[Spain] New pension rule will reduce salaries from 2026

From 2026, the majority of workers in Spain will take home a bit less each month as a result of a new measure tied to the country’s pension system, EuroWeekly News reports.

The change is part of the full rollout of the Intergenerational Equity Mechanism (MEI), a reform designed to reinforce Spain’s pension reserve fund and secure the future of retirees.

The Spanish government reportedly insists that it is a necessary step to protect future pensions. Many employees will soon notice the difference in their payslips. In practice, the new deduction could mean up to €95 less per year, depending on salary.

The MEI will appear on a payslip as a small percentage, calculated from the part of employees’ salaries used for retirement contributions. Employees and employers will share the cost.

From January 2026, the total contribution will be 0.9 per cent of a worker’s salary, with 0.75 per cent paid by the employer and 0.15 per cent by the worker. This contribution will gradually increase each year until 2029, when it reaches 1.2 per cent in total (1 per cent employer, 0.2 per cent employee).

For someone earning €28,000 a year, the annual deduction will reportedly be around €42. For those on the maximum contribution base - approximately €63,180 per year - the deduction rises to about €94.77 annually.

So, while the reform affects everyone equally, those with higher salaries will take a slightly bigger hit to their take-home pay.

The MEI is not a new pension right, so this money won’t count towards increasing an employee’s future pension. Instead, it goes directly into the Reserve Fund, which acts as a financial cushion for the entire system.

Employees don’t need to take any action to activate the MEI. The Social Security system will handle it automatically, and employers will apply it directly to payrolls from January 2026.

When that time comes, employees across Spain will reportedly notice a slight but noticeable drop in their net salary. According to the government, this is a modest, fair contribution that helps guarantee pensions for future retirees. Officials describe it as a ‘collective effort’ to balance the system across generations and ensure that the younger workers of today don’t face the prospect of a much larger cost tomorrow.

Source: EuroWeekly News

From 2026, the majority of workers in Spain will take home a bit less each month as a result of a new measure tied to the country’s pension system, EuroWeekly News reports.

The change is part of the full rollout of the Intergenerational Equity Mechanism (MEI), a reform designed to reinforce Spain’s pension reserve fund and secure the future of retirees.

The Spanish government reportedly insists that it is a necessary step to protect future pensions. Many employees will soon notice the difference in their payslips. In practice, the new deduction could mean up to €95 less per year, depending on salary.

The MEI will appear on a payslip as a small percentage, calculated from the part of employees’ salaries used for retirement contributions. Employees and employers will share the cost.

From January 2026, the total contribution will be 0.9 per cent of a worker’s salary, with 0.75 per cent paid by the employer and 0.15 per cent by the worker. This contribution will gradually increase each year until 2029, when it reaches 1.2 per cent in total (1 per cent employer, 0.2 per cent employee).

For someone earning €28,000 a year, the annual deduction will reportedly be around €42. For those on the maximum contribution base - approximately €63,180 per year - the deduction rises to about €94.77 annually.

So, while the reform affects everyone equally, those with higher salaries will take a slightly bigger hit to their take-home pay.

The MEI is not a new pension right, so this money won’t count towards increasing an employee’s future pension. Instead, it goes directly into the Reserve Fund, which acts as a financial cushion for the entire system.

Employees don’t need to take any action to activate the MEI. The Social Security system will handle it automatically, and employers will apply it directly to payrolls from January 2026.

When that time comes, employees across Spain will reportedly notice a slight but noticeable drop in their net salary. According to the government, this is a modest, fair contribution that helps guarantee pensions for future retirees. Officials describe it as a ‘collective effort’ to balance the system across generations and ensure that the younger workers of today don’t face the prospect of a much larger cost tomorrow.

Source: EuroWeekly News