Income tax (rates / brackets)

Spain's income tax system applies progressive rates to resident individuals and non-residents earning Spanish-source income. For the 2024 tax year, rates range from 19% on the lowest bracket to 45% on income exceeding €300,000 annually. The system divides taxable income into multiple brackets: 19% up to €21,000; 21% from €21,001 to €35,200; 25% from €35,201 to €60,000; 28% from €60,001 to €300,000; and 45% above €300,000. These brackets apply to residents filing under the Personal Income Tax (Impuesto sobre la Renta de las Personas Físicas, IRPF) regime.

The Spanish Tax Agency (Agencia Tributaria) administers income tax under the Personal Income Tax Law (Ley 35/2006). Non-residents earning Spanish income face a flat 19% rate on employment income, though certain deductions and allowances may apply depending on their tax residency status and applicable tax treaties.

Spain implemented significant changes effective January 1, 2023, introducing new brackets and adjusting rates to address inflation and fiscal policy objectives. The 2024 brackets represent the current statutory framework, with annual adjustments tied to inflation indices.

Employers must withhold income tax from employee salaries based on these rates and the employee's personal circumstances (family status, dependents, other income). Payroll teams must apply the correct bracket based on gross annual earnings, account for personal allowances and deductions, and remit withheld amounts to the Tax Agency monthly or quarterly depending on company size. Accurate classification of income type—employment, self-employment, capital gains—is essential, as different rules apply to each category.