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The Government approves the increase in the SMI to 1,134 euros per month with effect from January 1

SMI beneficiaries will not pay taxes to the Treasury.

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The Government approves the increase in the SMI to 1,134 euros per month with effect from January 1

SMI beneficiaries will not pay taxes to the Treasury

MADRID, 6 Feb. (EUROPA PRESS) -

This Tuesday, the Council of Ministers approved the increase in the interprofessional minimum wage (SMI) for 2024 by 5%, from 1,080 euros per month for fourteen payments to 1,134 euros. This increase will be applied retroactively from January 1, 2024.

This increase in the SMI responds to the agreement reached in mid-January by the Ministry of Labor and CCOO and UGT, without the assistance of the business organizations CEOE and Cepyme, which decided not to support it because their demands to index the SMI to contracts were not met. public and establishing bonuses for the rural sector.

This increase in the SMI will benefit more than 2.5 million people, the equivalent of one in seven wage earners, of which a third will be women and young people. In fact, the typical profile of the recipient of this minimum income is a woman, young, with a temporary contract and who works in sectors such as commerce, hospitality or the agri-food sectors.

"Today Spain is a better country," said the second vice president and Minister of Labor, Yolanda Díaz, who has urged, however, to continue raising salaries in Spain to reduce the gap with European salary averages.

"Spain currently has a distance of 19 points from the European salary averages. This means that we have to make a collective effort as a country to continue increasing salaries in our country, not only the minimum wage, but the salary of the working people of Spain," Díaz defended in the press conference after the Council of Ministers.

Díaz has assured that the Government will continue raising the SMI, while the working day will be reduced. "We are going to do it by reducing the working day and, of course, without a salary reduction," the minister reiterated, after indicating that not reducing the salary while the working day is reduced is what will allow "to push salaries up." ".

Since the SMI's upward path began, this minimum income has been revalued by 54% (398 euros more), which has contributed to reducing wage poverty by 25%, according to data from the Ministry headed by Yolanda Díaz .

At the beginning of last year, the Government agreed, only with the unions, to raise the SMI by 8% by 2023. Its commitment for this legislature is to establish, by law, that this minimum income must always be equivalent to 60% of the average salary. .

The CEOE also did not join the increases in the SMI for 2022 and 2021 agreed by the Government of Pedro Sánchez with CCOO and UGT, but it did agree with them on the increase in 2020, when it increased from 900 to 950 euros per month.

As a consequence of the increase in the SMI for 2024, the Government has at the same time approved raising the minimum exemption in the Personal Income Tax (IRPF) in 2024 from 15,000 euros to 15,876 euros, a figure equivalent to the annual SMI , as detailed by the first vice president of the Government and Minister of Finance, María Jesús Montero, in the press conference after the Council of Ministers.

In this way, the minimum interprofessional salary is not subject to withholding since the exempt minimum will be the same annual amount as the SMI. Thus, affected taxpayers are prevented from having to bear withholding or payment on account.

Likewise, in order to avoid the corresponding "jump error", the measure is extended to taxpayers with net income from work of up to 19,747.5 euros per year, who will see their withholdings or payments on account reduced.

Thus, salaries close to said interprofessional minimum wage are also affected by the improvement in the reduction to be made for this purpose, since otherwise "a clear jump error" would occur and they would have to pay much higher withholdings.

According to Treasury calculations, collected by Europa Press, this increase in the exempt minimum and the reduction in salary withholding close to it will have a collection impact in terms of cash of 1,385 million euros, although given the nature of personal income tax as a partially transferred tax to the territorial administrations, it would be distributed between them and the General Administration of the State.

This regulation on the change in personal income tax withholdings, which will imply an increase in the exempt minimum, was also approved this Tuesday by the Council of Ministers.

Specifically, Montero explained that what has been done in the Council of Ministers is to modify the Personal Income Tax regulations while waiting to include the legal change in the regulation of this tax in the Budget project, all with the aim that no withholdings are made to workers that would not correspond.

"That is why we approved this modification of the Regulation, which represents a tax reduction for incomes of less than 20,000 euros and which will mean that workers who collect the SMI do not suffer any withholdings," said Montero.

The modification of the Personal Income Tax regulations raises the income without withholding to the SMI, but depending on whether the taxpayer is married or has children, the minimum exempt from withholding increases. For example, for a married taxpayer, and not legally separated, whose spouse earns income greater than 1,500 euros, excluding exempt income, with one child the minimum exempt amount will be 16,342 euros and with two or more children, 16,867 euros.

The exempt minimum for a single, widowed, divorced or legally separated taxpayer with one child will be 17,644 euros and with two or more children, 18,694 euros.

In the case of a taxpayer without children whose spouse does not obtain income exceeding 1,500 euros per year, excluding exempt income, the minimum will be 17,197 euros. If you have one child, the minimum would be 18,130 euros and if you have two or more children it will be 19,262 euros.

According to Montero's calculations, it is estimated that this modification in the Personal Tax Regulations will benefit just over 5.2 million taxpayers who will save a total of 1,385 million euros in 2024.

"This means that, of course, low and medium incomes pay and will pay less taxes with this Government than those who paid with the Popular Party," Montero defended.