Payroll & Employment Guide: Spain

Hiring in Spain

If you want to hire in Spain (remote or on-site), you must comply with the minimum wage (SMI), written contract requirements, working-time recording, and social security registration rules. Spain has introduced strict obligations around digital time-tracking and the right to disconnect from work-related communications outside working hours.

Your HR and timekeeping systems should allow you to record daily working time, manage overtime, and evidence compliance during inspections. You should also monitor the legislative process on the proposed reduction of the maximum working week to 37.5 hours and adjust internal policies once final rules are enacted.

Learn more

Employee Benefits

Employers in Spain must provide statutory benefits and social-security coverage, and many companies layer on additional perks to compete for talent in the market.

Mandatory Benefits:

• Statutory paid annual leave of 30 calendar days (≈22 working days), with at least one continuous period of two weeks commonly respected
• Social security coverage, including healthcare, pensions, unemployment, and work accident insurance
• Sick leave and statutory allowances for temporary incapacity, funded by Social Security with possible employer top-ups based on tenure, contract, or CBA
• Maternity, paternity, and parental leaves in line with statutory rules
• Employer social-security contributions, commonly around 30% of gross salary plus a variable occupational accident premium

Leave Policies:

• Annual leave: minimum 30 calendar days (around 22 working days)
• Sick leave: pay and eligibility depend on Social Security rules and the applicable CBA or company policy
• Parental and family leaves: statutory entitlements for maternity, paternity, caregiving, and other situations, sometimes enhanced by CBAs

Healthcare:

• Covered by Spain’s public healthcare system via social-security contributions
• Many employers offer private health plans as an additional benefit

Combining statutory protections with competitive benefits (e.g., private healthcare, flexible working, meal vouchers) helps employers attract and retain talent in Spain.

Get more benefits

Taxes in Spain

Payroll taxes and social-security contributions in Spain fund healthcare, pensions, unemployment benefits, and other social programs. Employers must manage both their own contributions and those withheld from employees.

Employer Social Security:
The employer’s social-security burden is commonly around 30% of gross salary, plus a variable occupational accident insurance premium depending on the sector and risk rating.

Employee Social Security:
Employee contributions are typically around 6.5% of gross salary, though exact rates vary by contract type and contribution base.

Personal Income Tax (IRPF):
Spain uses a progressive income-tax system with regional variations. Employers must withhold IRPF from salaries according to the employee’s personal situation, applicable national and regional rate tables, and any updates. Rates change periodically and require review during payroll setup and annually.

Correctly configuring IRPF and social-security withholding is critical for payroll compliance and avoiding penalties in Spain.

Payroll in Spain

Base Salary & Payment Structure:
In Spain, annual salaries may be paid in 14 instalments (12 monthly payments plus two extra payments, typically in July and December) or pro-rated over 12 payments. The SMI is commonly expressed on a 14-payment basis. Contracts must clearly state whether salaries are paid in 12 or 14 payments and how extra payments are structured.

Payroll Cycle: Monthly payroll is standard.

Payslips:
Payslips must clearly show:

• Gross pay and any extra payments or bonuses
• Withholdings for social security and IRPF
• Net pay
• Payment period and working-time reference
• Employer and employee identifiers

Payroll Deadlines & Filings:
Employers must withhold taxes and contributions at each payroll run and file the required social-security and tax declarations (typically monthly, with some quarterly and annual reporting, depending on the obligation).

Payroll Currency: EUR.

Key Practice:
If you choose to pay salaries in 12 instalments instead of 14, ensure that contract language and payroll calculations reflect the SMI equivalence and that your total annual pay still meets or exceeds statutory minimums.

Looking for detailed guidance on payroll setup, 12 vs 14 payments, and statutory deductions in Spain?

About payroll

Legal Regulations

Spanish labour law is built around the Workers’ Statute (Estatuto de los Trabajadores), sectoral collective bargaining agreements (convenios colectivos), and recent reforms on working-time reduction, right to disconnect, and mandatory time-recording.

Key Employer Obligations:

• Comply with working-time limits, overtime rules, and digital time-recording obligations
• Register employees with Social Security and ensure correct contribution bases and reporting
• Respect anti-discrimination laws, health & safety rules, and equality requirements
• Apply sectoral CBAs where applicable, including rules on pay scales, working hours, bonuses, and termination
• Follow statutory dismissal procedures, notice, and severance rules adapted to the dismissal cause, contract type, and CBA

Total Employment Cost:
Employer social contributions are commonly around 30% of gross salary, with sector, contract type, and accident insurance rates affecting the final burden. Employers should calculate total employment cost (salary + employer contributions) before making offers.

Strong compliance processes and a clear understanding of the applicable convenio are key to operating safely in the Spanish labour market.

Learn more

Work Permits & Visas for Spain

Non-EU / non-EEA nationals require an appropriate residence and work permit to work in Spain. The type of permit depends on nationality, role, salary level, and contract terms.

Common routes include:

• Standard work permits tied to employer sponsorship
• Highly skilled professional visas
• Intra-company transfer mechanisms for multinational staff

Employers must ensure that the correct permit is secured before the employee starts work, and that all social-security and tax registrations are completed on time. Where the employer does not have a Spanish legal entity, an EOR can help manage immigration compliance and onboarding.

Click here

EOR & PEO Services in Spain

Using Employer of Record (EOR) or Professional Employer Organization (PEO) services in Spain allows companies to hire locally while simplifying compliance and HR management.

Employer of Record (EOR) in Spain:

An EOR becomes the legal employer of your Spanish staff while you direct their day-to-day work. The EOR typically handles:

• Employment contracts compliant with Spanish law and CBAs
• Payroll processing and monthly salary payments (including 12/14 payment options)
• IRPF withholding and employer/employee social-security contributions
• Social-insurance registration and mandatory filings
• Leave administration, terminations, and local HR compliance

PEO Services in Spain:

For companies that already have (or plan to set up) a Spanish entity, a PEO can support:

• HR administration and workforce support
• Payroll and benefits management
• Compliance with CBAs and labour-law updates
• Drafting and management of employment documentation

EOR/PEO solutions reduce administrative burden, risk, and complexity, especially if you are new to the Spanish market.

EOR in Spain

Payroll Calculator

Use Dhi ADT’s payroll calculator to estimate gross-to-net pay, employer contributions, and total employment cost in Spain. You can model both 12-payment and 14-payment structures to see how salary packages and deductions change.

Go to Calculator