Spain is a very popular expat destination. Every year, many people choose Spain as a perfect place to live, study, work or retire abroad. There’s a lot on offer. Maybe you’re thinking of heading there for a working gap year, or perhaps you want to settle permanently to build your career while enjoying the Mediterranean lifestyle.
Spain has relatively low salaries, although living costs tend to be on the low side too. Whatever you’re thinking of doing for money while you’re there, it’s a good idea to understand the likely wage you can earn - and of course how that balances with the cost of living.
This guide tells you all you need to know about how minimum wage levels are set in Spain, how they compare to the costs of living there and minimum wages elsewhere in the world.
The minimum wage in Spain is known as the SMI (Salario Mínimo Interprofesional)
Spanish minimum wages are expressed as daily, monthly and annual calculations. In 2017 they are as follows:
- Daily minimum wage: EUR 23.59
- Monthly minimum wage: EUR 707.60 (based on 14 payments, or EUR 825.65 based on 12)
- Annual minimum wage: EUR 9,906.40
A working day is usually 8 hours, and a week is 40 working hours. The monthly minimum wage is shown as two separate figures because some employers pay salaries in 14 instalments. In this case, you get paid every month but have an extra pay packet twice a year, usually just before the summer and in December, before Christmas.
The minimum wage is set by the government and is reviewed every year. It then enters into law through a Royal Decree. The new wage is usually announced in early December and then becomes law on 1 January the next year. In 2017, the minimum wage went up 8%, far above the rate of inflation.
The minimum wages set by the government cover all employees, regardless of age.
What’s the minimum per month you need to make to qualify for national healthcare or health insurance?
Spain has an excellent health system. Some 90% of Spanish people use the public health system - although you can opt for private care instead if you buy insurance or pay for treatment.
If you’re working in Spain, and pay social security contributions - which are usually deducted at source by your employer - then you should be entitled to care under the Spanish public healthcare system. All you have to do is register with your local health centre, showing your ID documents and social security number.
When you’re working out the practicalities of your move to Spain, you have to bear in mind the cost of living. In general, Spain is among the cheaper places to live in Europe, although the price of rent and regular daily costs can vary hugely depending on location. Often you’ll find that the places with the best salaries on offer also come with the highest price tags - so weigh this when you’re deciding where to settle.
The living wage in Spain is calculated to be about EUR 810 a month in 2017, a shade above the monthly minimum wage paid to most employees. Trade Unions in Spain are campaigning for further increases to the minimum wage, to make the monthly salary, when calculated over 14 payments, above EUR 800.
Living between countries or thinking of making a move? TransferWise could help you save when you send money abroad.
Whatever your financial situation, taking some practical steps to make sure your money goes further when you move abroad, is a good idea. One common problem for expats is the cost of converting your cash to different currencies when you live or work overseas.
Fees and charges applied to your conversion might look quite small at first, but can quickly mount up. The exchange rate used on your conversion is also really important, when it comes to making sure you don’t get ripped off. If you find a service which says that currency exchange can be done for free, be wary. All banks and money exchange services have to make a profit. So if they claim to charge no fees, then you’ll likely find that they mark up the exchange rate and take the difference as their profit. You lose.
Of course, you can check what your bank or exchange service is up to, with an online currency converter. Just compare the difference between the real exchange rate for the day, and the one they’re offering you.
If it looks like you’ll get ripped off using your regular bank or exchange service, then check out the difference if you do your currency conversion with TransferWise. TransferWise uses the real exchange rate - the one you’ll find on Google - and applies only a low, upfront fee for transfers. That means that you could get a much better deal.
There’s no magic involved. TransferWise simply approaches a common problem from a different angle. Most banks and money transfer services have high charges for international transfers using the SWIFT system. But TransferWise does things differently than banks. By avoiding the costs of using SWIFT, TransferWise can pass on the savings to customers.
What to make your money even more flexible? Try a borderless multi-currency account from TransferWise
Another great option if you need to move your money between different currencies frequently, is a borderless multi-currency account. This new account type could save you money, and make your life much easier.
A borderless account lets you keep your cash in any one of dozens of different currencies, check your balance, and switch between currencies when you need to. Exchanges are done with the real exchange rate, and just a fixed low fee. It’s perfect for freelance and remote workers, too. If you live in one country but work in another, you can get paid like a local in the UK, the US, the EU or Australia. Get local bank details with your TransferWise borderless account, and avoid expensive international fees when you’re paid from abroad.
Send and receive cash, make direct payments, and from early 2018, you’ll be able to get a consumer debit card attached to your account, too. What’s not to love?
So how does the minimum wage level in Spain look when set against the minimum in other countries across the world? For reference, the government doesn’t set an official hourly minimum wage but by calculation at works out to around EUR 4.75:
|Minimum Rate||Varies by state - from about EUR6.07 to EUR10.47||EUR8.38||EUR8.84||EUR9.76||EUR11.71|
Of course, approaches to minimum wage around the world vary enormously, and this is only a small sample. For example, Singapore has minimum wage levels set by the government, but only across some low-income sectors. In other countries, there's no minimum wage at all, leaving employers and employees to negotiate wage levels on an individual basis.
Moving abroad for work is exciting, but it’s also a big commitment. It’s important to make sure you can balance the cost of living and the salary you’ll likely be able to achieve. That’ll help make sure that your move is a great success, and you can really enjoy your new home in Spain. Cutting out unnecessary - and unfair - costs, such as excessive fees for day to day banking is a good place to start, to make sure that you have more cash in your pocket to make the most of life in Spain.
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