So ive been following the "increase" in our wages.

i know it wont affect many people here, but there are some "employees" on the minimum wage here apart from me, i thought it would be interesting.

so the new wage increase brings the SMI for 2026 to € 17,094 / year, or €1,221 a month (14 payments), or €1,424,50 in 12.

(it was €1,381 last year, in 12 payments, so its an increase of €43,50)

its always been the case, such as myself, that "a declaration of renta is not obligatory if you earn 22,000 or less from one source". (says the hacienda website) so i´ve never done a decleration.

now with the new increase there is also a caveat. "if you "only" earn €17,094 you are extent from irpf. Great! you think...

but the way they are doing it.. you still pay it from the wages each month.. but then you claim it back on the decleration at the end of the year...

So now everyone has to do a decleration de la renta to get their 600 euros back ! a cheeky loophole to get everyone to declare and stuff, no?

Sounds like it....will leave it to Fred - our forum tax expert (IMO)

https://spanishnewstoday.com/spain_3...0261624-a.html

Use a calculator to see if you have to pay more or get a return and if you would have to pay more you don't declare. Maybe your autonomous region has tax credits for certain things as well. To be honest there's nothing to be afraid of when you do a tax declaration, for those people who are of working age in Spain with a Spanish bank account without anything in the UK it's automatically filled in anyway.

The AEAT's Renta Web Open tax simulator has been live on their site for a couple of weeks now, it's a useful tool to check how much tax you'd have to pay and have a trial run at completing your own tax return - which, as you say, isn't complicated if your financial affairs are simple.

Agencia Tributaria: Simuladores

People earning the minimum wage are being protected quite well, I think, as the allowance for low earnings has been increased in line with rises to the SMI for a number of years now, ensuring that they pay no income tax. However, fiscal drag is affecting people who don't earn a fortune but do earn just above the threshold of eligibility for the low income allowance, as once that is exceeded they only get the basic allowances (unless they have children or responsibility for dependent relatives) and those haven't changed for many years.

Isn’t the tax simulator still on tax year 2024 or did I miss something?

No, well spotted! I'd read an article somewhere or other a few days ago saying it was now available but that was obviously wrong. It appears the new one won't be available until about mid March.

https://www.finect.com/usuario/david...sta-disponible

I also came across this recently…


Translated to English (further details in the BOE https://www.boe.es/eli/es/l/2025/07/24/5 )

Reading elsewhere it appears it is really for work related income and not pensions

In Spanish income tax law pension income is no different from earnings income - same box in the declaration and these lower income deductions apply to both. There have been special low income allowances for some years now and the bands get adjusted every so often.

Its pitiful that the UK cannot introduce something similar to avoid people with only the UK state pension getting trapped into income tax. Even a simple age allowance like we have in Spain would solve that, but as we all know Reeves is an imbecile.

Yes my sister (79 years old) has been complaining about getting involved with tax again, and I was thinking, why not increase the tax allowances based on age to release the
pensioners from paying - how hard can it be!

AS you say, Fred 'pitiful'

The UK has extended the freeze on tax thresholds until 2031. In the 2027 tax year with the triple lock the standard new state pension will pass the tax free threshold. The chancellor has decided those only on State pension with no additions will not pay tax on state pension over the threshold. However those with any additional income will pay tax on state pension over the threshold. That is those with other pensions it also includes those on the old lower state pension if they have Serps that takes their pension over the tax threshold , they class serps as additional to state pension so will be taxed. For me there is a simple and fair way of dealing with this. That is once the.new state pension passes the tax threshold then the tax threshold tracks the new state pension. That benefits all pensioners and those on lower income. I would also think it is a simpler solution to administer.

Speaking as a pensioner, I can't see the justification for those whose income is derived from pensions (from whatever source) to be taxed less on said income if people of working age are being taxed if they receive exactly the same amount. The UK state pension has only exceeded the personal allowance because pensioners have been protected by the triple lock and they should think themselves lucky they still have that. The increase I'll be getting on my state pension in April is higher than the ones I'll be receiving on my pensions from employment because they are only based on inflation. Pensioners get a lot of discounts or even free things which people of working age have to pay in full for, and the majority of them aren't affected by the massive rise in property prices and rents in comparison to salaries which younger people are having to struggle with - except to moan that their children might have to pay IHT on the huge increase in the value of their homes. And no, that isn't on money that had already been taxed as many of them bleat, it is a capital gain on which they have not had to pay CGT. People of working age also have more expenses like travel to work costs, work clothing if uniforms aren't supplied, professional fees/subscriptions, and of course they are still paying NI/social security contributions. The pensions they can look forward to when they reach retirement age will be nowhere near as generous as those my generation and older enjoyed, and they have to pay higher pension contributions to get them.

I agree that income is income and by the threshold tracking the basic new state pension that would treat all the same. What I don't think is right is that one set of pensioner is being treated differently to other pensioners . It makes no difference the chancellor has decided

Yes, I absolutely agree with that, the two-tier state pension system was a very bad idea (and not one for which Labour was responsible).

Ian Duncan Smith was the mastermind behind it. He made it sound like all pensioners would be better off until the new pension came in and then we found out that those with any private pension would not get the full new pension due opting out which never affected the old state pension. Smoke and mirrors governments are masters at it.

Considering how low the UK state pension is, yes I think should be tax free for those that are on a low income overall. Pensioners have less options to earn extra income because of age discrimination or physical ability.