Personal Income Tax Calculator
Calculate your personal income tax withholding in 2023 here in a simple way. Depending on your work and family situation, you will know the IRPF quota that will be applied to you.
Most common questions about IRPF
What is IRPF?
- Direct, since it is applied to income earned after the taxpayer's ability to pay has been demonstrated.
- Personal, since it applies to a specific person (a legal person).
- Periodical, since it is submitted each year by those who are obliged to do so (income tax return campaign).
- Progressive, meaning that those with a greater income should pay a higher percentage of tax.
- Subjective, since it takes into consideration the personal and family circumstances of the taxpayer.
IRPF or personal income tax is a tax applied to income earned by individuals residing in Spain during a specific financial year.
For the purposes of IRPF, income is classified as earnings from employment and economic activity, as well earnings from movable and immovable capital.
IRPF is a tax that is:
How much IRPF do I need to pay?
- Up to € 12,450, the tax rate is 19%.
- From €12,450 to €20,200, the tax rate is 24%.
- From €20,200 to €35,200, the tax rate is 30%.
- From €35,200 to €60,000, the tax rate is 37%.
- From €60,000 to €300,000, the tax rate is 45%.
- More than € 300,000, the tax rate is 47%.
Since IRPF is a progressive tax, the tax rate (the percentage applied to the net tax basis to calculate the amount of tax payable) it is separated into bands:
Taxable income does not only come from earnings from employment, but also other earnings from movable and immovable capital and economic activities. Futhermore, various reductions and deductions may be applied. The exact amount to be paid by each individual is determined by completing a tax return.
How do I calculate the IRPF on a payslip?
- Gross annual salary.
- Contract type.
- Place of residence.
- Personal and family situation, which the worker should report on each year or when there is a change in their circumstances using the modelo 145 form.
- Degree of disability.
To calculate the IRPF on a payslip, various factors must be considered:
Remember that salaries under €14,000 are exempt from IRPF.
How is the net tax liability for IRPF calculated?
The net tax liability for IRPF is the amount that you should pay for this tax. It is calculated by subtracting the deductions you are entitled to (investment in main residence, donations, maternity etc.) from the gross tax liability. This may differ from the amount to be paid if you have had to make any withholding or interim payments prior to completing the annual tax return.
The gross tax liability is the result of applying the tax rate (the corresponding percentage of tax) to the net tax basis, which is the result of subtracting the deductions outlined in the Law on IRPF from the taxable income. Taxable income is the economic quantification of the tax event: in the context of the income tax return, the income earned from employment (the most common), from capital yields, from economic activity or from capital gains and losses.
How do withholdings affect what we pay to the Treasury?
IRPF withholdings are amounts that your company subtracts from your salary and is obliged to pay to the Tax Authorities as an up front payment for the amount that you will need to pay in your annual tax return. The percentage of these withholdings depend on your salary and on your personal and family conditions and ranges between 2% and 45% – with the most common being 15%. If you complete the tax calculation on your tax return and they have withheld too much, the tax return will be negative and the Tax Authorities will refund you the difference. Should the opposite occur, you will need to pay the outstanding amount of IRPF.
Is the calculation different if I do not have a payroll because I am self-employed?
Personal income tax withholdings also apply to the self-employed, but only in certain cases. It must be done by those self-employed who are registered in the second and third sections of the Economic Activities Tax, that is, those who carry out professional and artistic activities. And they must apply this withholding, which is generally 15%, on the invoices of their services to companies, but not to individuals. For new self-employed (in the first three years of activity), the retention percentage drops to 7%.
When is IRPF paid?
Personal income tax is paid once per year during the tax return campaign, which is usually between April and July. During this period the tax return for the previous financial year is completed.
However, many taxpayers have already paid part of the IRPF throughout the year; either through withholdings from their monthly salary or, in the case of self-employed people, through quarterly returns submitted to the tax authorities. If these withholdings were less than the amount you should pay in IRPF, the tax return will show you need to pay. Whereas, if these withholdings were too high, the tax return will show that you are owed a refund.
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