hit tracker
Friday, March 24, 2023
HomeLatest NewsA change arrives in the payroll for February: new tax reduction in...

A change arrives in the payroll for February: new tax reduction in personal income tax

Date: March 24, 2023 Time: 21:54:01

Important changes in the February payroll, which many salaried workers will receive tomorrow, coinciding with the last day of the month. Specifically, for salaries of less than 21,000 euros, which will see a tax reduction of personal income tax reflected, which may worsen. Now, the question is none other than how they will adjust the withholding to the new tranches.

Well, first of all, the first thing to know is that one of the main fiscal measures that were included in the new General State Budgets, approved last December, has to do with the increase in gross annual salary to from which the income tax begins to be paid, which goes from 14,000 euros a year to 15,000 euros. But this was not the only key measure that was taken by the Ministry of Finance and Public Function, led by María Jesús Montero.

In addition, a reduction in personal income tax withholdings will be established for incomes of less than 21,000 euros gross per year. According to calculations by the Government of Spain, this figure is equivalent to the average wage in our country, so it is estimated that half of the wage earners can benefit. This economic initiative aims to try to help professional profiles with lower salaries to cope with the high rise and increase in prices with a temporary tax reduction.

The novelty of this year is that, until now, this tax benefit was applied to income between 15,000 and 18,000 euros. However, this change means that the measure will also apply to those who receive wages of between 22,000 and 35,200 euros, as stipulated in article 85.3 of the Personal Income Tax Regulation.

What salaries does the reduction in withholdings in personal income tax affect?

Article 20 of the Personal Income Tax Law has been modified by section One of article 59 of Law 31/2022, on General State Budgets for the year 2023, so that the reduction for obtaining work income is increased for those taxpayers who meet the requirements detailed below and, similarly, the limit below which this reduction will be applied is increased.

The new amounts of the personal income tax reduction are the following:

If the net income from work is equal to or less than 14,047.50 euros (before 13,115 euros), the applicable reduction rises to 6,498 euros (before 5,565 euros) 50 euros, the applicable reduction is obtained from the following calculation: 6,498 euros (before 5,565 euros) minus the result of multiplying by 1.14 (previously 1.5) the difference between work performance and 14,047.50 euros.

In addition, article 85.3 of the Personal Income Tax Regulation, which regulates the applicable withholding rate on earned income, has also been modified. In this way, the adjustments in withholdings are now extended to those taxpayers who receive income between 22,000 euros and 35,200 euros per year.

Puck Henry
Puck Henry
Puck Henry is an editor for ePrimefeed covering all types of news.

Most Popular

Recent Comments