Raising Spain's minimum wage in line with CPI would imply extra cost of 1.72 billion euros for companies
The government has set itself the limit of raising it to at least the same level as price rises, while the Spanish confederation of businesses proposes 1.5% and the unions 7.5%
The new increase in the minimum wage (SMI) in Spain, received by 2.5 million workers, for 2026 remains a question mark. The Government has not yet released the report drawn up by the commission of experts that will set the path for the rise, but what is certain is that the SMI will rise at least as much as the rise in inflation, as this is the limit that the Ministry of Labour has set. According to the government, the SMI should be at 60% of the average net wage.
Therefore, the increase is not expected to be less than 3%, in line with the CPI in November and with the rise in pensions (2.7%), which would imply an extra cost for companies of 1.72 billion euros, taking into account that each additional point has a direct gross cost of 575 million euros, according to estimates of the Spanish confederation of businesses (CEOE).
This economic effort will be borne by the smallest companies, SMEs and micro-SMEs, which is where most of the workers with minimum wage are concentrated. It will also directly affect very specific sectors, such as the primary sector (fishing, agriculture and livestock), the domestic sector (which directly charges housholds), as well as other sectors that have a higher number of people that receive the SMI, such as gardening activities, private security, cleaning, care for dependents, domestic help, etc.
In other words, the rise in the SMI will affect the most vulnerable sectors that have already had to lay off people due to the escalation of labour costs, according to CEOE.
Almost 1,000 euros difference
CEOE is open to a 1.5% increase in the minimum wage next year, which, it argues, is "not small". According to the confederation, taking as a reference the average wages of the latest labour force survey (EPA) with data from 2024, the current minimum wage is already 4.9% above 60% of the average wage, which is where the government wants to place it.
Against the minimum wage of 1,202 euros gross per month over 14 payments, with taxes paid by the employer, the unions are demanding a 7.5% increase to raise it to 1,273 euros per month, which also implies that these workers will have to pay taxes to the treasury for the first time. This represents a difference of almost 1,000 per year.
Secretary general of the CC OO trade union Unai Sordo described the CEOE's proposal as "ridiculous" and called on the government to opt for a "forceful increase", accompanied by a modification of the regulations that govern it in order to "avoid reducing bonuses and allowances that many companies use in order not to increase wages".
