Minimum Wage in Spain 2025 Updated Figures and Rules

For international residents and workers, understanding the minimum wage Spain policy helps set realistic expectations. Each year, the government recalibrates this figure, reflecting economic ambitions and setting the tone for living standards across the country.

The latest update for 2025 continues a trend of increases, directly impacting millions. This guide breaks down the new minimum wage rates Spain has set. We’ll also explain the rules for workers and employers, and explore what these changes mean for you.

Overview of minimum wage in Spain

The Spain minimum wage 2025, known officially as the Salario Minimo Interprofesional (SMI), is a fundamental pillar of the country’s worker protection framework. Established by the Spanish government, the SMI sets the legal floor for pay. Hence, it ensures every employee receives fair compensation for their labour.

Note that it is revised annually, with adjustments based on a complex interplay of economic factors. That includes:

• Inflation
• General cost of living
• Productivity
• Broader employment trends

Its primary legal purpose is to guarantee a basic standard of living for all workers and to reduce wage inequality. For anyone working or planning to work in Spain, the SMI is a critical benchmark. It helps in evaluating job offers, planning finances, and understanding one’s rights within the labour law system.

While the national minimum wage in Spain provides a baseline, it’s important to know that many industries operate under collective bargaining agreements (convenios colectivos). These often set higher sector-specific minimum wages. This system ensures that wage standards can be tailored to the unique economic realities of different professions.

Minimum wage updates for 2025: Figures and rules

In February 2025, the Spanish Council of Ministers officially approved a 4.4% increase in the SMI, a rise of €50 per month. This decision, backed by major trade unions, was implemented with retroactive effect from 1 January 2025. This means employers must adjust payroll to compensate employees for any shortfall since the start of the year.

Do you need help making sure your payroll systems can handle such legitimate changes correctly and on time? Our Spain payroll can help you manage back-pay calculations, and ensure full compliance with the latest wage laws.

The new minimum wage rates in Spain are structured around the common Spanish practice of 14 annual payments. This includes 12 monthly salaries and two extra payments, often referred to as summer and Christmas bonuses. Some employers, particularly multinational companies, may choose to prorate these extra payments into 12 larger monthly sums.

The table below outlines the key figures for the Spanish minimum wage 2025:

Special rates also apply for specific worker categories. For example, domestic workers are entitled to a minimum of €9.23 per hour, while temporary workers hired for periods not exceeding 120 days must receive at least €56.08 per day.

Alongside the wage increase, other regulatory changes are shaping the work environment in 2025. The government has announced plans to reduce the standard workweek from 40 hours to 37.5 hours, a major shift aimed at improving work-life balance.

Furthermore, a new mandate for digital time tracking for all companies is in effect. That’s designed to ensure transparency and compliance with working hour regulations. In practice, it should reduce disputes over overtime and attendance.

Impact on workers and employers

The rise in the SMI has a direct and meaningful impact on both the workforce and the business community. It creates a mix of benefits and new considerations.

For workers

• Boost to purchasing power: With the SMI raised to €1,184/month (14 payments) in 2025, low-wage workers enjoy more disposable income. This helps cover costs like rent, food and transport. For many, this increase eases financial pressure, especially in regions with higher living costs. Part-time jobs benefit too, though gains scale with hours worked.
• Narrowing gender and age gaps: Women, young people (16-25) and temporary contract workers are overrepresented among those earning the minimum. Hence, the wage rise directly lifts their income base. It helps to reduce gender pay and age-based wage inequality. This also strengthens career entry for youth who often begin at or near the SMI.
• Improved social protection and benefits base: SMI determines the base for social security, pensions, and unemployment benefits. When that floor rises, the social contributions of low-income workers increase. This results in better future aggregate pension and unemployment entitlements. Even if net pay isn’t hugely larger, long-term social protection improves.
• Retroactive pay adjustments: The 2025 minimum wage increase is retroactive to 1st of January 2025. Therefore, workers must receive back pay for months worked under lower pay. This may involve administrative processes, but it legally ensures workers don’t lose income due to the timing of the law’s approval.
• Stronger bargaining leverage: As SMI rises, collective bargaining bodies often use this as a baseline reference. Hence, workers gain greater negotiating power for wages, bonuses or contracts.

For employers

Employers in Spain must absorb a rise in labour costs due to the increased minimum wage. Businesses with many minimum-wage workers face tighter margins. That’s unless they:

• Raise their prices
• Reduce non-essential expenses
• Improve operational efficiency

It will especially apply to industries such as hospitality, agriculture, and retail. Furthermore, collective bargaining agreements must be updated, and payroll systems adjusted. This is to ensure no worker is underpaid, including paying back-pay for earlier months in 2025.

Additionally, smaller firms are particularly vulnerable, since there are fewer resources to absorb cost increases. It leads to a greater risk of reduced hiring or shifting to part-time or temporary contracts.

