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RANKED: Where are workers’ salaries highest and lowest in Spain?

While the latest figures reveal that Spain's average salary is €24,396 gross per year, there are huge differences in wages between Spain's 50 provinces. Here's where workers can expect to get paid most and least.

RANKED: Where are workers' salaries highest and lowest in Spain?
People earn the most amount in the Basque Country. Photo: ANDER GILLENEA / AFP

The latest figures made available from the Spanish government showed that Spaniards earned an average gross salary of €24,396 in 2019, 1.6 percent more than the previous year.

However, the most common salary earned was a lot less than this at just €18,490, according to the Annual Labor Structure Survey released on June 21st 2021 by Spain’s National Statistics Institute (INE).

According to El Economista, the professions that earn the highest annual salary are those that work in the supply of electricity, gas, steam and air conditioning (€52,162 on average), followed by financial services (€44,302) and communication and information jobs (€34,641). On the other end of the scale, those who work in the hospitality sector earned an average of €14,561, with those in administrative activities earning €17,107 and those in artistic professions €18,088 per year.

So, where in 2019 in Spain did people earn the highest gross annual salary and where did they earn the least? It seems that there’s a definite north-south divide when it comes to earnings, as eight of the top ten provinces are located in the northern half of the country.

Basque Country
Surprisingly it’s not in the provinces which are home to Spain’s two largest cities where residents earned the most, but in the northern region of the Basque Country. Here people earned an average of €28,032. Many people in the Basque Country are employed in industry and engineering. 

Note that the figures for the Basque Country are given as a whole as data has not been released for its three separate provinces.

Navarra
Bordering the Basque Country, people in Navarra earned the second-highest average salary at €26,604. People here work in similar professions to those in the Basque Country. The region’s capital of Pamplona is home to Spain’s annual San Fermin Festival or Running of the Bulls.

Madrid
People in Spain’s capital of Madrid earned the country’s third-highest salary at €25,904. While the salaries are still high compared to much of Spain, they are still considered low for Europe and low compared to the monthly rental prices in the city at an average of €848 per month. 

People in Madrid earned the third-highest salary in Spain in 2019. Photo: Julius Silver / Pixabay

Barcelona
And if Madrid comes in at number three, then it only makes sense that Spain’s second-largest city and its surrounding province come in next at €23,470 per year. This is expected given that both Catalonia and Madrid contribute the most to GDP. 

Ceuta
The two very surprising entries in the top five are Spain’s African enclaves of Ceuta and Mellia, which are also the only two areas in the top 10 that are located in the south of the country. Those in Ceuta earned an average of €22,287.

Melilla
Melilla, Spain’s other African enclave comes at number five. Its citizens earned an average of €20,972.

Burgos
The province of Burgos in Castilla y León comes in next, where residents earned an average of €20,867. 

Valladolid
Another province in Castilla y León, Valladolid comes in at number seven. Its residents earned an average of €20,689.

Asturias
Asturias comes in next with an average salary of €20,650. The northern region is known for its spectacular natural areas, including the Picos de Europa National Park, as well as its dairy products such as cheese and milk.

Zaragoza
The province which is the home to the capital of Aragón – Zaragoza is next on our list with an average salary of €20,572. 

Guadalajara
Located in the central region of Castilla-La Mancha, Guadalarja comes in next with an average salary of €20,523.

A Coruña
Galicia’s capital and its province of A Coruña is next, with an average of €20,385. As well as hospitality, here many people are employed in construction, commerce and professions that have to do with sea, such as fishing or boat building. 

Cantabria
Another northern Spanish region, those in Cantabria earned an average of €19,890. Cantabria is known for its seafood, natural sights, and wild coastline. Its capital is Santander, is also a big tourist destination, given that many ferries dock here from the UK. 

La Rioja
Spain’s wine country of La Rioja is next, where people earned an average salary of €19,747.

Many in La Rioja are employed in the wine industry. Photo: Jill Wellington / Pixabay

Tarragona
The province home to the biggest city in southern Catalonia is Tarragona. It’s known for its ancient Roman ruins and its and wide sandy beaches. People there earned an average of €19,738.

Soria
Situated in Castilla y León, Soria might not be very well known throughout Spain, but those that do make it there will be able to admire its medieval streets and Romanesque architecture. People there earned an average of €19,535.

Valencia
The capital of the Valencian Community and its surrounding province comes somewhere in the middle of our list, which is surprising given that the city of Valencia is Spain’s third-largest, behind Madrid and Barcelona. Here people earned an average of €19,313. 

