Madrid is Spain’s capital. Pay is higher than the Spanish average, and rents keep rising. This guide covers the main costs and where to find reliable, up-to-date numbers. We only quote figures we can source, so for prices that change every month we point you to where to check them.
Pay in Madrid
According to the INE, the average gross annual pay in the Comunidad de Madrid was €34,410.01 in 2024, the second highest of any region after País Vasco, and above the Spanish average of €29,540.26 (INE salary survey). These figures cover all jobs.
Tech pay is higher. On Levels.fyi, the self-reported median total compensation for software engineers in the Madrid area was €55,498 on 24 September 2026, based on 629 submissions (Levels.fyi). That figure includes bonus and stock and leans towards large international companies. See our salary guide for more, including salaries posted on our Madrid jobs.
Take-home pay
Before you compare costs, work out what you will actually receive. Two deductions come off your gross salary:
- Social security. In 2026 employees on a permanent contract pay 6.50% of their contribution base, which is capped at €5,101.20 a month (Order PJC/297/2026).
- Income tax (IRPF). It is progressive, with a state scale plus a regional scale set by the Comunidad de Madrid (IRPF law, articles 63 and 74).
If you have just moved to Spain for work, you may qualify for the Beckham Law, a flat 24% rate on salary up to €600,000 (IRPF law, article 93). Read our tax guide before you accept an offer.
Rent: the biggest cost
Rent will be your largest monthly cost in Madrid.
How fast rents are rising
The INE’s rental price index is built from Agencia Tributaria records of actual rental contracts, so it reflects what tenants pay rather than asking prices. For 2024 it shows (INE):
- Rents in the city of Madrid rose 3.6% in 2024, and 22.6% in total between 2015 and 2024.
- Across Spain, rents rose 3.5%. But new contracts rose 8.8%, compared with 2.8% for existing ones.
That last point matters if you are moving. You will sign a new contract, so expect to pay more than the average long-term tenant.
Where to check current rents
Official statistics lag by more than a year. For current asking prices:
- Property portals such as Idealista and Fotocasa publish regular rent reports by city and district, based on the asking prices in their listings.
- Look at real listings in the areas near your office for a few weeks before you move.
Upfront costs
The Urban Leases Act (Ley 29/1994) sets the rules for renting a main home:
- Deposit (fianza): one month’s rent (article 36).
- Extra guarantee: landlords can ask for more, but on contracts of up to five years (seven if the landlord is a company) it is capped at two months’ rent (article 36.5).
- Agency and contract fees are paid by the landlord (article 20.1). If an agent asks you, the tenant, to pay their fee for a long-term rental of your main home, question it.
So budget for the first month’s rent plus up to three months in deposit and guarantees, and possibly a few weeks of temporary housing while you search.
Short-term furnished rentals (alquiler de temporada) are not covered by these rules in the same way. Read the contract carefully before you sign one.
Choosing where to live
- Commute first. Check your office location and how often you need to be there. Our job pages show whether a role is on-site, hybrid or remote.
- Look beyond the centre. Madrid’s metro and commuter rail reach many outer districts and nearby towns in the Comunidad de Madrid.
- Visit in person. Photos can be misleading, and good flats go quickly.
Transport
Fares for Madrid’s metro, buses and commuter trains, including the monthly travel pass (Abono Transporte), are set by the regional transport consortium, the Consorcio Regional de Transportes de Madrid (CRTM). Prices and discounts change, so check the CRTM website (crtm.es) for current fares before you budget.
Healthcare
If you live legally and habitually in Spain, you have the right to public healthcare (Ley 16/2003, article 3). Once you are registered, you apply to the regional health service for a health card and a local health centre.
Some employers add private health insurance as a benefit. Some work permits ask for proof of health cover when you apply. See our relocation checklist.
Everyday costs
Groceries, eating out, utilities and phone plans vary a lot with your habits. For an overview of how prices are moving, the INE publishes the monthly consumer price index (CPI). For your own budget, track a month of real spending once you arrive.
A simple budget method
- Start with your net monthly pay after social security and tax.
- Subtract rent, plus any community fees or bills your contract says you pay.
- Subtract transport (your monthly pass) and phone and internet.
- Subtract food, based on a month of real spending.
- Keep a buffer for one-off costs in your first months: deposit, furniture, paperwork and flights.
A quick look at Barcelona
Barcelona has similar pressures. According to the INE, rents in the city rose 3.3% in 2024 and 24.6% between 2015 and 2024, slightly more than Madrid over that period. Average pay in Cataluña was €31,730.05 in 2024, below Madrid’s (INE rental index, INE salary survey).
Rents have risen fastest in Valencia (5.9% in 2024, 36.4% since 2015) and Málaga (5.2% in 2024, 32.7% since 2015), even though average pay in those regions is lower.
Frequently asked questions
Is Madrid affordable on a software engineer’s salary?
It depends mostly on rent. Tech pay in Madrid is well above the regional average: the self-reported Levels.fyi median for software engineers was €55,498 on 24 September 2026, against an INE average of €34,410.01 for all jobs in 2024. But rents keep rising, so start from your net pay and subtract rent first.
How much deposit do I need to rent a flat in Madrid?
The legal deposit (fianza) is one month’s rent. Landlords can ask for an extra guarantee, capped at two months’ rent on contracts of up to five years (seven if the landlord is a company). So budget for the first month’s rent plus up to three months in deposit and guarantees.
Do tenants pay agency fees in Madrid?
Not for a long-term rental of your main home. Under the Urban Leases Act, agency and contract fees are paid by the landlord, so question it if an agent asks you to pay. Short-term furnished rentals (alquiler de temporada) aren’t covered by these rules in the same way, so read those contracts carefully.
Are rents going up in Madrid?
Yes. According to the INE, rents in the city of Madrid rose 3.6% in 2024 and 22.6% in total between 2015 and 2024. Across Spain, new contracts rose 8.8% in 2024, compared with 2.8% for existing ones. As a newcomer signing a new contract, expect to pay more than the average long-term tenant.
How does Madrid compare with Barcelona for tech workers?
Both have rising rents. INE data shows Barcelona rents rose 3.3% in 2024 and 24.6% between 2015 and 2024, slightly more than Madrid over that period. Average pay for all jobs in Cataluña was €31,730.05 in 2024, below Madrid’s €34,410.01. Compare real listings and job offers in both cities before deciding.
What comes off my salary in Madrid?
Two deductions. In 2026 employees on a permanent contract pay 6.50% social security on a contribution base capped at €5,101.20 a month. Income tax (IRPF) is progressive, with a state scale plus a Comunidad de Madrid scale. If you have just moved for work, the Beckham Law’s flat 24% rate on salary up to €600,000 may apply.
Find a job in Madrid
Browse tech jobs in Madrid and English-speaking jobs across Spain, or compare with Barcelona. If you’d rather keep your costs flexible, look at remote jobs.