How much tax do we pay?

In 2011 every Spaniard who has an income pays on average 1000 Euros tax per month. In other words, to pay his/her taxes to the government an average Spaniard works:

  • 2.17 days a week; or
  • 13 days a month; or
  • 5.2 months during the year.

How was this tax calculated?

The average gross salary per month for 2011 in Spain is calculated to be 2292 Euros.

The tax to be paid for 2292 Euros is 711 Euros with average tax rate of 30.03%.

Then the net income for 2292 Euros becomes 1581 Euros. But the story about the taxes did not end.

Every time when we buy something we pay value added tax (VAT). The base VAT rate in Spain is 18%. If we assume that we spend all our income (we eventually spend it by buying car or house). When calculate the 18% VAT on the net salary of 1581, the additional tax paid for VAT is 285 Euros. Now the total amount paid in tax sums up to 996 Euros which I have rounded to 1000 at the beginning.

Where does this money go?

The money paid in tax goes directly to the government’s budged. Then they are distributed to the public sector and services such as:

  • Free healthcare
  • Free/subsidized education
  • Police
  • Military/Army
  • Church
  • Public administration – such as people working at the town hall
  • Etc.

All of us pay tremendous amount of money to the government and to pay this money we essentially work for the government. Therefore, all of us should be acknowledged that when it comes time to use the services from the government we should insist for the best quality possible because we already paid a lot for it. It is pity that most civil servants do not realize their responsibilities to the people (tax payers) and abuse with their money as if they are nobody's and magically appeared from somewhere.

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