Spaniards working longer and earning less

Average incomes fell in Spain during the first three months of the year while the working week grew longer, according to data released by the country's National Institute of Statistics.

"If we want to get out of this situation, there's only one way to do it and that's by working more and, unfortunately,  earning less."

Spain seems to be following that advice from Gerardo Díaz Ferrán, former chairman of the country's main federation of employers,  on how to end the financial crisis, according to the Spanish edition of The Huffington Post.

Ferrán is currently in jail, charged with concealment of assets and money laundering, but he can perhaps glean some satisfaction that the economy outside his cell is developing as he predicted.

The Quarterly Survey of Labour Costs showed that the average gross monthly income, including remuneration in cash and in kind, fell by 0.2 per cent to €1,805.76 ($2,446.26) in the first three months of 2014, while the average basic salary remained steady at €1,632.94.

For companies, the average total cost of employing someone, including Social Security contributions, fell 0.2 per cent, to €2,474.40 per month, compared with the first quarter of 2013.

Spaniards also worked 1.6 per cent longer each week, compared with the same period in 2013, for an average of 34.3 hours.

Average non-salaried benefits – such as redundancy pay, compensation, clothing allowances etc. – also fell 10.8 per cent, to €94.65.

The number of vacancies in Spain during the first three months of the year stood at 54,965, 87.2 per cent of which were in the service sector, but most companies surveyed said that they were not currently hiring.

5.9 million people in Spain are currently unemployed.

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Your questions answered about Spain’s digital nomad visa

Spain's long-awaited digital nomad visa is finally available, but there is still much confusion about it, so we've answered all your burning questions.

Your questions answered about Spain's digital nomad visa

Spain’s Startups Law, which also introduced a new digital nomad visa, was approved at the end of 2022, but didn’t come into force until January 2023 and all the details are only just now being revealed. 

From how much money you need to your tax obligations and if you can bring family, members, here are all your questions answered. 

READ ALSO – REVEALED: Everything you need to know about applying for Spain’s digital nomad visa

What are the financial requirements to apply for the visa?

You must prove that you earn 200 percent of the SMI or Minimum Interprofessional Salary. On January 31st 2023, the Spanish government announced they would increase the minimum wage to €1,260 per month. 

This means that you must be able to prove that you will have an income of at least €2,520 per month or €30,240 per year. You can prove this amount either with job contracts, invoices or bank statements.

Can I bring family members with me on the visa?

Yes, you are permitted to bring partners and children with you to Spain on the digital nomad visa.

In order to add a family member, however, you must prove that you have an extra 75 percent of the SMI or minimum wage. This currently equates to an extra €945. For each additional family member after this, such as children, you will have to prove you have an extra 25 percent of the SMI, which is €315.

READ ALSO: Ten of the best cities for digital nomads to move to in Spain

Do I need private health care?

You must also make sure that you have either private or public health insurance, simply getting travel insurance with health coverage is not enough.

The Spanish government mentions the option of getting public health insurance instead of private cover, but it is not yet clear whether this means that you will have to contribute to the social security system or be eligible for the convenio especial – the public pay-in scheme.

Do I have to have any professional qualifications? 

You must prove that you either have professional qualifications or a degree relating to your job or that you have at least 3 years’ experience working in your field. 

How long is the visa valid for?

The visa will be valid for an initial period of one year, however, it can be renewed for up to five years. After that, if you want to continue living in Spain, you will be able to apply for permanent residency.

Does the visa give me access to travel around the EU?

Yes, once you have your visa and you’re in Spain, you will be able to apply for a residency card. This will allow you to travel throughout the EU during the time that you’re living in Spain.

Keep in mind though, it won’t give you the right to work or live in other EU countries, but you will be able to go for short breaks. 

How long do I have to stay in Spain for the visa to be valid?

Many digital nomads choose to split their time between different countries. If this is your case, and you want to split your time between back home in the US or the UK for example, you must make sure you stay in Spain for a maximum of 6 months per year for your visa to remain valid.

Do I have to pay tax in Spain?

Yes. If you stay longer than 183 days, then you will be considered a tax resident in Spain. This means that any money you earn while working in Spain, even if it comes from clients or companies abroad will be taxable.

However, the digital nomad visa grants you tax benefits, such as being able to pay the Non-Residents Tax Rate (IRNR) rather than the regular progressive income tax (IRPF) that Spain’s resident workers pay.

Non-Resident Tax was previously only applicable to non-residents such as second-home owners, but an exception has been made for digital nomad visa holders even if they spend more than 183 days a year in Spain and are therefore technically fiscal residents.

IRNR is generally 24 percent in Spain and digital nomads will be able to pay this instead of the more progressive rates, as long as they earn below €600,000 a year.

This favourable tax rate will be available for four years, if you choose to renew your visa.