Mercans CountryIntel ® Spain Payroll And HR Insights
Spains boasts one of the least restrictive regulatory environments around the world, making it attractive to businesses. It has the largest network of highways and freeways in the EU, has two of Europe’s business airports and three of Europe’s most important ports. This is supported by a highly skilled talent pool, many of whom possess higher education qualifications.
Spain has an extensive and comprehensive system of grants and incentives, aimed at encouraging employment, regional investment and foreign direct investment. The labor market is flexible and companies have a range of options open in how they choose to operate.
Entity Registration and Incorporation Requirements
Setting up a new business or expanding an existing one in Spain is straightforward. Choose how your company operates from a range of entity types that suit your individual circumstance.
Banking Hours: 9:00 am to 2:00 pm from Monday to Saturday.
The standard working week is from Monday to Friday from 8:30 am - 1:30 pm and then from 4:30 pm - 8:00 pm.
A key element of Spanish labor legislation is that employment issues can be regulated by collective bargaining. Significant progress has been made, over time, about social rights and equal opportunities in the labor market.
Machinery, electronics, medical equipment, chemicals, motor, vehicles, clothing
Dates & Numbers
Official State Name
Kingdom of Spain Reino de España
Spanish, Catalan, Basque, Galician
International Dialing Code
The official minimum wage is established by the government every year and minimum wages for professional groups are typically regulated by collective labor agreements. Salaries cannot be paid at intervals of more than one month.
It is acceptable to provide employees with online payslips
Payroll reports must be kept for four years
Paid annual leave of 30 days
Unpaid sick leave for the first three days. From 4 - 20 days, sick leave is paid at 60% of the regular pay
16 weeks of paid maternity and paternity leave
Maternity & Paternity Leave
13th and 14th month salary payments are mandatory in Spain, generally paid in July and December
13th month salary
1,125.83 EUR per month
Overtime payment is calculated at 75% of the employee's ordinary rate of pay for 80 hours per year
Employees paid monthly are entitled to 20 days’ pay for each year of employment for the first 12 months of service
The main direct taxes in Spain are corporate tax, personal income tax and non-resident income tax. Spain employs a social security system to which both employer and employee must contribute.
Groups of companies can be taxed under a special consolidated tax regime where all companies in the group are jointly taxed. There are also specific incentives and tax regimes available. Additionally, Spain currently has Double Taxation Avoidance Agreements (DTAs) in force with 96 countries.
Corporate Income Tax
Personal Income Tax
The General Social Security Program requires workers to pay contributions for which their employers must withhold a percentage of earned income for such contributions.
Social Security Rate
Social Security Rate for Employers
Social Security Rate for Employees
There are practical considerations involved in setting up a company in Spain including registering the company with the Spanish social security authorities. Additionally, the start of workplace activities must be notified to the labor authorities within 30 days of opening and the notice must be accompanied by an occupational risk prevention plan.
The employment contract binds both the employer and employee and such contracts can either be open-ended in duration or set by a time limit. Contracts include fixed-term contracts, training contracts, part-time contracts and distance work (telework).
In general, maximum working hours are agreed in collective bargaining agreements or in the individual employment contract. Employees have the right to digital disconnection outside of established work time and overtime is voluntary.
Official public holidays may not exceed 14 days per year. Workers are entitled to a minimum vacation period of 30 calendar days and cannot be paid in lieu of that period except where the contract is terminated with accrued and unused vacation.
Termination may be done on a number of grounds such as mutual agreement, expiry of the contractual term, death or retirement of the employee. In the event of termination by an employer, there are three main grounds for dismissal, that is, collective layoff, objective grounds and disciplinary action.
Minimum notice period for terminating an employee
Total number of public holidays
Working hours per week
Total number of days for Compassionate & Bereavement Leave
EU nationals and their families may live and work (as employees or self-employed workers) in Spain without the need of a work permit. In general, they must obtain the relevant EU citizen registration certificate. Non-EU nationals must obtain prior authorization to live and work in Spain.
There are visa and residence permits available for investors, entrepreneurs, highly qualified professionals, training and R&D activities as well as intra-company transfers. Generally, visas will be valid for one year. Residence permits generally have a one year term and applications for two-year extensions may be made.
Work Permit Validity
Every year for 5 years after which, an application for permanent residence could be submitted
The foreign worker’s identity card
Photocopies of the foreign worker’s passport
Any criminal record (if applicable)
3 passport-sized identification photos
copies of the foreign worker’s job offer.
Build the best team and hire top talent compliantly in Spain. Get in touch with Spain payroll outsourcing & PEO specialists for a free consultation!