Last updated on December 26th, 2023 at 06:39 pm
Moving to a new country can be a landmark moment in anyone’s life. It often comes with a lengthy to-do list–from applying for a visa and arranging accommodation, to the process of actually settling into your new place of work or study.
Amid all the activity, consider how you can get off to a great financial start in Spain. This is where our guide comes in. We’ll run through some key points to consider as a newcomer to Spain, from the tax system in the country to how best to send money abroad via Remitly.
Tip 1: Set up a local bank account
Creating a new bank account in Spain can help lay the foundation for your new life here. You’ll be required to show official documents, including:
- Photo ID, such as your passport
- Proof of your Spanish address, such as a utility bill
- Proof of your status as an employee or student, such as a staff contract or student ID
- Your NIE, or foreigner identification number
Keep in mind that you must translate the documents into Spanish for them to be acceptable. Make sure it’s done by a certified translator, known as a “traductor jurado.” Fortunately, it’s fairly straightforward to find a certified translator online.
Choosing the right bank is important, too. Spain has a host of options, including big names like Santander, CaixaBank, and BBVA. Do some research online beforehand and check what services each bank offers, paying particular attention to any fees you may incur for the running of the account.
Tip 2: Understand how tax works
Learning the ins and outs of tax is nobody’s favorite part of moving to a new country, but it’s essential to know what’s in store when it comes to the following:
- Income tax
- Social security contributions
The amount of income tax you pay is determined by how much you earn–in other words, your tax bracket. The higher your tax bracket, the more you may be liable to pay.
However, Spain splits income tax between the national and regional governments. The national government applies set rates for each tax bracket which apply across Spain, but the local rates charged by regional governments vary. This means that how much you need to pay in total depends on where exactly in Spain you live.
Meanwhile, your employer largely covers social security contributions, although, you’ll also be liable to pay a percentage of your salary or wages towards it.
Your pay automatically excludes income tax and social security deductions. Keep in mind that it’s important to check what the tax-free allowances and payable percentages currently are. This lets you know exactly how much you’ll take home from your job.
Tip 3: Plan your budget
The vibrant culture, gorgeous architecture, and golden weather all help make Spain one of the most sought-after places for expatriates. However, the living expenses can be more steep than what many are used to. It’s a good idea to factor this in so you can plan your spending according to your income and lifestyle.
We recommend writing down your anticipated costs in a given month. This budget plan may include:
- Rent payments
- The total cost of your utility bills
- Broadband and mobile phone bills
- Food costs
- Transport costs
- Money to spend on socializing and entertainment
Tip 4: Stay aware of the exchange rate
One of the reasons you’ve moved to Spain may be to work and send money back to help loved ones in your home country. If so, it’s important to keep on top of the exchange rate between the euro and your nation’s currency.
Exchange rates are prone to fluctuating all the time, depending on economic and political influences. This means that sending the same amount in euros may lead to different amounts being collected by your recipient, depending on the day or even the minute you choose to make the transfer. Thanks to the internet, you can quickly check the relevant exchange rate and decide whether it’s worth sending the money now or at another point.
Tip 5: Find a cost-effective way to send money home
There can be all kinds of reasons you need to make international money transfers. You might want to send a gift to a friend on their birthday or provide regular financial support for family members who depend on you.
No matter why or how often you need to send money, it’s wise to compare options, as some will cost more than others–both because of higher fees and potentially unkind exchange rates that mean your euros will translate into less of your home currency. Thanks to the Remitly app and website, you have round-the-clock access to a fast, secure remittance service that won’t charge high fees and always has crystal-clear exchange rates laid out.
Remitly is on a mission to make international money transfers faster, easier, more transparent, and more affordable. Since 2011, millions of people have used Remitly to send money with peace of mind.
Visit the homepage, download our app, or check out our Help Center to get started.