Spain's Minimum Wage (SMI) 2026: Amount, How It Is Set and Payroll Impact
What the Spanish minimum wage is
The Interprofessional Minimum Wage (SMI) is the lowest pay that, by law, any employee in Spain must receive for a full legal working day, regardless of sector, contract type or applicable collective agreement. Its purpose is to guarantee a decent pay floor and prevent precarious employment.
How the SMI is set
The SMI is set by the Government through a Royal Decree, after consulting the most representative trade unions and employer organisations, under Article 27 of the Workers Statute. To determine the amount, the Government weighs the consumer price index, average national productivity, the rising share of labour in national income and the general economic situation.
The SMI is expressed per day and per month and is guaranteed for the full legal working day; any reduction in hours leads to a proportional proration.
Who it affects
- All salaried employees, including temporary and seasonal staff, as well as domestic workers.
- Workers under a collective agreement: the SMI acts as an absolute minimum, and no agreement may set lower pay tables.
- Part-time contracts, where the amount is prorated according to the hours actually worked.
Impact on payroll
The SMI is an annual figure usually split into 14 payments (12 monthly salaries plus two extra payments) or into 12 payments with the extras prorated. Keep in mind that the SMI refers to gross salary before deducting Social Security contributions and personal income tax (IRPF). A rise in the SMI can raise the minimum contribution bases and therefore the total labour cost for the company.
Proration for part-time work
In a part-time contract, the SMI is calculated in proportion to the working day. For example, a contract for 50% of the day entitles the worker to half of the monthly SMI. The contract must clearly state the number of hours, and the time record must prove the actual working day, an obligation arising from Royal Decree-law 8/2019 and Article 34.9 of the Workers Statute.
Link with collective agreements
Agreements may improve the SMI but never worsen it. When a collective agreement pay table falls below the new SMI, companies must apply absorption and offsetting while always respecting the legal minimum. Reviewing the tables after each increase avoids claims and penalties.
Recommendations for employers
- Update payroll the same month the new SMI takes effect.
- Review which salary supplements can be absorbed and which cannot.
- Recalculate contribution bases and the company cost.
- Check proration in part-time and permanent-seasonal contracts.
With RegulaKit you keep time tracking, absences and labour documentation up to date to adapt to each SMI update. To estimate the financial risk of non-compliance, try our penalty calculator.
Frequently Asked Questions
Who approves the SMI each year?
The Government, through a Royal Decree, after consulting unions and employer organisations under Article 27 of the Workers Statute.
Is the SMI gross or net?
It is a gross annual figure, before deducting Social Security contributions and personal income tax (IRPF).
How does the SMI apply to a part-time contract?
It is prorated in proportion to the working day; a 50% contract entitles the worker to half of the monthly SMI.
Can a collective agreement set pay below the SMI?
No. The SMI is an absolute minimum, and no agreement may set tables below that amount.
Does an SMI increase raise the cost for the company?
Yes, because it raises the minimum contribution bases and therefore the total labour cost on top of salary.