For many retired In Spain, one of the questions that causes the most concern is how Personal Income Tax (IRPF) in their pensions. Even if they are retired from working life, retirees must continue to contribute to this tax, calculated according to the amount of the pension and other personal factors. This tax is crucial for financing the country’s public services and is levied monthly, as is the case for active workers.
The amount of personal income tax that a pensioner must pay is not uniformbut varies depending on certain factors. For example, The amount of pension is one of the main indicators, but other aspects also influence, for example if the retiree receives additional income, their marital status and if they suffer from a recognized disability. This variability means that each retiree has a deduction adapted to their particular situation, in a system where the tax is distributed between the State and the regional sections. As the amount of the pension increases, the withholding tax on personal income tax also increases, which responds to the same logic of tax progressivity applied to the rest of citizens. In 2024, a new deduction table has been put in place which will impact retirees with different income levels. We therefore explain in depth how personal income tax in pensions is established, what percentage corresponds to each bracket and how retirees can stay informed so that the deduction adequately reflects their personal situation.
The table of what retirees have to pay for personal income tax
The tax system in Spain includes the Income tax like a key tax that helps finance essential services. Even if retirees are no longer actively working, their pensions constitute income and, therefore, they are subject to the regulations of this tax. According to the regulations, all pensions that exceed the exempt minimum must pay personal income tax, adjusted according to a progressive scale depending on the amount received.
This tax is broken down into two brackets: state and regional.. Both are assigned to different aspects of the public system, such as health, education and social assistance, with percentage variations depending on the autonomous community in which the retiree resides. This double retention system aims balance the tax contribution throughout the territory, allowing each autonomous community to manage part of the funds collected. Likewise, for retirees who receive other income, the withholding percentage could be increased based on the additional income.
Factors that affect the withholding of personal income tax on pensions
Personal income tax does not apply equally to all retirees, since there are personal factors which can reduce or increase retention. He marital status, existence of a recognized disability and additional income These are important aspects to consider. So a high pension combined with income from rental income, for example, would generate a higher withholding tax. Likewise, retirees with a recognized disability can access tax advantages which reduce the percentage to pay.
Retirees should be aware of these factors because any change In your personal situation, you can modify the direct debit applied. It is advisable to contact the Tax Agency or consult a tax advisor to ensure that the monthly withholding adjusts to your current situation, thus avoiding surprises at the end of the financial year.
Personal income tax table for retirees in 2024
The personal income tax scale establishes specific brackets depending on the level of income of the retiree, these are the main parameters for calculating the withholding tax:
- Pensions of up to 12,450 euros per year: retirees whose pension does not exceed this annual amount must pay a 19% personal income taxdistributed between the state section (9.5%) and the regional section (9.5%).
- Pensions between 12,450 and 20,200 euros per year: For those receiving a pension in this range, the withholding increases by 24%split equally between state and regional sections (12% each).
- Pensions between 20,200 and 35,200 euros per year: In this section, retention reaches 30%with 15% for the State and an additional 15% for the autonomous community.
- Pensions of between 35,200 and 60,000 euros per year: retention in this range increases by 37%divided into 18.5% for the state section and 18.5% for the regional section.
- Pensions of between 60,000 and 300,000 euros per year: retirees who receive a pension of this amount must pay a 45% of personal income tax, with an equitable distribution between the two sections (22.5% state and 22.5% regional).
- Pensions above 300,000 euros per year: finally, for pensions which exceed this amount, the withholding amounts to 47%, distributed 24.5% for the state section and 22.5% for the regional section.
This progressive system guarantees that Those who earn higher incomes contribute a greater proportionit is one of the bases of the Spanish tax system.
How to review and adjust personal income tax withholding in pension
Every retiree has the opportunity to check and adjust their personal income tax withholding. to adapt it to your personal situation. This is particularly useful if your circumstances have changed, for example if you earn extra income or become disabled. Making these adjustments ensures that the amount withheld is consistent with your financial reality and prevents discrepancies from appearing in the annual declaration.
To update their withholding tax, retirees can contact the Tax Agency and submit the necessary documentation to support any relevant changes. This revision allows retirees to keep their withholding taxes adjusted, avoiding paying more than necessary and ensuring that their contribution accurately reflects their current situation.
In summary, Understanding how personal income tax applies to pensions allows retirees to make informed decisions about their tax situation.. With the 2024 deductions table, each retiree can know with more certainty how much they must pay, thus avoiding surprises and ensuring they contribute according to their possibilities. The progressive structure of personal income tax not only meets the principles of tax fairness, but also supports the country’s social protection system.
