{"id":54711,"date":"2025-11-24T17:00:00","date_gmt":"2025-11-24T16:00:00","guid":{"rendered":"https:\/\/www.11onze.cat\/?p=54711"},"modified":"2025-11-07T09:16:10","modified_gmt":"2025-11-07T08:16:10","slug":"less-uuro96-on-your-payslip","status":"publish","type":"post","link":"https:\/\/www.11onze.cat\/en\/magazine\/less-uuro96-on-your-payslip\/","title":{"rendered":"\u2212\u20ac96 on your payslip: why?"},"content":{"rendered":"
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When you receive your payslip and notice that nearly a hundred euros are missing each month, it\u2019s natural to ask: where is that money going, and why is it increasing if taxes haven\u2019t been raised?<\/b><\/h3>\n

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The answer is less visible than it seems. It\u2019s called \u201ccold progressively\u201d, and <\/span>it\u2019s the silent tax hike that occurs when the government fails to update<\/b> income tax brackets (IRPF) in line with inflation.<\/span><\/p>\n

The IRPF withholding is the part of your salary that your company pays directly to the tax office on your behalf<\/b>. It\u2019s not a new tax \u2014 it\u2019s an advance payment of what you\u2019ll declare later on your annual income tax return. That means each month you\u2019re lending money to the State, which may or may not refund it, depending on your personal situation. <\/span>These funds don\u2019t go specifically to pensions or any concrete service: they flow into the State\u2019s general treasury, from which all public spending <\/b>\u2014 including pensions \u2014<\/span> is financed<\/b>.<\/span><\/p>\n\n <\/div>\n <\/div>\n <\/div>\n<\/div>\n\n\n

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Example of a real payslip showing how deductions reduce
\nthe gross salary by \u20ac427 per month.<\/span><\/p>\n\n <\/div>\n <\/div>\n <\/div>\n <\/div>\n <\/div>\n <\/div>\n <\/div>\n<\/div>\n\n

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So far, so good. The problem arises when your salary increases to offset inflation \u2014 say, by 4 % \u2014 and suddenly your tax withholding also increases. You\u2019re not wealthier: <\/span>the tax system simply isn\u2019t adjusted to the real price level<\/b>.<\/span><\/p>\n

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IRPF: a progressive tax\u2026 frozen in time<\/b><\/h3>\n

The IRPF is progressive, yes: <\/span>the more you earn, the higher percentage you pay<\/b>. But this progressively gets distorted when brackets aren\u2019t updated for inflation. A nominal salary increase \u2014 without real purchasing power gain \u2014 pushes you into a higher bracket, making you pay more for earning the same or even less.<\/span><\/p>\n\n <\/div>\n <\/div>\n <\/div>\n<\/div>\n\n\n

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A worker going from \u20ac20,000 to \u20ac21,000 to offset inflation ends up paying \u20ac95
\nmore in annual IRPF without improving purchasing power. (<\/span>Source:<\/b> INE)<\/span><\/p>\n\n <\/div>\n <\/div>\n <\/div>\n <\/div>\n <\/div>\n <\/div>\n <\/div>\n<\/div>\n\n

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According to the <\/span>Fedea<\/span><\/a> (Foundation for Applied Economics Studies), failing to adjust tax brackets to inflation costs <\/span>the average family \u20ac736 per year<\/b>. And <\/span>Funcas<\/span><\/a> (Foundation of Savings Banks) estimates that half of the IRPF revenue growth between 2019 and 2023 <\/span>comes from this inflation effect on stagnant real wages<\/b>. In other words: your salary rises by 4 %, prices by 4 %, yet you pay 6 % more to the tax office. The perfect trap.<\/span><\/p>\n

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Inflation: the silent ally of the Treasury<\/b><\/h3>\n

When prices rise, so do tax revenues. <\/span>VAT, for instance, is applied to higher prices: if a purchase goes from \u20ac100 to \u20ac110, the 21 % VAT also increases<\/b>. That happens in millions of transactions every day.<\/span><\/p>\n

According to data from the <\/span>Spanish Tax Agency,<\/span><\/a> total tax revenue in 2022 hit a record \u20ac255.463 billion, 14 % more than the previous year<\/b>. No new taxes, no rate hikes \u2014 just inflation. Economists call this the \u201cinvisible tax of inflation\u201d: a mechanism that collects more without any parliamentary approval.<\/span><\/p>\n

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Real wage vs. nominal wage: the loss of purchasing power<\/b><\/h3>\n

Many workers have seen their salaries rise by 3\u20134 %, <\/span>but<\/b> if inflation is 5 %, the real outcome is negative<\/b>. You earn more, but you can buy less.<\/span><\/p>\n

According to INE (Spain\u2019s National Statistics Institute), <\/span>average purchasing power has fallen 6.7 % since 2020, while IRPF revenue has risen by over 20 %<\/b>. In other words: wages rise 4 %, prices 4 %, but you pay 6 % more in taxes.<\/span><\/p>\n

This combination is devastating. <\/span>It shows Spaniards have less purchasing power, higher taxes, and lower household savings<\/b>. A formula that punishes middle and working-class families.<\/span><\/p>\n

At La Pla\u00e7a, <\/span>we\u2019ve already explained<\/span><\/a> that a living minimum wage in the Barcelona area should be around \u20ac1,322 per month, well above the national minimum wage. <\/span>This wage gap explains why inflation hits working households hardest<\/b> and drastically reduces their saving capacity.<\/span><\/p>\n\n <\/div>\n <\/div>\n <\/div>\n<\/div>\n\n\n

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Real wage distribution in Spain: most workers earn well
\nbelow the average salary. (<\/span>Source:<\/b> INE)<\/span><\/p>\n\n <\/div>\n <\/div>\n

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Wages haven\u2019t kept up with prices since 2020. (<\/span>Source: <\/b>INE)<\/span><\/p>\n\n <\/div>\n <\/div>\n

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Peak in 2022 and return to normal levels in 2024. (<\/span>Source<\/b>: INE)<\/span><\/p>\n\n <\/div>\n <\/div>\n <\/div>\n

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Europe: three models, three outcomes<\/b><\/h3>\n

In Europe, there are <\/span>three different<\/b> approaches:<\/span><\/p>\n