Exempt amount: Limits

Compensation for dismissal or dismissal of the worker, with the following limits:

• Up to the amount established as mandatory in the Workers' Statute, in its implementing regulations, where applicable, in the regulations governing the execution of sentences .

  However, it should be noted that article 7.e) of the Personal Income Tax Law establishes, as will be seen later, an exception in the case of collective dismissals for which an exemption is provided. greater than the compensation amount established as mandatory in the Workers' Statute.

  Now, to declare compensation for unfair dismissal or dismissal up to the amount established as mandatory in the Workers' Statute exempt, we must differentiate between dismissals that occurred until July 7, 2012 and those that occur after said date:

  • For dismissals that occurred until July 7, 2012 , severance payments are exempt when the employer recognizes it at the time of communication of the dismissal or at any other time prior to the conciliation act. , provided that the amount of compensation does not exceed what would have corresponded if it had been declared inadmissible, and it does not involve terminations by mutual agreement within the framework of collective incentive plans or systems. (twenty-second transitional provision of the Personal Income Tax Law ).
  • In dismissals that occurred after July 7, 2012 , only compensation recognized in a conciliation act or in a judicial resolution is exempt.

  Precision: On November 13, 2015, the consolidated text of the Workers' Statute Law came into force, approved by Royal Legislative Decree 2/2015, of October 23 ( BOE of 24). All references to the Workers' Statute included in this Chapter must be understood as being made to the aforementioned consolidated text.

• However, the amount of the exempt compensation will have a maximum limit of 180,000 euros . Therefore, although the total compensation does not exceed what is stipulated in the Workers' Statute or its implementing regulations, if it exceeds 180,000 euros, the excess will be subject to tax, with the exceptions indicated below (twentieth transitional provision second.3 Law Personal Income Tax ).

  This limit of 180,000 euros will not be applicable:

  • To compensation for dismissals or terminations that occurred prior to August 1, 2014.

  • To compensation for dismissals that occur after that date when they arise from an approved employment regulation file, or a collective dismissal in which the opening of the consultation period to the labor authority has been communicated , prior to August 1, 2014 .

    Note: When the amount of compensation received exceeds the amount that, in each case, is mandatory or the maximum limit of 180,000 euros, the excess is not exempt from Personal Income Tax and must be declared as personal work income, without prejudice to the applicable, where applicable, reduction legally established for work income generated in a period of more than two years.