The Spanish government will increase the minimum interprofessional wage (SMI) by 5.3% in 2027, raising it to €1,286 gross per month across fourteen payments. This decision was outlined in a draft royal decree submitted by the Ministry of Labour for public consultation.
This increase surpasses the recommendation made by the expert commission advising the Ministry of Labour, which suggested a 4.9% rise. The proposal was presented to social agents without detailed negotiations.
Public input on the draft will be accepted until 16 November, after which the Council of Ministers may approve the measure. According to the decree, the increase aims to ensure a fair and sufficient remuneration that provides workers and their families with a decent standard of living. It also seeks to maintain the goal of the SMI reaching 60% of the average wage, as stipulated by the European Social Charter.
This marks the first occasion that Labour Minister Yolanda Díaz has pushed for a wage increase without the agreement of trade unions, which had called for a 7% rise. They warned that without addressing the compensation and absorption of bonuses and supplements, they would not agree to a deal.
Business representatives have described the measure as politically motivated, suggesting it could be approved during the electoral campaign ahead of the general elections on 29 November. They have called for more time for dialogue.
The government has the authority to approve the SMI increase after consulting social agents, as the royal decree does not require approval from the Spanish Parliament. It could be enacted even if the government is in a caretaker role following the elections. Minister Díaz defended the need for the wage increase to be implemented without delay, stating that "all companies need to know the minimum wage by 1 January."
Joaquín Pérez Rey, Secretary of State for Labour, emphasised the urgency of the matter, responding to the expert report that emerged earlier that day.
Trade unions reiterated their demand for a 7% increase, citing the deviation of inflation rates for 2026 and projections for 2027. They also called for legislation to prevent the absorption of bonuses to offset the SMI increase and sought clarity on the tax implications to ensure that purchasing power is maintained.
Elma Saiz, Minister of Social Security and government spokesperson, recently confirmed that the SMI will continue to be exempt from income tax (IRPF). She stated, "We will continue our commitment to raise the SMI and ensure it remains tax-exempt," clarifying that the government will update deductions so that SMI earners do not pay IRPF. Currently, workers earning the SMI (17,094 euros) benefit from a deduction of 591 euros, ensuring they are not taxed regardless of their personal circumstances. Updating this deduction will require legal reform, which is expected to be approved either in the Permanent Deputation or by the new government following the elections in 2027.
