Introduction of new minimum wage in Spain delayed at least until end of January

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Central government has agreed to exempt it from taxation in order to increase it in line with the CPI and will try to reach an agreement with trade unions and employers after the holidays

Lucía Palacios

Madrid

Thursday, 18 December 2025, 17:19

January will mark the sixth consecutive year with the minimum wage in Spain frozen at 1,184 euros per month. The central government has changed its plans once again and decided to delay the approval of the new minimum wage, which will finally be exempt from taxation, until the end of January or, at the latest, mid-February, as sources from the Ministry of Labour told SUR.

The reason for this delay is that second deputy PM Yolanda Díaz believes in the possibility of reaching an agreement with the employers' association, which is why she wants to fight to the end to try to achieve an elusive pact. At the first meeting of the minimum wage negotiation table held on Tuesday, the CEOE association expressed the possibility of changing its position and accepting a rise of less than 1.5%, as long as it guarantees that the possibility of compensation and absorption by other wage supplements is not modified, as the government intends to do and trade unions are demanding.

The Ministry of Labour wants to try to reach an agreement with the unions and employers as it sees some room for negotiation

It is true that a pact with the employers' association is highly unlikely, given the tensions between CEOE president Antonio Garamendi and the labour minister. Díaz, however, wants to explore this possibility through social dialogue.

Intervention by PM Pedro Sánchez

The government is also extending an olive branch to employers by ensuring that the minimum wage remains exempt from income tax next year as well, which would imply a smaller increase, in line with inflation, according to sources at La Moncloa.

However, in order for the three ministries responsible for this matter to reach an agreement, PM Pedro Sánchez had to intervene and call for unity. For this reason, on Tuesday, a three-way meeting was held to temper positions after the Ministry of Economy and the Ministry of Finance made public their "discrepancies" with the way the minimum wage was calculated by the Ministry of Labour expert committee, using a method that they consider "outdated" and therefore "invalid".

3.1% is the increase recommended by the expert committee, 36 euros more per month, free of taxes - an increase that the trade unions are prepared to accept

At this meeting, ministers Yolanda Díaz, María Jesús Montero and Carlos Cuerpo agreed that, for another year, workers who earn the minimum wage will not be subject to personal income tax and the Treasury will adapt to the new minimum wage. However, this implies that, as Cuerpo stated, the government will opt for the low range of the rise for 2026, proposed by the committee of experts: 3.1%, instead of the 4.7% that they recommend if it were to be taxed; in other words, 37 euros more instead of 56.

This is a kind of nod to employers, since they are the ones who have to assume the new increase, regardless of whether they declare personal income tax. What is more, even Díaz said that she would be willing to accept an increase slightly below 3.1%, if the employers' association joins the agreement, as long as it does not cross the threshold: increase should never be less than inflation, which seems likely to close the year at 2.7%. Unions are also willing to accept this. The foreseeable rise, with retroactive effect, could therefore be around 3%.