saw a record increase of 22.3%, rising from 735.90 euros per month (paid in 14 instalments) to 900 euros. In 2020, the SMI rose by 5.5% to 950 euros per month, paid in 14 instalments. Meanwhile, in 2021, the SMI remained at 950 euros, due to the uncertainty caused by the pandemic.
By 2022, the minimum wage had risen by 13.6% to 1,080 euros per month, paid in 14 instalments. And in 2024, the minimum wage has been set at 1,134 euros per month, paid in 14 instalments, which is 5% more than the previous year.
Can you pay me less than the minimum wage?
An important point: the increase in the national minimum wage for 2024 is mandatory compliance for all employers and workers, regardless of sector, activity, company size, type of contract, working hours or professional category. Therefore, no one may pay or receive less than the statutory minimum wage, except in the case of an internship or training contract, which are subject to special conditions.
Any irregularity in this regard may be challenged, either through informal means or through the courts. Furthermore, the matter may be reported to the Labour and Social Security Inspectorate. The time limit for challenging or reporting non-payment of the minimum wage is one year from the date on which the incident occurred.
Payroll for 2024 following the extension of the 2023 minimum wage
As we explained earlier, the increase in the national minimum wage for 2024 It has retroactive effect from 1 January. How will this affect your payroll? Let us explain.
In March, those on the minimum wage will receive a gross total of 1,188 euros in 14 instalments, broken down as follows:
- 1,134 euros, corresponding to the minimum wage for March.
- 54 euros, representing the difference in the minimum wage for January.
- 54 euros, representing the difference in the minimum wage for February.
From this amount, the following must be deducted: quotes Social Security contributions and income tax, where applicable. If the employee is not liable for income tax, the net pay will be 1,035.67 euros, broken down as follows:
- 991.67 euros, corresponding to the minimum wage for March.
- 22 euros, representing the difference in the minimum wage for January.
- 22 euros, representing the difference in the minimum wage for February.
From April onwards, the gross salary will be 1,134 euros and the net salary 991.67 euros, provided that no personal income tax is payable. These amounts may vary depending on each employee’s personal and employment circumstances.
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