2024 personal income tax brackets: Complete guide to filing your taxes
The Personal Income Tax (IRPF) is one of the main taxes in terms of revenue for the Spanish Tax Agency.
The IRPF has the following characteristics:
- Progressive: It increases as your income rises.
- Personal: It taxes individuals' income and adapts to their conditions, for example, if you have a large family or a disability, you will have access to certain benefits.
- Direct: It doesn't matter where the income comes from, everything that generates income will be considered.
To fully understand what it entails, we first need to understand why it is called that. It is a tax that must be paid by all individuals who have lived in Spain throughout a whole year, and anyone who has lived in Spain for more than 183 days is considered a resident. And to clarify doubts, income is the gains that a person obtains throughout a year.
Income includes both received and salaried income (e.g., wages) or income earned as self-employed workers, such as freelancers. It also includes public benefits, such as pensions.
The IRPF is a tax that operates in brackets. It is important to know how each bracket or step works in order to know the amount to pay in taxes, to plan your personal finances, and to anticipate economic problems if they arise. And if that's not enough, by knowing how it works and which bracket you are in, you can avoid penalties or legal issues.
To define the brackets, we need to separate income into two categories.
General income
Salary (from employment).
- Income from self-employment.
- Rental income if you own properties or derive income from renting out those properties.
- Pension plan withdrawals.
Savings income
This includes income generated in a less active manner, not through work.
- Interest earned on savings accounts from the bank.
- Capital gains.
- Dividends, coupons.
- Sale of real estate.
And what returns are there?
- Earned income from work, which is the salary you earn from working for others.
- Income from movable capital, such as interest generated from a bank account deposit.
- Income from real estate capital, that is, profits obtained from renting out your property.
- Capital gains and losses are generated when an asset, financial or real estate, is sold, such as stocks, investment funds, or a property.
- Profits obtained by a person in their business activity, such as a freelancer or entrepreneur. These only apply to self-employed workers.
Exceptions of individuals who do not have to file income tax:
- If you have earned 22,000 euros or less from a single job.
- Or if you have two or more jobs, if you earn less than 1500 euros from the second job.
Example: If you have earned 21,000 euros from a single job, you are not required to file an income tax return.
Warning: If you have two jobs and earned 18,000 euros from the first job and 2,000 euros from the second job, even though the total is 20,000 euros, you are required to file an income tax return because the second job exceeds 1500 euros.
Special Considerations for Different Situations
Self-employed
- Tax benefits: Some countries offer benefits for self-employed individuals like reductions in tax rates.
- Record keeping: Sometimes there are deductions like business expenses, so it is important to keep track of every expense and income from your business activities (receipts, invoices, etc.).
- Tax deductions: You may be eligible for certain specific deductions such as health insurance, business expenses, etc. Make sure to claim them correctly.
Pensioners
- Tax benefits: In many countries, you can access different special deductions.
- Record keeping: It is important to keep track of all the pension income you have received throughout the year. Another thing to consider is to report in your income tax return any rental income you have, investments, stocks, etc.
People with disabilities
- Deductions: Medical expenses may be deductible in certain cases.
- Benefits: You may receive benefits from Social Security, disability pensions, or other assistance programs.
- Tax credits: You may have very low income, so the government provides credits. You just need to see if you meet their requirements.
All this information can be found on the official website of the Tax Agency of each country.
So how does the IRFP work?
It operates in brackets, also known as scales, and basically these are divisions set by the government to indicate the percentage of tax each person must pay.
Depending on the amount of income you have during the year, you will belong to one bracket or another. For example, if you earn 20,000 euros a year, you belong to the second bracket. However, if by the end of the year you earn 65,000 euros, you must apply the percentages up to the fifth bracket, including the latter because you slightly exceed the previous bracket.
But let's take it step by step; first of all, let's see the general IRPF of 2024 in Spain.
General IRPF 2024 table of tranches
And if I'm from Asturias, will I pay the same as someone who lives in Extremadura?
The answer is no, because this tax is divided into two types.
- State Type, which is the fixed percentage that applies throughout the Spanish territory, except Navarra and the Basque Country, which have their own fiscal powers.
- Autonomous Type, each autonomous community has a certain margin to adapt taxes to their circumstances, that is, they do not have the same income tax brackets in Andalusia as Aragón, for the time being where they are located and the number of benefits that each one obtains.
Just by going down a little, you can see all the tables of each autonomous community of Spain with their 2024 personal income tax.
Tables for each Autonomous Community
Andalucia 2024 Personal Income Tax tranches
Aragón 2024 personal income tax tranches
It uses the 9-step scale that it introduced in 2023.
Asturias 2024 personal income tax tranches
Balearic Islands 2024 personal income tax tranches
Canarian income tax tranches 2024
Cantabria 2024 personal income tax tranches
Castilla-La Mancha 2024 personal income tax tranches
Castilla y León 2024 personal income tax tranches
Catalonia 2024 Personal Income Tax tranches
Community of Madrid 2024 personal income tax tranches
Income Tax tranches of the Valencian Community 2024
Extremadura 2024 personal income tax tranches
Galicia 2024 income tax tranches
La Rioja 2024 personal income tax tranches
Murcia 2024 personal income tax tranches
Navarra 2024 income tax tranches
Navarra uses a different tax than that applied in the common territory.
The Regional Community has adapted 3% for 2024.
Basque Country 2024 Personal Income Tax tranches
Álava, Guipuzcoa and Vizcaya regulate their own income tax; some measures are the same and in some cases, the regulatory part of the common territory applies. The rate in 2024 is adjusted by 2.5% as a result of inflation.
Let's see an example to make it clearer:
We have a person who has been resident in Spain for more than two years and earns 35,000 euros net.
And how do I calculate all this?
First of all, we will look at what we earn; in this case, we have net profits of 35,000 euros a year (without any reduction applied since it is a personal tax), so my bracket is the third one.
And as we have said, this is done in brackets:
For the first 12,450 euros of my salary, I have a fee of 2,365.50 euros left.
The second bracket, for the range of 12,450 to 20,200, results in a fee of 1,860.00 euros.
And the last step, which is the third bracket, has a fee of 4,400.00 euros.
The sum of all the ranges gives me a fee of 8,665.50 euros (both state and regional). When you go to file your taxes, the same program will calculate both the state and regional taxes for you.
Tips for optimizing your personal income tax payment
- A good compilation of documents. Don't leave any out.
- Access the filing system; you can access it on the official website of the Tax Agency.
- Review all the documentation, make sure you have filled everything out correctly and effectively.
- It is always helpful to have a professional you can consult about deductions you may not even consider.
- On the same page of the Spanish Tax Agency, you can access online income tax simulators and calculate it. Within it, there is the RENTA WEB Program that helps you file your taxes electronically.
- The Tax Agency itself offers telephone assistance to answer any questions related to the tax return.
Knowing how this tax works can help you in many ways to make the most of your annual income. Being well informed and up to date is crucial so you don't find yourself in a tight spot at the beginning of the year. We invite you to use this blog as a tool to help you on this and future occasions.
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