The file usually arrives with one headline: "the draft says I owe tax and I don't understand why". When we go into detail, we see the Article 20 LIRPF reduction applied with overstated net employment income. Trade-union dues are missing, mandatory professional college fees are not deducted, and a SEPE benefit acting as a second payer has not been correctly factored in. Each of those items reduces net employment income. By reducing it, the taxpayer can move from the tapered bracket to the maximum reduction. The liability flips sign.
Statutory basis
The reduction is governed by Article 20 of Law 35/2006 (LIRPF) and is applied to the general taxable base before computing the personal and family minimum. The structure for tax year 2025 follows this pattern:
The decisive figure is net, not gross
Queries reach us assuming the €14,852 threshold is crossed against the gross salary. That is a recurrent mistake. The threshold is measured against net employment income, calculated after applying the deductible expenses of Article 19 LIRPF. Those expenses are cumulative and worth listing, since each euro reduced increases the chance of staying in the maximum-reduction tier:
- Social Security contributions and mandatory mutual insurance — usually pulled into the draft from the employer's Form 190.
- Trade-union dues — deductible without specific limit, but the AEAT only knows the figure if the union has reported it. The draft typically omits these.
- Mandatory professional college fees — deductible up to €500 per year under Article 19.2.d LIRPF. Applies to professionals registered with colleges where membership is legally required to practise.
- Legal-defence costs in employment disputes — deductible up to €300 per year, conditional on the dispute deriving directly from the employment relationship.
- General €2,000 reduction for "other expenses", available to all employment income earners (Article 19.2.f LIRPF).
A taxpayer with €38,000 gross salary who provides certificates for €200 of trade-union dues, €500 in mandatory college fees, the general €2,000 reduction and around €2,400 of Social Security contributions, ends up with net employment income near €32,900. Still above the increased-reduction tier, yes — but the calculation shows that each Article 19 element can move €50–€200 of effective tax liability, and that in the €14,000–€18,000 net-income range the difference between brackets can be decisive.
The cross-cutting threshold: non-employment income
The condition that voids most files is the cross-cutting one: total non-employment gross income plus capital gains may not exceed €6,500 per year. A taxpayer with a €700/month rental income has already crossed it on its own. A taxpayer rotating an investment portfolio with two fund disposals producing aggregate gains of €7,000 has too. The Article 20 reduction is then withdrawn in full — no taper, no proportionality. Either you are in or you are out.
When the draft falls short
The draft applies the reduction correctly in the standard scenario: a taxpayer with a single employer, no other income, no unreported expenses. The automatic calculation is sound. We see four recurring situations in which the draft underdelivers:
- Two or more payers — when net income aggregates several employer payrolls, the partial data each one reported may not aggregate cleanly. The bracket determination on total income may be miscalibrated.
- Part-time work or partial year — taxpayers active only seven months, or those combining employment with SEPE benefits, often see the aggregate net income computed irregularly.
- Fees not reported to the AEAT — union, college, legal defence. When the taxpayer pays directly, the draft has no information.
- Large variations between tax years — when 2024 closed with very different figures from 2025, calculation algorithms may carry over inherited apportionments that no longer apply.
It is therefore worth, before submitting the draft, reviewing the section Employment income — Reduction and comparing the figure applied with the manual calculation on the actual net income for the year.
Tax-liability impact
The impact on liability depends on the marginal rate. For a taxpayer with a 19% marginal rate, a €7,302 reduction translates into roughly €1,387 less tax. For a 24% marginal rate (typical State + regional combined rate at mid-level incomes), the figure rises to about €1,752. The difference between sitting in the top tier rather than the tapered tier — if the actual net income turns out to be €16,000 instead of €14,500 — can range between €400 and €600 of effective tax. It is therefore worthwhile, before submitting, to verify that the net income calculated by the AEAT matches the aggregate produced from real payslips, certificates and contributions.
Our position
We treat the Article 20 reduction as a control verification in any file with net employment income below €22,000. The routine is always the same: reconstruct net income from sources external to the draft (payslips, contribution certificates, evidence of union and college fees, SEPE certification where applicable), compare against the figure carried over by Renta WEB and quantify the divergence. In three out of ten files, we find scope for adjustment that warrants correction before submission. Where the return has already been filed, the route is the rectification of the self-assessment within the four-year limitation period.