Salaries in Spain: Typical and Base Salary Levels

What is the average salary in Spain?

By the end of 2023, the average salary in Spain will stand at 2,106 euros gross per month, reflecting an increase of 5.9% over previous years. This rise is mainly attributed to inflationary pressure.

Wage differences between regions are notable, with the most industrialized provinces such as Madrid and Barcelona having the highest salaries. In addition, significant wage disparities are observed based on gender, age and professional sector.

Despite this, thanks to the relatively affordable cost of living in Spain, the average salary allows for a fairly comfortable lifestyle in the country.

It is true that rents in large cities such as Barcelona or Madrid can be high, but living in peripheral areas of these cities or in less touristic regions allows, even with the lowest salaries, to enjoy a good standard of living in Spain.

What Methods Are Used to Determine the Average Salary?

Calculating the average wage is an essential task in understanding a country's economy.

We recently analyzed the average wage in Spain, essentially the average remuneration received by a randomly selected worker.

To appreciate the true meaning of this number, it is crucial to understand its method of calculation.

In simplified form, the average wage is determined by adding up the total wage income and dividing this total by the number of people employed.

This calculation, adding up the earnings of all workers in the country and dividing by the total number of employees, reveals certain limitations. It includes workers from various sectors and industries, which may distort the representativeness of the data. Although it provides a general overview, it is not a fully reliable indicator for predicting wages in a specific sector or position.

In addition, it is important to consider how pay is accounted for in the calculation of the average wage. In Spain, for example, it is usually based on 14 annual payments, including two extra payments, although in some contexts 12 are taken into account.

Finally, it is essential to differentiate between gross and net salary. The net salary is what the worker actually receives, deducting taxes such as personal income tax, social security contributions and other deductions.

All these details are clearly reflected in the employee's pay slip. For more information on the structure of payrolls in Spain, we invite you to explore this article.

What are the best paid jobs in Spain?

It is true that the salary differences between professions are notable. The following jobs stand out as the most lucrative:

• Surgeon: leads the list with an average annual salary of 64,500 euros.
   
• Chief Project Engineer: earns an average of 59,900 euros per year.
   
• Sales Director: earns on average 58,880 euros annually.
   
• IT Director: with an average salary of 48,000 euros per year.

In the industrial landscape, it is companies in the banking and investment sector, as well as insurance companies, that offer the most competitive salaries.

There is a direct correlation between company hierarchy and salary level: executive and senior management positions tend to have the highest incomes in Spain. They are followed by healthcare professionals, scientists and intellectuals, who also enjoy high salaries.

In contrast, jobs in catering and tourism tend to have the lowest salaries. These differences reflect the variability in the economic valuation of different professions and sectors in the Spanish labor market.

Comparison of Salaries Across Different European Union Countries

Comparing Spain's wage conditions with those of other European countries provides an interesting perspective on regional economic differences within Europe.

There is a notable disparity between northern and southern European countries. Nordic countries such as Germany, Finland and Norway have significantly higher wage levels than southern countries, including Spain, Greece and Portugal.

Spain, in this context, is in an intermediate position. Wages in Spain are considerably lower than in northern European countries, but still higher than in many southern countries, with the notable exception of Italy.

In terms of minimum wage, Spain ranks eighth among the 22 countries of the European Union. This indicates that, although overall wages in Spain may not be as high as in other regions, the country maintains a reasonably good level in terms of minimum wage compared to other EU members.

This north-south divide reflects wider differences in terms of economics, cost of living and labor policies across Europe, and underlines the importance of considering the regional context when assessing wage levels.
 

Why are salaries in Spain lower than EU countries?

The reasons behind the lower salaries in Spain compared to Northern European countries are multifaceted and include several economic and social factors:

• Cost of Living: In Spain, the cost of living is considerably lower than in Nordic countries such as Sweden or Norway. This difference in the cost of living is reflected in salary levels.
   
• Unemployment Rate: Spain experiences a relatively high unemployment rate, approximately 20%, with a notable seasonality. This high unemployment rate reduces the competitiveness of the labor market, which in turn limits the impetus to increase wages, as the supply of workers exceeds demand.
   
• Productivity and Wages: There is a direct correlation between productivity and hourly wages. With Spain located at an average level of productivity, its wages also tend to be at the average.
   
• Labor Costs: The costs associated with hiring and social security payments in Spain are significant, which may influence the ability of companies to offer higher wages.
   
