Does IRPF withholding sound familiar to you? It is something that everyone, whether it is from the payroll or because you make invoices to the company (or they do them from professional to professional) you are going to have. But, how much do they have to withhold from personal income tax?
If you want to know what the correct figure is and thus make sure that you are withholding your Income Tax account correctly, we will give you all the keys below.
Why do they withhold income tax from me?
You should know that income tax withholdings are small advances that are given to the Treasury for the Income Statement. In other words, it refers to money that is paid to the Treasury before the declaration is even filed in order to get closer to the final payment that you must pay (actually, there are times when you will pay more than what you have gone paying; and others on the contrary, that you have paid less).
How much do they have to withhold from personal income tax?
We must start from the basis that there is no maximum to withhold personal income tax. Although the minimum may be 15%, the truth is that there are companies where they withhold 19% from their payroll. And others where, at the request of the worker, 20, 25 or even 30% is withheld. Actually, as long as the minimum is reached, there is no problem, but you can voluntarily ask to pay more month by month to the Treasury for the income statement.
Now, the truth is that there are some tax brackets that establish what should be paid in personal income tax according to what you earn annually.
Personal income tax withholding brackets
Below we leave you a table in which you can see what is the applicable rate of withholding based on the income of 2023, which is the date of this article.
Thus, the table would be as follows:
| Income 2023 |
Applicable withholding rate |
|
| Up to 12.450 euros |
19,0% |
|
| From 12.450 euros to 20.199 euros |
24,0% |
|
| From 20.200 euros to 35.199 euros |
30,0% |
|
| From 35.200 euros to 59.999 euros |
37,0% |
|
| From 60.000 euros to 299.999 euros |
45,0% |
|
| Starting from euros 300.000 |
47,0% |
|
Is it mandatory to retain IPRF?
Well, the truth is that yes. Whether you are self-employed invoicing a company, a professional making an invoice to another professional, or a worker with a payroll in a company, everyone is obliged to make a withholding.
However, there are situations in which there may be a reduction or even exemption from it. For example, when it is a withholding on work income that does not exceed an annual amount depending on the number of children and the person's situation.
Variables that influence personal income tax withholdings
Let's focus on payroll. And in this case, the withholding of personal income tax will depend on some factors that you should take into account. These are:
The personal and family situation
With this we are referring to both the personal situation of that person, their marital status, age... and the family situation, that is, if they have children or elderly people in their care, if there is a disability, etc.
Yes, people with children or dependents pay less than those without.
That is why the company must know the situation of the person to apply more or less withholding.
Contract duration and income
Another of the variables that influences when it comes to withholding personal income tax on payroll is this. On the one hand, the temporality or not of the employment contract. In this way, if it is a temporary contract, the withholding is much lower than in an indefinite one.
The other point would be the salary you receive. This will influence the section in which you find yourself in such a way that you should know if there is a higher or lower withholding for personal income tax.
How much to withhold personal income tax
In the event that you are self-employed, the truth is that answering this question is much easier. And it is that in this case they have a fixed withholding, established at 15%.
In other words, if you are going to invoice a company, in addition to adding VAT, you have to remove the 15% withholding from that base that the invoice has and then add VAT and subtract personal income tax and it will give you the exact value of what they have to pay you.
Now, if you are a new self-employed person (you have less than two years of activity), then the withholding can be 7%. It is voluntary, which means that if you want to apply 15% there would be no problem.
The Treasury calculator to find out how much they have to withhold from personal income tax
In case you don't know, the Tax Agency has a calculator available to workers so that they can determine how much personal income tax must be withheld based on the personal situation and salary of each one.
However, taking into account that the fiscal measures have changed in February, it is necessary to check that the calculator that they offer is really the correct one (and not the one for January).
Is the answer now clearer to how much they have to withhold from personal income tax?