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Spain Sets Two Options for 2026 Minimum Wage Rise as Government Seeks Quick Decision

The Treasury says it is open to adjusting the IRPF deduction to preserve net income if the SMI becomes taxable.

Overview

  • Labour’s expert panel recommends a 3.1% increase to €1,221 if the SMI remains IRPF‑exempt, or 4.7% to €1,240 if it is taxed, to keep the floor near 60% of average pay.
  • Formal social dialogue has begun with positions far apart, as CEOE and Cepyme propose a 1.5% rise and unions CCOO and UGT demand 7.5%.
  • Economy and Treasury filed a dissent to Labour’s calculations, while Economy minister Carlos Cuerpo called the two options equivalent for purchasing power and said the decision should come before year‑end or as soon as possible.
  • Hacienda is preparing a repeat of last year’s targeted IRPF deduction so SMI earners do not lose take‑home pay and the 60% net benchmark is maintained.
  • Labour has opened a consultation to limit employers’ absorption of wage supplements when the SMI rises, a move business groups say they could challenge in court.