The increase in the minimum wage for 2026 is very close to becoming a reality after the Government approved together with the unions (and, again, without the employers) an increase of 3.1% to leave it at 1,221 euros per month in 14 payments.
As in other years, the increase in the SMI will be applied without entailing additional taxation in personal income tax (Personal Income Tax). In fact, workers who have received the minimum wage during 2025 will have to pay attention to their Income Tax return so as not to lose money.
The reason is that, to compensate for the application of personal income tax, ordered by the Treasury, at the same time a deduction in income so that the effects of that retention would ultimately be null. But this forces taxpayers who collected the SMI to file the declaration if they want to benefit from the deduction and feel a greater impact from the increase in the minimum wage.
As explained Europa Press“eIt is recommended that minimum wage tutors present the Income Tax Return for this year and the following year. if your payroll supports income tax withholdings, since In some cases they will have the right to a refund of said amounts.“.
The maximum deduction applies to people who earned below the 2025 SMI (16,576 euros annually). In this case, the deduction is 340 euros per year in the income tax return.
From those 16,576 euros, and up to 18,276 euros, the deduction is progressively reduced. To know its amount, you must subtract from the 340 euros the result of multiplying by 0.2 the difference between the full income from work and 16,576 euros per year.
Europa Press He gives the example of returns of 17,200 euros per year. In that case, the deduction would be about 215.2 euros per year in the declaration: 624 euros, the difference between 17,200 and 16,576 euros would be multiplied by 0.2 and the result (124.8 euros) would be subtracted from the 340.
