Mallorca wage rises: workers get just €48–€56
For every €100 a Mallorca business spends on higher wages, workers receive only €48 to €56 after deductions, Pimem says. The Mallorca employers’ federation set out the figures in Palma on Thursday, drawing on an analysis of real payslips from hospitality, metalworking and cleaning. The remaining €44 to €52 goes on personal income tax and social security contributions.
The report, prepared by the Observatori de Pime de Catalunya and shared with Pimem, examined nine employees. It found that a business must take on an extra cost of between €180 and €210 for a worker to get €100 more in net pay.
Pimem blames so-called fiscal drag, where pay rises meant to offset inflation push people into paying more tax while income-tax bands, allowances, reductions and deductions stay frozen. Workers can therefore pay more tax without gaining spending power.
Among the nine cases, the effective income-tax rate rose by between 1.3 and 3.2 percentage points, despite no change in personal or family circumstances. That meant between €278 and €955 more income tax a year.
Gross pay in the cases studied rose 22.1% between 2020 and 2025, matching accumulated inflation. Yet net purchasing power still fell by between 2.8% and 4%, the report says.
Pimem says employers would have to raise wages by a further four to 11 percentage points above inflation to prevent that loss. It puts the added annual cost at between €1,142 and €3,315 per worker.
The Mallorca federation and its Catalan counterpart are calling for regular, transparent reviews of income tax, including all of its parameters, to stop the tax burden rising simply because they have not been updated.
Source: Europa Press / Mallorca.com