Finally, some employers may also see legal and compliance costs rise, with increased scrutiny from labour inspectors. Yet there is opportunity, since paying fair wages may:

• Improve staff satisfaction
• Reduce turnover
• Help employer’s reputation
• Attract more committed employees

Regional differences and exceptions in Spain

While the SMI is a nationally mandated figure, the economic reality for workers can look quite different depending on where they live. This is where understanding the distinction between the minimum wage and the Spain living wage becomes critical.

Living wage in Spain

The Spain living wage is the income needed to cover basic costs like housing, food, and transportation in a specific location. It often exceeds the national minimum wage, particularly in urban centres.

In fact, recent estimates suggest a net monthly living wage in cities like Madrid or Barcelona ranges from €1,400 to €1,600, which is higher than the net amount a minimum wage worker typically takes home (usually between €1,080 and €1,170).

Regional differences

Regional economic disparities are also evident in the distribution of minimum wage workers. In absolute terms, autonomous communities like Andalusia, Madrid, Catalonia, and Valencia have the highest number of beneficiaries of the SMI increase.

However, when looking at the proportion of the workforce affected, regions like Extremadura, the Canary Islands, Murcia, and Andalusia have the highest percentage of workers earning the minimum wage. This highlights the varying economic strength across the country.

Notable exceptions

The most significant exceptions to the standard SMI come from collective bargaining agreements (CBAs). These agreements are negotiated between employer associations and trade unions at the industry or regional level. They can set higher minimum wages for specific industries.

For instance, national CBAs in the construction industry may set entry-level wages above €1,500 per month. Furthermore, in tourism-heavy regions like the Balearic Islands or Catalonia, seasonal demand often leads to local agreements that push wages above the national minimum.

Therefore, a worker’s actual minimum pay is determined by the national SMI or the relevant CBA, whichever is more favourable to the employee. Our umbrella company in Spain service can help professionals and businesses understand the relevant CBA for their industry.

Future trends in Spain’s minimum wage policy

Spain’s approach to the minimum wage is not static, but part of a longer-term vision for the economy and social equity. Here are the key trends to consider:

• Standard work-week reduction to 37.5 hours without loss of pay: Spain plans to reduce the legal full-time work-week from 40 to 37.5 hours by the end of 2025. This would benefit around 12.5 million workers, especially in retail, construction, hospitality and manufacturing.
• Stronger enforcement of digital time-recording and “right to disconnect”: As hours are adjusted, Spain intends to tighten rules on tracking work time via digital tools. This ensures workers are not expected to be always online outside working hours. The right to disconnect is part of draft legislation. These measures address overtime abuses and mental health risks.
• Linking minimum wage increases more directly to inflation or cost-of-living: There’s growing pressure to tie future minimum wage Spain adjustments more closely to inflation or living cost indices. That would provide more predictable rises rather than sporadic negotiations. It helps workers avoid losing ground in real terms as prices for housing, energy and food rise.
• Reduction in temporary contracts and promoting stable employment: Policy proposals include limiting or restricting the use of short-term or temporary contracts. These currently cover many minimum wage earners. The aim is to shift more people into permanent contracts.
• Enhanced social security contribution reforms for higher earners: Another future trend involves changes to social security contributions. More specifically, “solidarity contributions” from high-income workers and companies. This might free up fiscal space for raising lower wages or social welfare supports.

Final thoughts

In summary, Spain’s updated minimum wage for 2025 raises the stakes for employers. Higher legal wages, back-pay obligations, tighter compliance risk, and rising administrative burdens. For both businesses and HR professionals, this means payroll, contracts, and perks must be aligned with the new minimum wage rates in Spain to avoid penalties.

If you’re managing employees or planning to hire in Spain but want to avoid setting up your own legal entity, partnering with our Employer of Record (EOR) service is the smart move. We’ll handle contracts, payroll, taxes, social security, and ensure full compliance with Spanish salary regulations and labour law.

Whether you’re a company expanding into Spain or a professional wanting to focus on core work, talk to an expert to get started.

Frequently asked questions

What is the monthly minimum wage in Spain for 2025?

The gross monthly minimum wage in Spain for 2025 is €1,184, when paid in the traditional 14 installments over the year. If the annual sum of €16,576 is distributed in 12 prorated payments, the gross monthly amount becomes €1,381.

How does the Spanish minimum wage compare to other European countries?

With a monthly minimum wage of €1,184 (14 payments), Spain holds a mid-tier position within the European Union. It ranks seventh among the 22 EU member states that have a national minimum wage.

What should I do if my employer pays me less than the minimum wage?

If you believe you are being paid less than the legal minimum, you should first seek advice from your trade union representative. You can also file a formal complaint with the Labour and Social Security Inspection (Inspeccion de Trabajo y Seguridad Social). They are responsible for investigating violations and can force your employer to pay what is owed.