Form 145 is a form used in Spain for workers to communicate to their employer certain personal and family data that affect tax withholdings on their income. These withholdings are applied to earned income, such as wages and salaries, and are used to pay Personal Income Tax (IRPF).
This model is essential for the company to apply the correct withholding according to the employee’s situation. Factors such as marital status, number of children or whether the employee has a disability have a direct influence on the withholding percentage. This ensures that withholdings are adjusted to personal circumstances, avoiding overpayments or underpayments of taxes.
What is Form 145 and what is it for?
Form 145 allows employees to provide personal and family information to their company, which directly affects the calculation of withholding taxes applied to their salary. Withholdings are the percentages that the company deducts from the employee’s paycheck to pay the corresponding taxes to the Tax Agency.
By means of this form, the worker communicates important details that influence the withholding percentage, such as:
- The number of children or dependents
- Your marital status
- If he/she has a disability or any other special situation that affects the withholding.
Practical example: If a worker is single and has no children, his withholding will be higher than that of a married person with two children, since the tax legislation provides for a lower withholding for those who have greater family responsibilities.
Who must file Form 145?
Form 145 must be filed by all workers with income subject to withholding, either through an employment relationship or by receiving pensions. In addition, it is mandatory to update the form when there are changes in the personal or family situation, such as:
- Change of marital status (marriage, separation or divorce)
- Birth or adoption of a child
- Recognition of a disability.
If the employee does not file or update Form 145, the company will apply the highest withholding corresponding to his or her situation, which may lead to an excessive advance payment of taxes.
When and how do I file Form 145?
Form 145 must be filed at the following times:
- At the beginning of the employment relationship
- When there are changes in personal or family data.
The worker must complete Form 145 and submit it directly to his/her company. It is not submitted to the Tax Agency, since it is the company that uses this information to calculate and apply the corresponding withholdings and send them to the Tax Agency.
Why is Form 145 important?
Completing and submitting Form 145 correctly is essential because:
- It avoids incorrect withholdings: If it is not updated, you could be overpaying or underpaying your taxes
- Facilitates the tax return: An adjusted withholding reduces the likelihood of having to pay a large amount or receiving unexpected refunds
- Meets tax obligations: It is a legal requirement to provide accurate information to the company for the correct calculation of withholdings.
In summary, Form 145 is a crucial tool to ensure that withholding taxes applied to salaries accurately reflect the employee’s personal situation. Filing it properly not only ensures compliance with tax obligations, but also avoids surprises in the income tax return.