• Business Structure: Approximately 90% of companies in Spain are micro-SMEs with less than 200 workers. The limited capacity of these small companies to generate substantial revenues and profits impacts their ability to offer high wages.
   
• Wage Gap between Managers and Workers: There is a large wage disparity between executives and managers and regular employees. Managers can have average salaries of 50,000 euros per year or more, while workers' salaries are significantly below.
   
• Influence of Immigration: Spain's proximity to southern countries with even lower wage levels influences migration to Spain. Many immigrants from these countries accept lower wages compared to local workers, which may contribute to the decline in average wages in the country.

Together, these factors illustrate a complex picture of the labor market in Spain, highlighting how economic, demographic and structural conditions can influence wage levels.
 

What is the minimum wage in Spain?

The Minimum Interprofessional Wage (SMI) in Spain plays an important role in the country's wage structure and in reducing wage disparities, including gender differences in the lower income segments.

• Amount of the SMI: The current SMI in Spain is 1080 euros per month, distributed in 14 payments. This increase contributes to reducing the wage gap, especially in the lower income brackets, and can have a positive impact on gender equality in terms of wages.
   
• Applicability of the SMI: This minimum wage applies to all workers in Spain who are registered with Social Security, regardless of gender, age or employment sector. This universal criterion ensures that all workers, under any contractual condition, receive at least this minimum remuneration.
   
• Determination of the SMI: The Spanish Ministry of Labor and Social Economy is responsible for setting the SMI and revising it annually, which means that the minimum wage may vary each year, depending on economic conditions and political decisions.
   
• International Comparison: In comparison with other European countries, the SMI in Spain is higher than in Portugal (820 euros/month), but lower than in France (1,747.22 euros/month).
   
• SMI and Part-Time Work: For part-time jobs, the SMI is adjusted proportionally. Currently, for a part-time job, the SMI is €540/month with 14 payments. This applies even to short-term contracts, such as seasonal or summer jobs.

The SMI is a key tool to guarantee a minimum income level for all workers in Spain and plays a significant role in the fight against in-work poverty and wage inequality.

What do I do if I am paid less than minimum wage?

In Spain, labor legislation provides protection for workers to ensure that they receive at least the Minimum Interprofessional Wage (SMI). If a worker discovers that his or her remuneration is less than the SMI, he or she has a legal right to claim the difference from his or her employer.

• Right to Claim the Minimum Wage: Workers are protected by law and can claim the amount they are short of the SMI from their employer. If an employer fails to comply with this obligation, it may face legal sanctions, including fines, and may be required to adjust wages to comply with labor legislation.
   
• Role of the Wage Guarantee Fund (FOGASA): FOGASA is a key institution in Spain that ensures that workers receive the minimum wage. This body is particularly relevant in situations where the insolvency or bankruptcy of a company prevents the payment of wages due.
   
• Dependent on the Ministry of Labor: FOGASA operates under the auspices of the Ministry of Labor and is activated in cases where a company is unable to pay its employees due to financial difficulties or closure. This fund ensures that workers receive at least the minimum wage for services rendered, even in situations where the company cannot meet its salary obligations.

It is important for workers to be aware of their rights and the avenues available to them in the event that their wages do not meet the legal minimums established. The existence of bodies such as FOGASA reflects the commitment of the Spanish legal system to the protection of labor rights and the guarantee of fair working conditions.
 

Spanish labor market

It is important to highlight that the Spanish labor market is known for being quite protective of workers' rights, despite the flexibilizations introduced with the 2012 labor reform.

One of the highlights in this market is the minimum wage, which is relatively high compared to the country's productivity and cost of living. This guarantees a minimum level of income for workers.

In addition, the Workers' Statute and the regulatory framework for contracts provide significant protections for employees. These regulations establish that, regardless of profession, a worker may work a maximum of 40 hours per week through a contract. If overtime is performed, it cannot exceed 40 hours per week and must be paid at the hourly rate established in the basic contract or at a higher rate.

It also emphasizes the importance of ensuring an adequate rest period for workers, with at least 12 hours between the end of one workday and the beginning of the next. In addition, after completing a work week, one and a half days must elapse before the start of the next work week.

A relevant aspect is the protection of young people in the labor market. Minors under 18 years of age cannot work unless they are 16 or 17 years of age and have the explicit consent of their parents or legal guardians.

For any questions or doubts related to the employment contract or salary, a team of expert lawyers is available to provide advice and answers. This additional legal attention emphasizes the importance of ensuring that workers' rights are respected and protected in the Spanish labor market.