At the end of September, the Government approved the increase in the interprofessional minimum wage (SMI), after the publication of Royal Decree 817/2021, of September 28, which sets the SMI for 2021. This increase was achieved after the Government's agreement with the unions, while the business association was betting first on economic recovery.
He interprofessional minimum wage establishes the minimum amount of remuneration that the worker will receive based on the legal working day. The Government regulates annually, after consultation with the most representative Trade Union Organizations and business associations, the "Interprofessional Minimum Wage", both for permanent and temporary workers, as well as for personnel serving the family home.
The last rise of the SMI It occurred in January 2020 where a salary of €950 was established in 14 payments. With the new agreement it is established a salary of €965 in 14 payments, and in 12 payments of €1,125.83 gross in the case of extras prorated monthly. In such a way that the annual SMI for one full time must reach the €13,510 gross . This measure represents a growth of 1.6% of the SMI and new reviews are planned for 2022 and 2023.
Since when does the SMI increase have to be applied?
The Government has agreed that the salary increase will take effect from On September 1, so it must be reflected from the September payrolls.
Consequences of the increase in the SMI?
Positive aspects:
- It supposes a greater purchasing power for the low income.
- Larger contribution base for working people, which results in better unemployment and retirement benefits among others.
- Increase in domestic consumption and aggregate demand due to greater purchasing power.
Negative aspect:
- Increased cost per personl for companies.
- Small business owners and the self-employed are harmed who have been very vulnerable groups during the pandemic.
- It is feared that it could paralyze job creation.
- For the self-employed The increase in the SMI represents an increase in your social security contributions to be paid and the salary of your employees, if you have them.
What minimum wage do other EU countries have?
The highest are the following:
- Luxembourg: 2,202 euros per month.
- Ireland: 1,724 euros per month.
- Netherlands: 1,685 euros per month.
- Belgium: 1,626 euros per month.
- Germany: 1,614 euros per month.
On the contrary, the countries with the lowest salaries are:
- Latvia: 500 euros per month.
- Romania: 458 euros per month.
- Hungary: 442 euros per month.
- Bulgaria: 332 euros per month.
Source: Eurostat
With the rise of the SMI, Spain seeks to comply with the commitments set by the European Commission (EC) and reduce differences with other European countries such as Germany, Belgium or France.