Girona
Northern Catalonia’s most important province, Girona comprises the ancient city of the same name, as well as the area of the Costa Brava, which attracts many tourists each year. Here, people earned an average of €19,173 for the year. 

Balearic Islands
People in Spain’s Balearic Islands of Mallorca, Ibiza, Menorca and Formentera earned an average of €19,153. Many of its residents are employed in the hospitality sector, given the popularity of the islands as holiday destinations.

Palencia
Another little-known province in Castilla y León, those in Palancia earned an average of €18,895. 

León
The capital of Castilla y León and its province is next on our list, where residents earned an average of €18,842. 

Salamanca
And yet another of Castilla y León’s provinces is Salamanca, where residents earned an average of €18,647. The city of Salamanca is known for its stunning architecture and famous university. 

Castellón
In the Valencian Community’s northern-most province, people here took home an average of €18,576. The area’s biggest towns and most well-known towns are Castelló, Benicàssim and Peñíscola. Many people here are employed in hospitality or tourism. 

Lleida
The province of Lleida lies in the eastern part of Catalonia, but is not as well known as some of its other provinces and is not visited by mass tourism as some of its other provinces. Here people earned an average of €18,570 per year. 

Pontevedra
Located on the central Galician coastline, citizens in Pontevedra took home an average of €18,529 per year. 

Huesca
The province of Huesca lies just north of Zaragoza in the region of Aragón. Here, people earned an average of €18,330. 

Teruel
Another Aragónese province comes next on our list, but this time south of Zaragoza. Here people earned an average annual salary of €18,061. 

Lugo
Despite being located in northern Spain and the region of Galicia, people in Lugo only earned an average of €17,959. 

Segovia
Situated northwest of Madrid in the country’s Castilla y León region, those in Segovia earned an average of €17,939. 

The city of Segovia. Photo: NakNakNak / Pixabay

Ourense
Another Galician province on our list, those in Ourense earned an average of €17,614. 

Toledo
The province of Toledo may lie just south of Madrid, but its residents earned far less than their neighbours. Here, people earned an average of just €17,426. 

Las Palmas
The province of Las Palmas covers the eastern part of the Canary Islands, which includes the island of Gran Canaria and its capital, also called Las Palmas. Many people here are employed in tourism and earned an average of €17,350. 

Ávila
Another Castilla y León province, Ávila is located just north of Madrid, however, its residents earn a lot less here, with an average of €16,993. 

Murcia
The small region of Murcia is next on our list, where people earned an average of €16,828. 

Seville
Given that the province of Seville and its capital of the same name is also Andalusia’s capital and a popular tourist destination, it may be surprising that it comes pretty far down our list, with its citizens earning an average of just €16,816. 

Albacete
Located in Castilla-La Mancha, people living in the province of Albacete earned an average of €16,764. 

Zamora
Yet another Castilla y León province, those in Zamora earned an average of €16,735. 

Tenerife
The province of Tenerife comprises the western part of the Canary Islands. Like in the province of Las Palmas, many are employed in tourism but earned a lot less than their neighbours with an average of €16,649. 

Malaga
Andalusia’s Malaga province may be home to places such as Marbella and Puerto Banus – playgrounds of the rich and famous, but its citizens only earned an average of €16,527. 

Ciudad Real
Situated in the region of Castilla-La Mancha, those living here earned an average of €16,483. 

Alicante
Located in the Valencian Community and home to the most British residents in Spain, people are attracted to Alicante because of its beaches, great weather, and low cost of living. Those in this province earned an average of €16,467. 

Cádiz
One of the oldest cities in Europe, Cádiz and its province is located in southern Andalusia. Those living here earned an average of €16,390 for the year. 

Cuenca
Located in Castilla-La Mancha, Cuenca is known for its UNESCO World Heritage hanging houses or Casas Colgadas. Here, people earned an average of just €15,982. 

Granada
Residents in the Andalusian province of Granada earned an average of €15,982. While the city of Granada is its capital, this province is also home to the rural area of the Alpujarras, where many are employed in things such as farming or sheep shearing. But, its residents do get free tapas with every drink. 

Cáceres
Located in western Extremadura, those in Cáceres earned an average of €15,982. 

Córdoba
The Andalusian province of Córdoba may be known for its rich Moorish architecture and charming whitewashed houses, covered in flowers, but its residents certainly aren’t rich, having earned an average of just €14,602 for the year. 

Those in Cordoba earned some of lowest salaries in the country. Photo: Viktor Levit / Pixabay

Almería
Another Andalusian region that is popular with foreign residents is Almería. Here people earned an average of just €14,469. 

