Ingrid runs the numbers on 60,000 € with two children
Ingrid Solberg is Norwegian, a nurse who has moved into hospital management, and she has been offered a post at a private clinic in Málaga for 60,000 € gross a year. She is moving with her two children, aged 8 and 11, who will live with her. A colleague told her to apply for the Beckham regime "because 24 % is always better". Ingrid, who is the kind of person who builds spreadsheets, asked us whether that was true for someone who does not earn a fortune.
It is not always true. The regime's 24 % is a flat rate applied to gross pay with almost nothing taken off. The ordinary scale starts very low and rises slowly, and it also takes off contributions, expenses and family allowances. On average salaries the two curves cross, and the crossing point depends on your personal circumstances.
Why 24 % is not compared with your marginal rate
The most common mistake is to compare 24 % with the rate of the top band you reach on the ordinary scale. The right comparison is between total tax bills. In the regime, article 93.2 of the IRPF Law (Spanish personal income tax) refers to the rules for non-residents, and article 24.1 of the IRNR Law (the Spanish non-resident income tax) takes the gross amount as the base, with no reductions. Social Security contributions are not deducted, nor the 2,000 € of other expenses under article 19, and neither the personal nor the family allowance is applied. Nor are there regional deductions for children, rent or other circumstances.
Under ordinary IRPF the opposite happens: net income deducts contributions and expenses, the scale is progressive, and the part of the base that corresponds to the personal and family allowance is taxed at zero in practice, because the scale applied to that allowance is subtracted from the tax.
Ingrid's calculation, step by step
Data: 60,000 € gross. Suppose her payslip shows 3,900 € of Social Security contributions; your real figure is on your payslip.
In the regime
- Base: the full 60,000 €.
- Tax: 60,000 × 24 % = 14,400 €.
Under ordinary IRPF, state portion
- Net income: 60,000 − 3,900 − 2,000 = 54,100 €.
- State scale in article 63 on 54,100 €: 4,362.75 € up to 35,200 €, plus 18,900 € at 18.5 %, which is 3,496.50 €. Total: 7,859.25 €.
- Personal and family allowance: 5,550 € for the taxpayer (article 57) plus 2,400 € for the first child and 2,700 € for the second (article 58) = 10,650 €. State scale on 10,650 €: 1,011.75 €.
- State tax: 7,859.25 − 1,011.75 = 6,847.50 €.
Regional portion
Each region approves its own scale and allowances, and we do not reproduce them here. So that we can compare, we use a working assumption: a regional scale identical to the state one. On that basis the regional portion would be another 6,847.50 € and the total 13,695 €.
Comparison: 13,695 € under the ordinary system against 14,400 € in the regime. On that assumption, the regime costs Ingrid more, about 705 € a year, and that is before counting any regional deductions she might be entitled to, which do not exist in the regime.
Where the lines cross
We have repeated the calculation with different salaries, always on two assumptions: contributions equal to 6.5 % of gross pay and a regional scale identical to the state one. These are assumptions for illustration, not figures for any particular region.
| Gross annual pay | Regime (24 %) | Ordinary, no children | Ordinary, two children |
|---|---|---|---|
| 40,000 € | 9,600 € | 7,745 € | Less than with no children |
| 52,000 € | 12,480 € | 11,896 € | Less than with no children |
| 57,500 € | 13,800 € | 13,799 € | Less than with no children |
| 60,000 € | 14,400 € | 14,664 € | 13,695 € |
| 66,000 € | 15,840 € | More than the regime | 15,771 € |
| 67,000 € | 16,080 € | More than the regime | 16,168 € |
On these assumptions, the crossing point for someone without children is around 57,500 € gross, and with two dependent children it rises to a little over 66,000 €. Below those points, the regime costs more than ordinary taxation. The question in the title does have an answer: with a salary under 60,000 € and no other circumstances, the regime will not normally pay off as far as the tax on your salary is concerned.
The real regional scale, your region's deductions, your exact contributions and whether the allowance for children is shared with the other parent all change the result. The table is there to show the mechanism, not to make the decision. Before filing or not filing Modelo 149, the form used to opt into the regime, the numbers have to be run with your own data.
What the tax on your salary leaves out
There are reasons to choose the regime even when the tax on employment income comes out a little higher, and all of them have to do with things other than the salary:
| Factor | Effect in the regime |
|---|---|
| Income from investments abroad | Stays out of the Spanish return unless it has a Spanish source |
| Modelo 720, the return declaring assets held abroad | No obligation to file while the regime lasts |
| Wealth tax | Territorial basis only: just assets located in Spain |
| Expected pay rises | The regime lasts for the year of the move and five more; the crossing point is looked at over several years |
If Ingrid had a portfolio in Norway yielding 20,000 € a year in dividends, the calculation would change completely: under the ordinary system those dividends would go into her Spanish savings base, and in the regime they would stay out. How Norway taxes them is something her adviser there has to confirm. In what happens to your income from abroad we explain it one item of income at a time.
Look at the horizon, not the first year
The decision is taken once, within the six months after you register, but you live with it for six tax years. A salary of 55,000 € today with a likely promotion to 80,000 € in two years may justify the regime even if the first year comes out slightly worse. And the reverse: if the family is going to grow or your region has generous deductions, the ordinary system may win every year.
If you opt in and it later turns out not to pay, there is the option of giving up the regime, but only in November and December, effective from the following year, and with no way back. It is not a comfortable safety net. If you have family members who could also join, the calculation gets one step more complicated, and we deal with it in extending the regime to your spouse and children.
How to work out your own figure
To compare you need four pieces of data: expected gross annual pay, the contributions on your payslip, the region where you live and your family situation. With those, both tax bills are calculated, the income from abroad that would be treated differently is added in, and the result is projected over six years. If you would rather we did it with you, you can send us the data through the Beckham form.
We will not give you an answer of the "it always pays" or "it never pays" kind, because no such answer exists. We will give you the result of your own numbers, with the assumptions in plain view, and the risk of each option.
Comparing the regime with ordinary taxation is the first step in the analysis described on the Salama Tax page on article 93.