Already published in the BOE and will apply to the 2025 tax return (filed in 2026).
What is this allowance?
It’s a deduction from the final IRPF (Personal Income Tax) amount — up to €340.
It’s intended for low-income workers to offset the effect of the increase in the SMI (minimum wage), which caused many to become taxpayers for the first time.
Who is eligible?
Those whose earned income (including in-kind compensation) does not exceed €18,276 per year.
And who do not have other types of income (rental income, interest, etc.) above €6,500 per year (excluding tax-exempt income).
How does it work?
If you earn the SMI or less (€16,576 in 2025), you receive the full amount: €340.
If your income is between the SMI and €18,276, the amount decreases gradually by €0.20 for each euro over the SMI.
If your income exceeds €18,276 — the deduction doesn’t apply.
Important:
The deduction is applied once a year — in the IRPF tax return, not in your monthly paycheck.
Even if you didn’t work the whole year or had multiple employers, you can still apply the allowance — as long as your annual income meets the criteria.
Example:
Earned €17,000 → partial deduction
Earned €16,000 → full deduction: €340
Earned €19,000 → not applicable
Is the tax return mandatory?
Yes, filing the tax return is still required — but with this deduction you may:
not owe any tax,
or even get a refund of taxes previously withheld.
What is this allowance?
It’s a deduction from the final IRPF (Personal Income Tax) amount — up to €340.
It’s intended for low-income workers to offset the effect of the increase in the SMI (minimum wage), which caused many to become taxpayers for the first time.
Who is eligible?
Those whose earned income (including in-kind compensation) does not exceed €18,276 per year.
And who do not have other types of income (rental income, interest, etc.) above €6,500 per year (excluding tax-exempt income).
How does it work?
If you earn the SMI or less (€16,576 in 2025), you receive the full amount: €340.
If your income is between the SMI and €18,276, the amount decreases gradually by €0.20 for each euro over the SMI.
If your income exceeds €18,276 — the deduction doesn’t apply.
Important:
The deduction is applied once a year — in the IRPF tax return, not in your monthly paycheck.
Even if you didn’t work the whole year or had multiple employers, you can still apply the allowance — as long as your annual income meets the criteria.
Example:
Earned €17,000 → partial deduction
Earned €16,000 → full deduction: €340
Earned €19,000 → not applicable
Is the tax return mandatory?
Yes, filing the tax return is still required — but with this deduction you may:
not owe any tax,
or even get a refund of taxes previously withheld.
