Having ten or fifteen years in a company no longer guarantees earning much more than a worker who has just joined and receives the interprofessional minimum wage (SMI). The difference between the two pays may have been reduced over the last few years as a consequence of the successive increases in the wage floor, which in 2026 stands at 1,221 euros gross per month in 14 installments, equivalent to 17,094 euros per year. While the Government determines each year the update to this minimum amount, the wages that are above it depend mainly on collective bargaining agreements, individual arrangements, and the conditions agreed with companies.
The evolution of the SMI helps explain this phenomenon. In 2018, the minimum wage was 735.90 euros per month, compared with the current 1,221 euros, which represents an increase of approximately 66% over eight years. This increase has improved pay for workers with lower wages, but it has also reduced the gap with certain professional categories whose salaries have grown at a slower pace. The result is what is known in labor economics as wage compression, a situation in which differences between different pay levels narrow.
Nevertheless, for the minimum wage to approach certain payrolls does not mean that all workers are being paid practically the same. Wage differences remain considerable between sectors, occupations, and companies. The problem appears especially in those jobs where the collective agreement wage tables offer a reduced separation between categories or where the pay improvements from experience and responsibility have been limited.
The minimum wage has risen by 66% since 2018, but not all salaries have followed the same pace
In February, the Government approved an increase of the 3.1% of the interprofessional minimum wage for 2026, which went from 1,184 to 1,221 euros per month in 14 installments. The measure, agreed with CCOO and UGT, has retroactive effects from January 1 and involves an increase of 518 euros per year compared with the previous year’s figure.
The increase forms part of a trajectory of accumulated increases since 2018, when the SMI stood at 735.90 euros per month. In 2022 it reached 1,000 euros, in 2023 it rose to 1,080, in 2024 it arrived at 1,134 and in 2025 it rose to 1,184 euros. The accumulated increase exceeds 485 euros per month in 14 payments, an evolution that has not been automatically applied to all salaries negotiated above the minimum.
The explanation lies in the operation of labor legislation. Article 27 of the Workers’ Statute requires ensuring that no full-time worker receives less than the legal minimum, but it does not establish that all higher salaries must increase in the same proportion. Therefore, a person who already earns 1,500 euros per month does not have an automatic right to receive a 3.1% increase simply because the Government has raised the SMI.
The pay increases for these workers depend on what is set out in their collective bargaining agreement, the salary review clauses, and the specific agreements they may reach with the company. This difference between an update fixed by law and another subject to negotiation is one of the main reasons why the wage floor can advance faster than certain professional salaries.
Why a worker with ten years of experience can earn almost the same as one newly hired
Salary compression is clearly seen when comparing the compensation of workers with different seniority. Imagine, for example, a person who in 2018 earned 1,150 euros gross per month in 14 payments, an amount that at the time exceeded the minimum wage by more than 414 euros. If over the following eight years their salary had increased to 1,300 euros per month, the difference with the 2026 SMI would be only 79 euros per payment.
This is an illustrative example, not a statistic about the overall labor market, but it helps to understand how the wage gap can narrow even when the worker has received pay raises. Their nominal compensation would have grown, but the minimum wage would have done so at a faster pace, until it was positioned very close to their current income.
This situation can especially affect workers in intermediate categories, employees with additional responsibilities, or professionals who have been performing similar functions for years without significant pay promotions. It can also occur when new contracts must be adapted to increases in the SMI, while the earnings of those who were already above the minimum change barely.
However, seniority does not, by itself, create a universal right to earn more every year. Article 25 of the Workers’ Statute establishes that the economic promotion linked to the work performed will take place in the terms set by the collective bargaining agreement or the individual contract. This means that the so-called trienniums, five-year periods, or other supplements for years of service do not necessarily exist in all jobs and depend on the applicable regulation.
Collective bargaining and inflation also influence the wage gap
The differences between the growth of the SMI and that of professional wages are related to the evolution of collective bargaining agreements. According to the latest available data from the Ministry of Labour, for September 2026, the average wage increase agreed in collective bargaining was 3.05%, a figure very close to the increase in the minimum wage approved for this year.
However, this coincidence in 2026 does not eliminate the differences accumulated during previous years. It also does not mean that all workers covered by collective bargaining agreements have received a 3.05% raise, since this is an average that groups sectors and companies with very different conditions.
By September, it had been recorded 3,038 collective bargaining agreements with economic effects in 2026, which covered more than 9.3 million workers. Of these, 701 had been signed during the year itself, with average increases of 3.61%, while the remaining 2,337 came from previous years and contemplated increases of 2.91%.
To this is added the effect of inflation. Although a worker receives a wage increase, they can lose purchasing power if prices grow above their salary. Therefore, it is possible that a person earns more euros than a few years ago, has less capacity to buy, and at the same time sees how the gap between their compensation and the minimum wage narrows.
According to work statistics, an important part of collective agreements does not include wage review clauses that would allow automatic compensation for deviations in inflation. This means that the recovery of purchasing power depends on new negotiations and is not guaranteed for all workers.