Badajoz
Located in the southwest region of Extremadura, those in Badajoz earned an average of €14,435. 

Huelva
Located in western Andalusia, close to the border with Portugal, many people in this province are employed in the agricultural industry. This is the second-worst place for salaries in the country at just €13,652 for the year. 

Jaén
People in Andalusia’s northern province of Jaén, earned the least amount in the whole country at just €13,450.

READ ALSO: EXPLAINED: How Spain plans to raise its minimum wage by as much as €250

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What you need to know about investing in index funds in Spain

Index funds are considered a safer and more passive way of investing for those with little financial knowledge. However, understanding what they are, the best funds available, and how they're taxed in Spain is key before investing your money.

What you need to know about investing in index funds in Spain

What are index funds?

According to a basic definition by Banco Santander, “index investment funds are collective investment undertakings whose investment policy strives to mimic a certain index.”

What does that actually mean? And what is being mimicked here? Let’s look at an example. An index fund tracking the Vanguard Global Stock Index, for example, will put together an asset portfolio that essentially mirrors, or is similar to, at least, the Vanguard portfolio, in terms of composition. 

So that means that if the Vanguard Index has any major changes in terms of portfolio makeup, the fund manager (more on the best of those in Spain below) changes your index fund to reflect that change.

Often in Spain index funds would be linked to the IBEX 35, Spain’s main stock exchange, but many people invest in regional or global funds too. Besides that, index funds basically function in the same way as other funds: the money in the fund is used to buy and sell assets to make profit.

Generally speaking, the benefits of index fund investing are their low cost, the little financial knowledge and time investment required from the investor, and their diversification. The drawbacks are the lack of downside protection when there are losses, the lack of choice in index composition, and the fact that your investments can’t ‘beat’ the market.

READ ALSO: The best high-yield savings accounts in Spain

How profitable can index funds be?

Owing to the fact that the entire point of index funds is to mimic a particular index, the way we think about profitability is slightly different than with other forms of investment.

In that sense, there’s really no such thing as a ‘good’ or ‘bad’ index fund based on its performance. How well the index fund performs is better thought of as how well it replicates the index it is supposed to be mimicking.

According to Rankia, a Spanish investment service and comparison site, index funds vary wildly in terms of returns, but compound annualised returns ranging from as low as -40 percent in the worst case examples to 55 percent profits in the best.

Obviously, how much you make in cash terms depends on the size of your original investment in the fund.

Can you invest in foreign index funds in Spain?

Yes, you can. In fact many people do, and fund managers often recommend doing so.

In Spain, the main fund managers that offer index funds include iShares, EBN Bank, Amundi, Vanguard, Pictet, Bankinter, Caixabank, BBVA, and Credit Suisse.

Which are the best index funds to invest in from Spain?

Most index funds are grouped on a regional basis, so there are several funds that mirror European markets, North American markets, the Pacific region markets, and so on, as well as broader global index funds.

According to Rankia, some of the best global index funds to invest in from Spain include:

Fidelity MSCI World Index Fund P-ACC-EUR
Total Expense Ratio (TER): 0.12 percent
3-year return: 11.73 percent

Vanguard Global Stock Index Fund EUR Acc
TER: 0.18 percent
3-year return: 11.63 percent

Amundi Index MSCI World – IE (C)
TER: 0.19 percent
3-year return: 11.51 percent

Vanguard ESG Developed World All Cap Equity
TER: 0.20 percent
3-year return: 9.29 percent

Vanguard Global Small-Cap Index Fund
TER: 0.29 percent
3-year return: 7.37 percent

Amundi Index FTSE EPRA NAREIT Global – AE (C)
TER: 0.34 percent
3-year return: 3.17 percent

How are index funds taxed in Spain?

Under the Spanish tax system, index funds are taxed as savings income as part of the IRPF (Spain’s income tax) and are included as capital gains and losses, as if they were any other type of stock market shares or investment product.

However, one of the advantages of index funds over other forms of investment is that if you sell one index fund in order to buy another, you don’t pay for the capital gains obtained because it is considered a transfer from one fund to another and is therefore exempt from taxation.

This makes it one of the best investment options if you want to get a higher return on your earnings via compound interest because you can take advantage of these capital gains to reinvest them instead of paying them in taxes.

As index funds in Spain are taxed in the same way as any other investment products that is subject to savings rates, they are taxed at the following rates:

19 percent for capital gains of less than €6,000

21 percent for capital gains between €6,000-€50,000

23 percent for capital gains in excess of €50,000

READ ALSO: Bank overdraft in Spain: What are the risks and penalties?

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