In Spain, there may be withholding or tax limitations applied to employees' scheduled payments of certain benefits as part of compensation in kind.
These limits are to ensure that employees receive a minimum of their salary in monetary form. Therefore, we withhold a certain balance to guarantee the payment of certain benefits such as Health Insurance, Pension Plans, Childcare, etc.
These limits are:
- Not to exceed 30% of your gross salary as a result of receiving salary in kind.
- Your net salary received cannot be less than the minimum interprofessional salary (SMI).
These limits serve to ensure:
- Balance between the money consumed in benefits and your salary. They prevent you from spending all your salary on social benefits.
- Guarantee a minimum payment of taxes due to you.
- Management of tax obligations and avoid future tax problems.
A scheduled payment is a consumption of money that is made periodically over time; for example, the payment of a Day Care or Health Insurance.
In the case of payment in kind, it refers to non-monetary benefits that an employee receives periodically as part of his or her compensation. These payments are repeated at regular intervals, such as monthly or annually, over a given period of time.