Build your first-year budgetArticle 5 of 10 · 3 min read
How Spanish prices work, including VAT (IVA), tipping and set menus
Explains how prices work in Spain: shelf prices already include IVA, tipping is small and optional, and the menú del día sets the cost of eating out. For newcomers who want their budget to match what they pay.
Key rules
- Shelf prices: Prices shown to consumers already include IVA, so nothing is added at the till.
- Professional quotes: Quotes and invoices from businesses and professionals often show prices before IVA, so ask whether it is included.
- Tipping: Tips are optional and small, because service is already included in the bill.
- Menú del día: The fixed lunch price usually covers bread and a drink, so don't order them again.
The price you see is the price you pay
In shops, bars, restaurants and online stores, the price shown to consumers is the final price. IVA and all other taxes are already in it. Nothing is added at the till, so don't add it yourself when you budget.
Quotes from professionals and businesses are different. A quote or invoice from a tradesperson, a freelancer or a company often shows the price before IVA, with IVA added on top. If a quote looks cheaper than the shelf price for the same thing, this is usually why. Ask: "¿Está el IVA incluido?" (Is IVA included?)
Which IVA rate applies
IVA has three rates on the mainland and the Balearic Islands:
- 21% on most goods and services, such as clothing and electronics.
- 10% on public transport, hotels and restaurants, and some foods.
- 4% on basic items such as bread, milk, eggs, fruit, vegetables, cheese, books and newspapers, and some medicines.
The temporary food-tax cuts of 2022 to 2024 have ended. The Canary Islands, Ceuta and Melilla have different indirect taxes, so the rates above do not apply there.
Tipping is small and optional
Service is already included in the bill. Tipping is a thank-you, not an obligation.
- Restaurants: leave small change, or around 5% for good service. 10% is generous.
- Bars: a few coins is enough.
- Taxis: round up to the next euro, or add 5 to 10% if you like. Nobody expects it.
The menú del día shapes eating-out costs
The menú del día is a fixed-price weekday lunch. It is usually the cheapest way to eat a full meal out. It is typically served from about 13:00 to 16:00 on weekdays, and less often at weekends or in the evening.
It normally includes a starter or first course, a main course, dessert or coffee, bread and a drink (water, wine or beer). Because the drink and bread are in the price, you don't need to order them separately. Check the board before you order, and ask what is included if it isn't clear.
Typical prices in 2025 were:
- 12 to 16 euros in most cities and towns.
- 10 to 13 euros in small towns.
- 15 to 25 euros or more in central Madrid, Barcelona and tourist areas.
Prices rise each year, so read the local menu board. The questions below cover more detail.
Frequently asked questions
What IVA rates will I see on things I buy?
Spain has three IVA rates: 21 percent on most goods, 10 percent on items such as public transport, hotels and restaurants, and 4 percent on basics such as bread, milk, eggs, fruit, vegetables, cheese and books. These rates apply to mainland Spain and the Balearics.
Why does a quote from a professional show a lower price than the shelf price?
Business and professional quotes often show the price before IVA, with IVA added separately. Shop prices for consumers must already be the final price. Ask whether a quote includes IVA before you compare it with a shelf price.
How much should I tip in a Spanish restaurant, bar or taxi?
Leave small change or about 5 percent in a restaurant, since service is already included; 10 percent is generous. In a bar, a few coins are enough. In a taxi, round up to the next euro or add 5 to 10 percent if you like.
How much does a menú del día cost?
A menú del día typically costs about 12 to 16 euros in most cities and towns, and about 10 to 13 euros in small towns. In central Madrid, Barcelona or tourist areas, expect 15 to 25 euros or more. It is a weekday lunch deal served from about 13:00 to 16:00.
What does a menú del día include, so I don't pay for extras twice?
A menú del día usually includes a starter, a main course, a dessert or coffee, bread and a drink such as water, wine or beer. Do not order drinks or bread separately. It is less common at weekends or in the evening.
More in Build your first-year budget
- How much cash you need for your first year in Spain
- Building a budget from setup, monthly, annual and buffer costs
- When your costs hit, from before departure to month twelve
- What to budget monthly for food, phone and everyday life
- How much tax to set aside in your first year
- Tracking your spending and fixing the budget after month three
- Where you can cut first-year costs without hurting the plan
- What changes in your budget in year two
- Budgeting trips home and visitors from abroad
Need certainty before you act?
For important relocation decisions, speak with a qualified human specialist.
Always verify important information with the relevant official authority or a qualified adviser before acting. This website uses large language models together with various public data sources, official government documents and other established sources. Due to the amount of data on this website, some information might be wrong. Information may also be incomplete or outdated.