Spain's 2022 State Budget: spending, pensions, taxes and contributions

Automatic summary, not yet reviewed

1. The State budget for 2022 is approved, with a non-financial spending cap of 196,142 million euros and spending credits of 458,969,567.59 thousand euros, funded by expected revenues and by borrowing.
2. Public sector employee pay and the wage bill of labor staff may rise by at most 2% compared with December 31, 2021. Public employment offers follow replacement rates of 110%, 120% in priority sectors and 125% for State security forces and regional and local police.
3. Social Security and State civil servant pensions are updated in 2022 according to average inflation over the twelve months before December 2021. Non-contributory pensions rise 3%, to 5,808.60 euros a year, and a 525-euro annual supplement is set for pensioners who rent their home.
4. For personal income taxincome tax The personal income tax (IRPF in Spain): what people pay on what they earn from work, business or savings., the general limit for deductions on contributions to social welfare plans drops to 1,500 euros a year, but it can rise by 8,500 euros if the increase comes from employer contributions or from worker contributions equal to or below them. This promotes the so-called second pillar of pensions.
5. Corporate income tax introduces a minimum tax of 15% of the taxable base for companies with revenue of at least 20 million euros or taxed under fiscal consolidation, with special rates of 10% for newly created companies and 18% for credit institutions and hydrocarbon companies.
6. Social Security contribution bases and rates are updated for 2022: the maximum contribution base rises to 4,139.40 euros a month, and rates are set for common contingencies, unemployment, vocational training and self-employment cessation, plus contributions for civil servants' mutual societies.
7. The funding of local governments and autonomous communities is regulated: transfer of personal income tax, VAT and excise duties to municipalities and provinces, settlement of the 2020 regional funding system, and interterritorial compensation funds of 432,430 thousand euros.
8. New bodies are created, such as the National Police University Training Center and the State Agency for Digital Administration, the National Energy Storage Research Center consortium is authorized, and a youth cultural voucher of up to 400 euros is created for those turning 18 in 2022.

Who it affects

• Public employees and public sector labor staff: Their pay rises by at most 2% and limits apply to temporary hiring.
• Pensioners: Pensions are updated by inflation over the twelve months before December 2021; non-contributory pensions rise 3%.
• Workers and companies: Deduction limits for pension plans under personal income tax change, as do Social Security contribution bases and rates.
• Large companies: They become subject to a 15% minimum tax under corporate income tax.
• Local governments and autonomous communities: Their funding rules, tax transfers and 2022 settlements are set.

Words worth knowing

Tasa de reposición (replacement rate)

Maximum percentage of new positions a public administration can offer, calculated from staff departures the previous year.

Pensión no contributiva (non-contributory pension)

Pension granted to people with insufficient income even if they have not contributed enough to Social Security.

Estimación objetiva (objective estimate method)

Simplified method letting small self-employed workers calculate their income for personal income tax without full bookkeeping.

Consolidación fiscal (fiscal consolidation)

Regime under which a group of companies is taxed as a single entity, adding up their results.

Fondo de Suficiencia Global (Global Sufficiency Fund)

Money the State gives autonomous communities to cover the gap between their spending needs and their own revenues.

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