Your Guide to Hiring Employees and Contractors in Spain
Spanish, Catalan, Basque, Galician
Ease of doing business
All employee payments will be made in equal monthly installments on or before the last working day of each calendar month, payable in arrears.
In Spain, it is also mandatory to make 14 salary payments: 12 months of work and 2 additional allowances (a holiday payment and a Christmas payment). Spanish labor law allows the employer to decide how these extra payments should be paid.
Minimum Wage Requirements
EUR 1,166.67 per month.
Individual Income Tax
The individual income tax ranges from 19% to 45%. Income tax is calculated according to progressive rates.
Multiple additional factors may impact overall rates such as the household status and the number of children.
Up to EUR 12,450
Tax rate: 19%
Between EUR 12,451 – 20,200
Tax rate: 24%
Between EUR 20,201 – 35,200
Tax rate: 30%
Between EUR 35,201 – 60,000
Tax rate: 37%
Above EUR 60,000
Tax rate: 45%
The employer cost is generally estimated at 31.42% of the employee salary.
Common Contingencies: 23.6%
Professional Contingencies: 7.80%
Social Fund for the Guarantee of Salaries: 0.20%
Temporary diseases and Incapacity, Death and Survival: 1.50%
Professional education: 0.6%
WFH Office allowance: 50.00 EUR
Medical exam (if the employee requests it): 65.00 EUR
Monday to Friday.
Overtime Pay & Maximum Hours
Unless there is an agreement in place, employees can work no more than 9 hours per day. Employees can work a maximum of 80 hours a year in overtime.
Overtime payment is mandatory and may be included in the salary.
Hours outside of standard work hours are considered overtime. Employees can work a maximum of 80 hours of overtime.
Spain does not follow at-will termination practices. Once hired and under contract, an employer doesn’t have the right to fire for any reason. Instead, there needs to be established grounds for termination, such as:
- Two-party consent
- Established contract grounds
- Employee resignation, retirement, illness or death
- Contract expiration
- Objective collective dismissal
- Objective dismissal
- Disciplinary dismissal
The statutory notice period for an employer depends on the reason for dismissal and the collective bargaining agreement the employment contract is subject to. For dismissals due to economic factors related to production, the organisation of work, the proper functioning of the business and structural, the company has to provide 15 days prior notice.
Employees are generally required to provide 2-3 weeks of prior notice when resigning, depending on the collective bargaining agreements.
The establishment of a probationary period is not mandatory under Spanish labor legislation. The applicable CBA includes the maximum probationary periods to be agreed with the employees.
It is feasible that for the same professional category, you agree different probationary periods with employees if there is justified reason (as a matter of example: experience, training, languages, etc.) and provided that you respect the probationary periods limits established in the CBA.