The Tax Agency has made available to taxpayers the online service for calculating the withholdings of personal work for the year 2016 after the entry into force on January 1 of the second part of the reduction of Personal Income Tax.
With this tool,taxpayers can calculate the type of withholding and the corresponding amount according to the remuneration that will be received this year, as established in article 80 of the Personal Income Tax regulations. Along with the gross annual remuneration we must indicate in this service our personal and family situation, and in this way we can know the withholding that our company will apply to us.
After bringing forward to July 1, 2015 the second part of the tax reduction that was to enter into force this year 2016, on January 1 a new personal income tax rate by which all tax brackets will be reduced between half a point and one point compared to the current rate.
Having advanced the reduction by half a year, the Ministry of Finance established a transitional rate to avoid that throughout 2015 there were two rates of the tax, which was applied between January and June and the new one that would have had to be applied between June and December.
This has forced the government to approve a new tariff for 2016, which will go from the minimum rate of 19% which is now 19.5%, for incomes below 12,450 euros to the marginal of 45% which is now 46%, for incomes over 60,000 euros per year.
the second tranche of the tax, for those incomes between 12,450 euros and 20,200 euros, will go to 24% from 24.5%, the third tranche,for incomes between 20,200 and 35,200 euros, will fall to 30% from 30.5% and fourth tranche for rents between 35,200 and 60,000 euros, will be reduced to 37% from 38%.