Wage supplements and seniority: why you do not always get paid more when the SMI goes up
Another aspect that explains the situation is the wage compensation and absorption mechanism, regulated in Article 26.5 of the Workers’ Statute and developed for 2026 in Royal Decree 126/2026.
The legislation allows, within certain limits and depending on the applicable conditions, to compare the total annual salary that a person already receives with the new legal minimum. This means that a company does not necessarily have to add each increase in the SMI in full to the base salary and keep all the supplements it was already paying unchanged.
For example, if a person receives a base salary below the minimum, but receives certain wage supplements that raise their annual remuneration above the 17,094 euros, it may be that they are not entitled to an effective increase as a consequence of the new amount of the SMI. The possibility of compensating or absorbing those items will depend on their nature and on the rules established by legislation and the collective bargaining agreement.
Not all payroll items can be treated in the same way. Wage supplements must be distinguished from non-wage amounts intended to compensate expenses, such as certain indemnities or reimbursements. In addition, collective agreements may establish specific conditions that prevent absorbing certain supplements or that guarantee separate increases to the base salary.
This issue is especially relevant for workers who receive bonuses for seniority, productivity, or certain characteristics of their position. The existence of these items does not automatically guarantee that each increase in the minimum wage will translate into additional improvement in the payroll.
The Government and the unions agreed during the negotiation of the SMI for 2026 to address a regulation intended to prevent increases in the minimum wage from being neutralized through the absorption of certain supplements. However, the Royal Decree that set the amount for 2026 expressly maintains the rules for compensation and absorption, so any change must be examined in accordance with the regulations that are effectively applicable.
Is it happening across all of Spain? What the INE data say about wages
The evolution of the minimum wage has coincided with growth in average wages, although official data show that pay differences continue to be significant.
According to the latest Annual Wage Structure Survey of the National Statistics Institute (INE), corresponding to 2024 and published in May 2026, the average annual wage in Spain reached 29,540.26 euros, 5.3% higher than the previous year. However, this figure does not necessarily represent the most typical salary, because the highest wages influence the average.
The median wage, which divides workers into two halves according to their income, was 24,497.17 euros per year, while the most frequent wage was 16,520.18 euros, an amount close to the minimum wage in force in that year. The INE also found that 29.5% of employees had annual income between 16,000 and 23,000 euros.
These data show that there is a significant concentration of workers in the lower wage brackets, although they do not allow the conclusion that all of that population is affected by wage compression compared with colleagues with more seniority. To demonstrate this, it would be necessary to compare the remuneration of people with equivalent conditions and roles over time.
The differences also vary between economic activities. In 2024, hospitality recorded an average annual wage of 17,653.42 euros, compared with 57,931.81 euros in the electricity, gas and air conditioning supply sector. This gap reflects that the impact of minimum wage increases is very different depending on each sector’s wage structure.
Is the company obligated to raise your salary if it gets close to the minimum wage?
The company is required to ensure that the worker’s salary reaches the applicable legal minimum for their working time, but it does not have to maintain a specific distance from the SMI merely because they have accumulated years of experience.
If a person works full-time and their computable salary compensation does not reach 17,094 euros gross per year, the company must adjust it up to the required minimum. In contrast, if it already exceeds that amount, there is no general right to receive a proportional increase to the rise in the SMI, unless this is established by the collective bargaining agreement, the contract, or another applicable rule.
The minimum salary of 1,221 euros in 14 payments with a payroll distributed over 12 monthly installments must also not be confused. If the extra payments are prorated, the minimum amounts to 1,424.50 euros gross per month for 12 months. To check whether the regulations are being complied with, it is necessary to compare homogeneous amounts, taking into account working time and annual remuneration.
Workers who believe that their wages have become too close to those of lower categories can review the salary tables in their collective bargaining agreement to check whether the differences for professional classification, seniority supplements, and the agreed conditions are being respected. Proximity to the minimum salary, by itself, does not constitute an irregularity, but it can justify a review when there is a failure to comply with the collective bargaining agreement or when payroll concepts have been applied incorrectly.
Why the gender pay gap can continue to be reduced in the coming years
The convergence between the minimum wage and certain professional payments raises a debate about how to ensure that improvements to the lowest salaries do not go hand in hand with relative stagnation in the upper categories.
The increase in the SMI is intended to improve the income of the worst-paid workers and reduce working poverty. However, its effect on the overall wage structure depends on companies’ decisions and collective bargaining. If higher wages grow at a similar pace, the differences remain; if they grow more slowly, they narrow.
Salary compression is not necessarily negative in all its effects, since it can reduce pay inequalities. The problem arises when differences in experience, training, roles or responsibilities cease to be reflected in the salary scales of certain sectors, especially if agreements are not updated at the same pace.
For those who have been in a company for years, the key is to check what part of their salary depends on the law and which part on collective bargaining. The minimum wage establishes a guarantee for all full-time workers, but it does not automatically set the evolution of higher remuneration. That is why a person may have received several pay raises during their professional career and find that, despite this, they are paid closer and closer to the legal minimum.