He Official State Gazette has published Royal Decree 126/2026, of February 18, which sets the Minimum Interprofessional Wage (SMI) for 2026 at 1,221 euros per month in 14 payments, which represents an increase in 3.1 % compared to the previous yearThe rise has retroactive effects from January 1, 2026 and it affects both companies and workers, including specific groups such as domestic workers and short-term contracts.
The 2026 Minimum Wage: Official Amounts
The new Interprofessional Minimum Wage is established at the following amounts:
- 1,221 euros per month in 14 payments
- 1,424.50 euros per month in 12 payments
- 17,094 euros per year
- 40.70 euros per day
- 9.55 euros per hour actually worked (domestic workers)
- 57.82 euros per legal day in contracts of less than 120 days
The increase represents 37 euros more per month compared to the 2025 minimum wage, that is, an additional 518 euros per year.
The new amounts come into effect the day after their publication in the BOE, but apply with effect from January 1 to December 31, 2026, which requires regularizing back pay where appropriate.
Domestic workers and short-term temporary contracts
The Royal Decree specifies the minimum amounts applicable to certain groups:
- Domestic workers on an hourly basis: They will not be able to receive less than 9.55 euros per hour actually worked.
- Fixed-term contracts of less than 120 days: The minimum wage will be 57.82 euros per legal working day.
These amounts already include the proportional part of extra payments and legal rest periods.
Will those receiving the minimum wage be subject to income tax in 2026?
Along with the Royal Decree on the Minimum Wage, the Official State Gazette (BOE) has published Royal Decree-Law 5/2026, which modifies the 61st additional provision of the Personal Income Tax Law to neutralize the taxation of those who receive the minimum wage.
With this modification:
- People with total work income below 20,048.45 euros per yearThose without other income exceeding 6,500 euros (excluding exempt income) may benefit from a specific deduction.
- The deduction will be 590.89 euros per year for those who earn up to 17,094 euros.
- For income between 17,094 and 20,048.45 euros, the deduction will be reduced progressively.
In practice, this measure prevents recipients of the minimum wage from bearing effective income tax.
The compensation and absorption rule remains in place.
One of the most debated issues in recent weeks has been the possible modification of the salary compensation and absorption system. However, Royal Decree 126/2026 maintains the current regulations.
This means that:
- If the worker's total annual salary, including bonuses, already exceeds the new annual minimum wage, the company is not obliged to increase the salary.
- The increase in the minimum wage can continue to be absorbed by existing salary supplements, provided that the annual total exceeds 17,094 euros.
Therefore, no specific prohibition on the absorption of supplements has been introduced, nor has the reference to the base salary been limited.
What should companies take into account?
Companies will need to review:
- The payrolls of workers whose annual remuneration falls below the new minimum wage.
- The correct retroactive application from January 1, 2026.
- The impact on part-time, temporary and domestic worker contracts.
- The possible regularization of arrears.
Failure to comply with the minimum wage may result in administrative penalties and wage claims.
Impact on the self-employed and SMEs
The increase in the minimum wage in 2026 particularly affects labor-intensive sectors such as retail, hospitality, agriculture, and personal services. For self-employed individuals with employees and small businesses, planning for the impact on labor costs and social security contributions is crucial.
From a fiscal point of view, the neutralization in IRPF reduces the impact on the worker, but does not eliminate the increase in business costs.
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