Spanish workers spend the equivalent of 231 days paying taxes, study says

Spaniards had to wait until 20 August this year to reach the so-called Tax Freedom Day — the point at which, according to one think tank’s calculations, the average worker has earned enough income to cover their taxes and social security contributions.

According to a study by Fundación Civismo, a Spanish liberal think tank, the estimated burden was equivalent to 231 days in 2026, two more than last year. The foundation said the increase was not necessarily the result of explicit tax rises alone.

When Pedro Sánchez became prime minister in 2018, the foundation put the figure at 177 days, with Tax Freedom Day falling on 27 June. Since then, its estimated date has moved back by 54 days.

The foundation attributes the increase to income tax bands failing to keep pace with inflation, rising social security contributions, the return of some higher value-added tax (VAT) rates and new local levies. As a result, the foundation says workers are paying more of their income in taxes and contributions.

To calculate the tax burden, the foundation uses the total cost of employing an average worker, including contributions paid by both the employee and the employer. In its reference case, an employee earning a gross annual salary of €32,446 costs their employer €42,390.70 once employer contributions are included.

The worker receives an estimated €24,724.91 in net pay, while €17,665.79 — or 41.7% of the total employment cost — goes towards income tax and employer and employee social security contributions. This means that for every €100 spent on employing the worker, €58.30 reaches them as take-home pay.

This means that, for every €100 of labour cost, workers take home only €58.30.

The report also points out that workers can end up paying more income tax even though their wages have barely increased. This happens because the tax brackets have not been adjusted fully for inflation at the same pace as wages. This can push workers into higher tax bands even if their purchasing power has barely improved.

VAT and other regional and municipal taxes add to the estimated burden. Civismo calculates that the average worker pays around €2,213 in VAT each year, equivalent to almost 33 days of net income.

The study also includes regional and municipal levies such as the local property tax (IBI), vehicle tax and inheritance and gift taxes. According to Fundación Civismo, these and other charges that it groups together as “silent taxation” amount to approximately €4,110 a year, equivalent to more than two months of the model worker’s net income.

The estimated date of the Tax Freedom Day varies between Spain’s 17 autonomous communities because regional income tax rates, deductions and locally imposed taxes differ. According to the study, the Basque Country had the earliest date, on 14 August, followed by Madrid on 15 August. Catalonia and Extremadura recorded the latest dates, on 26 August.

However, Tax Freedom Day is not an official government measure and its methodology is disputed. Spanish newspaper El País quoted experts critical of the indicator, who also argued that the measure counts taxes as a cost without reflecting the healthcare, education, pensions and other public services they finance.

Spain’s official tax-to-GDP ratio provides a different comparison. It stood at around 38% in 2025, according to Eurostat data cited by the newspaper, up from 35.2% in 2019 but still below the levels recorded in several other large European economies.