Gross salary, net salary, and employer cost: what gets deducted, and why

The money's journey from the company to your account

Imagine your company pays you a gross salary of €30,000 a year. How much do you actually receive? The answer depends on several factors, but generally you'll receive between €22,000 and €24,000. The rest, nearly €7,000, goes to Social Security and the tax office (Hacienda).

And that's just what's deducted from you. Because the company pays even more.

The three levels of salary

1. Employer cost (what you really cost the company)

Employer cost is the total amount your employer spends on employing you. It includes your gross salary plus the Social Security contributions the company pays (on your behalf, but out of its own pocket).

For a gross salary of €30,000, the company contributes approximately:

Total employer cost: €30,000 + €9,195 = ~€39,195 a year.

The MEI is an extra contribution that funds Spain's pension reserve, in force since 2023 and rising gradually until 2029 (when it will reach 1.2% total, split 1%/0.2% between employer and employee).

And note: this table still doesn't include the contribution for workplace accidents and occupational diseases (AT/EP), which isn't a fixed rate -it depends on the company's economic activity code (CNAE). For office jobs ("oficinas y despachos en general") the 2026 rate is 1.50%, but for higher-risk activities it can exceed 6-7%. In practice, many companies' real Social Security cost is closer to 32% or more, even though the "common core" that applies to everyone is the 30.65% shown in this table.

When you negotiate your salary, this is what your position really costs.

2. Gross salary (what's in your contract)

Gross salary is the figure in your contract: €30,000 in our example. It's the base used to calculate the IRPF (Spain's personal income tax) and your Social Security contributions.

3. Net salary (what you receive in your account)

Net salary is what you actually receive. To calculate it, two deductions must be subtracted from the gross amount:

A) Employee Social Security contributions

On €30,000: 30,000 × 6.50% = ~€1,950 a year.

B) IRPF withholding

The IRPF is the income tax. The company withholds a portion of your salary each month and pays it to the tax office on your behalf. In the annual tax return (declaración de la renta) filed in April, you settle whether you paid too much or too little.

The IRPF withholding rate depends on:

• Your annual gross salary
• Your personal situation (married/single, children, disability...)
• Your autonomous region (each region applies its own brackets)
• Any other income you have

For a gross salary of €30,000 with no special circumstances, the approximate withholding rate is between 14% and 18% depending on the region.

Full example: €30,000 gross in Madrid vs. Euskadi

The difference in Euskadi comes from the fact that the regional (foral) IRPF has different brackets and deductions from the national system.

National IRPF brackets: how it really works

The IRPF doesn't apply the same rate to your entire salary. It works in brackets: each portion of your income is taxed at the rate for the bracket it falls into.

On top of this comes the regional bracket (which varies by region). The total rate (national + regional) for a €30,000 base ranges between 24% and 28% depending on where you live.

Important: the marginal rate (the one for the last bracket you reach) isn't your average rate. If you're in the 30% bracket, you don't pay 30% of your entire salary, only on the portion that exceeds that bracket's threshold.

14 payments: how it affects Social Security and the IRPF

Many collective agreements set 14 payments (12 monthly + 2 extra in June and December). This changes how the monthly payslip is calculated.

With 14 payments of €30,000 gross:

• Regular payment: 30,000 / 14 = €2,142.86 gross per regular payment
• Extra payment: also €2,142.86 gross in June and December

Social Security is deducted only from the 12 regular payments (the extra payments don't contribute separately under many agreements, since it's already prorated). IRPF is withheld across all 14 payments.

The personal and family minimum: what isn't taxed

Before applying the brackets, the tax office lets you deduct the personal and family minimum: an amount considered necessary for living, on which you don't pay tax.

• Basic personal minimum: €5,550 for those under 65
• For each child under 3: +€2,800 additional
• For each child aged 3 to 25: +€2,400 for the first, +€2,700 for the second...

The higher your family minimum (more children, dependents...), the less IRPF you pay.

Deductions from the taxable base: how to legally lower your IRPF

There are contributions that reduce the IRPF taxable base before the brackets are applied:

Contributions to pension plans: up to €1,500/year directly reduce the taxable base. If you're in the 30% bracket, contributing €1,500 to the plan saves you €450 in IRPF.

In Euskadi - EPSV: contributions to an EPSV reduce the general base of the regional (foral) IRPF by up to €5,000/year (or more if the plan allows). It's one of the most powerful deductions in the regional tax system.

Deductible work expenses: the tax system allows a generic €2,000 deduction for employment income for all salaried workers.

How much of a raise will I actually get if the agreement says "3% increase"?

A 3% raise on a €30,000 gross salary → €900 more gross per year.

But net, you'll only receive between €550 and €700, because the IRPF and Social Security take their share of the increase.

This is important to keep in mind when negotiating: if the IPC (Spain's consumer price index) was 3% and you get a 3% raise, in gross terms you're breaking even with inflation, but in net terms you've lost purchasing power because the increase is taxed at your marginal rate (the highest rate in your brackets).

A limit almost nobody accounts for: the maximum contribution base

Contribution rates don't apply without limit: there's a maximum contribution base, set at €5,101.20 a month in 2026 (€61,214.40 a year). Above that figure, neither you nor the company pay any more Social Security contributions, no matter how much higher the salary goes.

The effect is counterintuitive but important: the more you earn above that threshold, the lower the effective percentage of your gross pay that goes to Social Security. For example, with a €100,000 gross annual salary, contributions are only calculated on €61,214.40 (not the full €100,000), so the real SS burden on your total gross pay is well below the 6.50%/30.65% used in this article's examples, which assume a €30,000 salary well under that cap.

There's also a minimum contribution base (€1,424.40/month in 2026, matching the minimum wage), which prevents contributions from being calculated below that floor even if the actual salary were lower.

Our net salary calculator automatically applies both limits when calculating your contributions, so if your salary is well above (or near) the minimum base, you'll see the real effect reflected.

Calculate your exact case

Every situation is different: autonomous region, number of children, other deductions, type of contract... Our net salary calculator gives you the full breakdown for your case: IRPF by bracket, contributions, employer cost, salary percentile, and comparison by region.

It covers both the 12-payment and 14-payment structures, and distinguishes between the national tax regime and the Basque regional (foral) one.