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In short: In Spain, IRPF taxes your income progressively: in 2026 the general scale combines a state bracket and a regional (autonomous community) bracket, with reference marginal rates running roughly from 19 % (up to about €12,450) to 47 % (above €300,000), and intermediate brackets near 24 %, 30 %, 37 % and 45 %. The regional part varies by community, so the actual rate differs by region. A tax-free personal allowance (around €5,550) lowers what you pay, plus allowances for children and dependent parents. During the year your employer or client applies withholdings on account, and the annual return (filed between April and June of the following year) settles the result. This is educational content, not tax advice: for your specific case consult a professional or the AEAT. Figures as of 2026; if in doubt, verify with the official source.

Income tax (IRPF) basics in Spain

Kontoo editorial team · Updated 06/24/2026

IRPF (Impuesto sobre la Renta de las Personas Físicas) is the tax you pay in Spain on what you earn: your salary, self-employed income, rent or interest. It is a progressive tax, which means the first euros you earn are taxed at a lower rate than the last ones. Understanding how it is built —brackets, withholdings and the tax-free allowance— helps you read your payslip and avoid surprises at tax time. This chapter covers the basics with reference figures as of 2026; exact amounts change each year, so always cross-check them against the official source.

Work out your taxable base: add up your yearly income (employment, self-employment, rent, interest) and subtract deductible expenses and social-security contributions.
Apply the progressive bracket scale: each slice of your income is taxed at its own bracket rate, not all of it at the top rate. The final rate combines the state scale and your autonomous community scale.
Subtract the personal and family allowance (the part of your income that is not taxed) to reach the amount you actually owe.
Compare what was withheld during the year with what you owe: if too much was withheld you get a refund; if too little, you pay the difference in the annual return.

What matters

IRPF is the central tax in Spain’s system for individuals. It taxes the worldwide income of tax residents (those who spend more than 183 days a year in Spain or have their main centre of interests here) and is calculated on the taxable base, which is your income minus the expenses and reductions the law allows. The tax year matches the calendar year: 1 January to 31 December. The 2025 income, for example, is filed during the 2026 campaign. The key thing to grasp is that IRPF is progressive and bracketed. A single rate is not applied to everything you earn: each block of income is taxed at its own bracket rate. The first euros are taxed at the lowest rate even if your total salary places you in a higher bracket. The rate you actually pay (your average rate) is always lower than your marginal rate (the rate on your last euro earned). The result also combines two scales: the state one, the same for everyone, and the regional one set by each community. That is why the same salary pays a little differently depending on where you live. Before the brackets are applied, the personal and family allowance is deducted: an amount deemed to cover basic needs that is not taxed. As of 2026 the reference personal allowance is around €5,550 per year, increasing with age, plus allowances for descendants, ascendants and disability. This means lower incomes pay little or nothing. Alongside IRPF, the other big everyday tax is VAT (IVA, value-added tax), which you pay when you consume. In 2026 three main rates coexist: the standard 21 %, the reduced 10 % (for example hospitality and certain food and transport) and the super-reduced 4 % (essential goods such as bread, milk or medicines). VAT does not depend on your income, but on the product. The whole system is run by the State Tax Administration Agency (AEAT), known as Hacienda, through its online portal. The return is usually filed between April and June. Note: this chapter is informational and does not replace advice from a professional or a check of the current official rules.

ExampleImagine a taxable base of €30,000 in 2026, using the general reference scale (state + regional). The first €12,450 is taxed at 19 % = €2,365.50. The slice from €12,450 to €20,200 (€7,750) is taxed at 24 % = €1,860. The slice from €20,200 to €30,000 (€9,800) is taxed at 30 % = €2,940. The amount before the allowance totals about €7,165. Applying the personal-allowance effect (about €5,550 taxed at the lowest rate, cutting the bill by roughly €1,055), the result is around €6,110 of IRPF: an average rate of about 20 %, well below the 30 % marginal rate. Rounded, illustrative figures as of 2026; the real result depends on your autonomous community and circumstances. If in doubt, check the official source.

To see how your savings grow once tax is taken out, try Kontoo’s compound interest calculator. For official figures and deadlines, always check the Spanish Tax Agency (AEAT) online portal.

In depth

Marginal rate versus average rate

The marginal rate is what your last euro earned pays (your top bracket); the average rate is the total paid divided by all your income. Because the first brackets are taxed less, the average rate is always lower than the marginal one. Knowing this difference prevents bad decisions, such as turning down a raise for fear of “paying more tax.”

The weight of the autonomous community

The regional part of IRPF is set by each community, so the actual total rate depends on where you live. Madrid keeps some of the lowest regional rates and Catalonia some of the highest, with scales of differing numbers of brackets. For the same base, the yearly difference can run to hundreds of euros. Communities also offer their own deductions (housing, family, donations).

Important: this is not tax advice

This chapter explains general concepts with reference figures as of 2026. Rates, thresholds and deadlines change and depend on your situation and community. For specific decisions, consult a registered tax adviser or the official information from the Spanish Tax Agency (AEAT).

Checklist

IRPF is progressive: each slice of income is taxed at its own rate, not all at the top rate.
The final rate combines the state scale and your autonomous community scale, so it varies by region.
The personal and family allowance reduces the part of income that is taxed (2026 reference: around €5,550 personal allowance).
Withholdings are advance payments of the tax; the return (April–June) settles a refund or a payment.

Common myths

Myth: “If I move up a bracket, I lose money because my whole salary is taxed at the higher rate.”

Reality: False. Only the part that falls into the higher bracket is taxed at that higher rate; the rest keeps its earlier rates. Earning more always leaves you with more net pay: you never lose money by crossing a bracket.

Myth: “If I get a refund, the tax office is giving me money.”

Reality: It is not a gift: it is the return of withholdings you overpaid during the year. It was your money all along; you simply get it back once the account is settled in the return.

Frequently asked questions

Why is IRPF withheld from my payslip if I also file a return?

The withholding is an advance payment of IRPF that your employer pays monthly on your behalf. The annual return adds it all up and compares it with what you actually owe: if you prepaid too much you get a refund; if too little, you pay the difference. That is why an accurate withholding rate avoids surprises.

Am I required to file an income tax return?

It depends on your income and how many payers you had. As a 2026 reference, with a single payer the general threshold is around €22,000 of annual employment income; with several payers it drops to roughly €15,876 (with exceptions). Other cases apply too, so it is worth checking yours on the AEAT site.

Is IRPF the same everywhere in Spain?

Not entirely. The state part is common, but each autonomous community sets its own regional scale and deductions. So, for the same salary, the final IRPF can differ between, say, Madrid and Catalonia. The Basque Country and Navarre also run their own regional tax systems.

All lessons · Glossary · Editorial · Kontoo does the math and explains – this is general education, not tax, legal or financial advice.

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