Withholding applicable to a permanent worker with an indefinite-term contract
Calculating the withholding tax for a permanent seasonal worker is essential in order to avoid problems with the Tax Agency later on. We explain the tax rate to be applied.
Withholding tax on a permanent seasonal worker in Spain
It should be borne in mind that a permanent worker is not a temporary worker.
And it makes no difference whether it is full-time or part-time. Therefore, the minimum withholding rate applicable to this type of contract, which is 2%, cannot be applied.
In view of the doubts that have arisen, the Directorate General of Taxes (DGT) recently resolved a query indicating the guideline to follow: a permanent seasonal worker, although working less than 12 months a year, does not have a contract of less than one year, therefore, the tax rate that has to be applied in the withholding of Personal Income Tax (IRPF) would be higher.
This was a controversial issue because, in fact, the law was not clear. Therefore, only from 2023 onwards, there is a clear guideline on how personal income tax withholdings for this group should be accounted for.
Basically, the income criterion will be applied, with exceptions.
However, there would be some possibilities to reduce the withholding, in general, which are those applied in the Personal Income Tax Law 35/2006 and in article 81.1 of the tax regulations: according to income, number of children and family situation.
Personal income tax withholdings for permanent workers in 2024 and exemptions
The key to not applying the withholding tax would be the annual amounts received, not the number of months worked.
The criteria, for 2024, is as follows depending on income, although it may vary depending on what the regional tax bracket applies:
- Up to 12,450 euros, 19 %.
- Between 12,450 and 20,200 euros, 24%.
- From 20,200 euros to 35,200 euros, 30%.
- From 35,200 to 60,000 euros, 35%.
- From 60,000 to 300,000 euros, 45%.
- From 300,000 euros and above, 47%.
This is the default amount, but the State only has regulatory power over 50% of the tax.
The other 50 %, which is the regional tranche, would be used to make up the sum.
In any case, the trend is that, for low incomes, this tax rate is even lower in most territories.
This complexity makes business consultancy advisable.
In addition, there are some permanent, discontinuous workers who would be exempt from personal income tax withholding. Which ones?
Those who are single and who earn less than 15,876 euros gross per year. The concept is that whoever earns less than the minimum interprofessional wage does not have to withhold income tax.
It should be noted that, in practice, this is a large part of the workers in this modality.
Therefore, it is highly probable that in many cases, the withholding of the permanent seasonal worker for IRPF is not necessary.
To summarise...
The withholding of the permanent seasonal worker in the IRPF is, in essence, similar to that of the rest of the workers.
Do you have an SME and need specialised advice?
Don’t worry, at Asesoría Orihuela Costa we can help you, contact us!
