IRPF is Spain's Personal Income Tax. It applies to the annual income of residents in Spain. For autónomos, this means the net profit you make from your business activities is subject to IRPF. The tax is progressive, which means higher earners pay a larger percentage of their income in tax.
This system is structured into "bands" or tramos. Each portion of your income is taxed at or a different rate. It's a common misconception that your entire income is taxed at the single rate of the highest band you fall into. Instead, only the amount of income within each specific band is taxed at that band's rate.
IRPF general tax bands for 2025
The Spanish government sets the IRPF tax bands, which are divided into a state portion and a regional portion. While the state bands are uniform across the country, each autonomous community can modify its portion. This means your final tax rate can vary depending on where you live.
So the exact rates vary depending on where you live, but the figures below represent approximate averages across the country.
How to calculate your IRPF
Let’s calculate IRPF for someone earning €40,000 annually. This figure represents the taxable base after deductions, such as social security contributions.
- First Band: €12,450 taxed at 19% = €2,365.50
- Second Band: €7,750 (income between €12,451 and €20,200) taxed at 24% = €1,860
- Third Band: €15,000 (income between €20,201 and €35,200) taxed at 30% = €4,500
- Fourth Band: €4,800 (remaining income) taxed at 37% = €1,776
Total IRPF = €2,365.50 + €1,860 + €4,500 + €1,776 = €10,501.50
Effective tax rate: 26.25% (€10,501.50 ÷ €40,000), not the 37% of the highest band reached.
IRPF withholding on invoices
As an autónomo, you'll also deal with IRPF through withholdings (retenciones) on your invoices. When you issue an invoice to another business or professional within Spain, you may need to include an IRPF withholding. This is essentially an advance payment of your income tax.
The standard withholding rate is 15%. For new autónomos, there is a reduced rate of 7% that can be applied during the first year of activity and the following two calendar years.
This withheld amount is paid directly to the tax agency (AEAT) by your client on your behalf. When you file your annual tax return, the total amount you've paid through these withholdings is deducted from your final tax bill. If you've paid more through withholdings than you owe, you'll receive a refund.
Streamline your tax management
Keeping track of income, expenses and tax obligations can be one of the biggest challenges for freelancers. A clear system from day one helps turn these duties into a manageable routine. This is where a good invoicing and accounting tool becomes essential.
For example, a platform like Facturaz simplifies this entire process. You can create Verifactu-compliant invoices that automatically calculate and apply the correct IRPF and IVA. When it's time to file your quarterly taxes, the software generates the necessary modelos, like Model 130 (for your quarterly IRPF payments) and Model 303 (for IVA), pulling data directly from your invoices and expenses. This reduces the risk of errors and saves you hours of administrative work.
Using such a tool gives you a real-time overview of your finances, including an estimate of your tax liability. This control over your finances allows you to plan better and avoid surprises when tax season arrives.
