What personal income tax is and what income it taxes
Personal income tax taxes the taxpayer's annual income: salaries, income from economic activities, rents, dividends and capital gains. It is progressive and divided into two bases: the general base (work and activities) and the savings base (dividends, interest and capital gains).
It is filed once a year, between April and June, but it is paid in advance during the year through payroll withholding or self-employed instalment payments.
The six brackets for 2026
The general scale is applied in blocks: each income bracket is taxed at its own rate, not your entire salary at the marginal rate. For 2026 the standard state plus regional brackets are:
Key points
- - Up to 12,450 euros: 19%
- - From 12,450 to 20,200 euros: 24%
- - From 20,200 to 35,200 euros: 30%
- - From 35,200 to 60,000 euros: 37%
- - From 60,000 to 300,000 euros: 45%
- - Over 300,000 euros: 47%
The personal and family allowance
Before applying the brackets, the personal allowance is deducted, set at 5,550 euros as a general rule, which increases with age (65 and 75), disability and dependent children or relatives. Only income above the allowance is taxed, and that significantly changes the final bill for a single person compared with a family.
The regional part of the tax also varies: each region sets its own rates on its bracket. Madrid starts at 8.5% in the first bracket and Catalonia at 10.5%, so the same salary can pay different amounts depending on the region of residence.
Payroll withholding and self-employed instalment payments
The company withholds personal income tax from the employee each month according to the official tables and their family situation, as declared on form 145. The amounts withheld are paid using form 111 each quarter and summarised on form 190 in January.
The self-employed person has no withholding: they pay in advance using form 130 each quarter, at 20% of the net income from the activity. The rate drops to 15% if the net income for the previous year did not reach 12,000 euros. Everything is regularised in the annual tax return: if you paid too much, the tax authority refunds the difference, and if you paid too little, you pay the difference.
Personal income tax for company partners
If you are a partner in an SL, the dividends you receive are taxed in the savings tax base, at rates from 19% to 28% depending on the amount, and the administrator's salary is employment income subject to withholding. If you also cease to reside in Spain for more than 183 days a year and your centre of interests moves, you stop being taxed on your worldwide income here and start being taxed in your new country of residence.
