Spain's 2016 State budget: spending, pay, pensions and taxes

Automatic summary, not yet reviewed

1. The General State Budgets for 2016 are approved. The non-financial spending limit is set at 123,394 million euros, 4.4% lower than in 2015, and the deficit target for all Public Administrations is 2.8% of GDP.
2. Pay for public sector staff cannot rise more than 1% compared to the amounts in force on December 31, 2015. The replacement rate for public employees is also set: generally 50%, and up to 100% in priority sectors such as education, health, security and research.
3. Pensions paid by the Social Security system and by Clases PasivasClases Pasivas The State's pension scheme for civil servants and military personnel, which predates the current Social Security system. are generally increased by 0.25% in 2016. The law also sets minimum pension amounts and non-contributory pensions, which are set at 5,150.60 euros per year.
4. The Government is authorized to increase State debt, with the limit that the outstanding balance on December 31, 2016 may not exceed the January 1, 2016 balance by more than 52,882,394.53 thousand euros. Limits are also set for State and public agency guarantees.
5. In personal income taxincome tax The personal income tax (IRPF in Spain): what people pay on what they earn from work, business or savings. (IRPF), the deduction limits for health insurance premiums are raised, especially for people with disabilities, and the limits for staying in the objective estimation regime (módulos) are temporarily widened for 2016 and 2017. The Wealth Tax is extended through 2016.
6. Fixed-amount State fees and port fees are kept frozen at their 2015 amounts. The national ID card and passport become free for large families.
7. Social Security contribution bases and rates are set for 2016: the maximum contribution base is 3,642.00 euros per month, and the general rate for common contingencies in the General Regime is 28.30%.
8. A motherhood supplement is created for contributory retirement, widowhood and permanent disability pensions of women with children: from 5% with two children up to 15% with four or more. It applies to pensions starting on or after January 1, 2016.

Who it affects

• Public employees and public sector staff: Their pay can only rise 1% and hiring of new staff is limited by replacement rates.
• Pensioners: Their pensions generally rise 0.25%, with minimum amounts set by the law and a new motherhood supplement for women.
• Self-employed people and companies: Their Social Security contribution bases and rates are set, and some tax rules change, such as the patent box in corporate income tax.
• Taxpayers in general: The Wealth Tax is extended, fees stay frozen, and some personal income tax deductions change.
• City councils and Autonomous Communities: Their funding is regulated through shares of State taxes, convergence funds and Interterritorial Compensation Funds.

Words worth knowing

Clases Pasivas

The State's pension scheme for civil servants and military personnel, which predates the current Social Security system.

Tasa de reposición (replacement rate)

The maximum percentage of vacant positions that can be filled when a permanent employee leaves.

Estimación objetiva (objective estimation)

A simplified way of paying personal income tax for small businesses, known as módulos.

Aval (guarantee)

A guarantee by which the State agrees to pay a debt if the borrower cannot.

IPREM

A public income indicator used in Spain to calculate benefits and aid amounts.

income tax

The personal income tax (IRPF in Spain): what people pay on what they earn from work, business or savings.

It summarizes the law as published in the BOE. It is written by artificial intelligence and may contain mistakes: the official text is what counts. Read the official text · How we make summaries