Spain vs Italy: Salary Comparison 2026

Spain and Italy are the two large Mediterranean economies that people most often compare when relocating within southern Europe. Both have progressive tax systems, high social contributions, and some of Europe's most generous special tax regimes for new residents. Here is how your paycheck compares in 2026.

Net salary under standard taxation

Figures assume a single employee with no children, no special regime, working in Madrid (Spain) or Milan (Italy). Annual totals -- the monthly breakdown is discussed separately below.

Spain offers slightly better take-home pay at every income level. The gap is modest -- roughly 800 to 2,200 EUR per year depending on income -- but consistent. Italy's higher social contributions are the main driver.

IRPF vs IRPEF: the tax structures

Spain: IRPF (Impuesto sobre la Renta de las Personas Fisicas)

Spain's income tax is split between the state and autonomous community levels. The state brackets for 2026 are: 19% on the first 12,450 EUR, 24% from 12,450 to 20,200 EUR, 30% from 20,200 to 35,200 EUR, 37% from 35,200 to 60,000 EUR, 45% from 60,000 to 300,000 EUR, and 47% above 300,000 EUR. Autonomous communities (like Madrid or Catalonia) add their own rates, which can vary the effective rate by 1-3 percentage points.

Social security contributions for employees total roughly 6.35-6.47% of gross salary, capped at a maximum base of about 56,646 EUR in 2026.

Italy: IRPEF (Imposta sul Reddito delle Persone Fisiche)

Italy's income tax brackets for 2026 are: 23% on the first 28,000 EUR, 35% from 28,000 to 50,000 EUR, and 43% above 50,000 EUR. Regional (addizionale regionale, 1.23-3.33%) and municipal (addizionale comunale, 0-0.8%) surcharges add to the effective rate.

Italian social security contributions for employees run about 9.19-10.49% of gross salary -- significantly higher than Spain's employee-side burden. This is the primary reason Italy produces lower net pay despite having similar income tax rates.

14 payments vs 13 payments

One of the most distinctive features of both countries is how annual salary is distributed across the year:

Spain: 14 payments. Most Spanish employment contracts split the annual gross salary into 14 payments rather than 12. Employees receive their normal monthly salary plus two "extra payments" (pagas extraordinarias), typically in June and December. A 42,000 EUR annual salary means 3,000 EUR gross per month, not 3,500 EUR. Some companies offer the option to "prorate" these into 12 equal monthly payments instead.

Italy: 13 payments. Italian contracts typically split the annual salary into 13 payments, with the extra payment (tredicesima) arriving in December. Some sectors and collective agreements include a 14th payment (quattordicesima) as well, particularly in retail, tourism, and certain manufacturing sectors. A 39,000 EUR annual salary means 3,000 EUR gross per month.

Special regimes for new residents

Both countries offer attractive flat-tax regimes to attract talent from abroad. These regimes can dramatically change the comparison.

Spain: Beckham Law (Ley Beckham)

Named after David Beckham, who was among the first to benefit, this regime allows qualifying new residents to pay a flat 24% income tax on Spanish-sourced employment income up to 600,000 EUR (and 47% on the excess) for 6 years. To qualify, you must not have been a Spanish tax resident in the 5 years prior to arrival and must move to Spain for work under a Spanish employment contract.

At 80,000 EUR gross, the Beckham Law can save roughly 6,000-8,000 EUR per year compared to standard IRPF rates.

Italy: Impatriate regime (Regime Impatriati)

Italy offers a regime that exempts 50% of employment income from taxation (previously 70%, reduced in recent reforms) for qualifying new residents who commit to staying at least 2 years. The exemption can last 5 years, extendable in certain cases. You must not have been an Italian tax resident for at least 2 of the 3 years prior to relocation.

At 80,000 EUR gross, the impatriate regime can reduce the effective income tax rate from roughly 35% to about 20%, saving over 10,000 EUR per year.

Under the special regimes, Italy's impatriate regime produces higher net pay than Spain's Beckham Law at most income levels, reversing the standard-taxation result.

Cost of living: comparable with regional nuance

Spain and Italy have broadly similar costs of living, but with meaningful city-level variation:

• Rent (1-bedroom, city center): Madrid 1,100-1,600 EUR vs Milan 1,200-1,800 EUR vs Barcelona 1,200-1,700 EUR vs Rome 900-1,400 EUR
• Groceries: Italy is roughly 5-10% more expensive, though quality differences (Italian produce markets) complicate direct comparison
• Dining out: Very comparable. A lunch menu del dia in Spain (12-16 EUR) vs a pranzo di lavoro in Italy (10-15 EUR)
• Transport: Monthly passes run 50-60 EUR in both Madrid and Milan
• Healthcare: Both have public healthcare systems. Spain's is considered slightly more accessible; Italy's varies significantly by region (north vs south)

The biggest cost difference is often housing. Milan is the most expensive city in both countries for rent, while Spanish cities outside Madrid and Barcelona offer excellent value. Italian cities outside Milan (Rome, Bologna, Naples) are generally cheaper than their Spanish equivalents.

Employer costs

For employers, both countries are expensive. Spanish employer social contributions run about 30-32% on top of gross salary. Italian employer contributions are even higher at approximately 30-33%. This is one reason both countries have relatively high unemployment rates -- the total cost of employing someone is significantly above the gross salary.

Bottom line

Under standard taxation, Spain edges out Italy on take-home pay by a small margin, mainly due to lower employee social security contributions. However, Italy's impatriate regime is currently more generous than Spain's Beckham Law, making Italy the better choice for qualifying new residents at higher salaries. Both countries offer excellent quality of life, warm climates, and world-class food -- the financial difference between them is unlikely to be the deciding factor for most people.