Euro is the official currency of Spain. Its currency symbol is €, EUR
Estimated 35% of employee's salary
Within 72 hours with Emerald Technology
Spanish (or Castellano) is the official language of Spain
Employers in Spain must pay their employees monthly. Spanish employees are entitled to a 14th-month salary also.
GROW YOUR TEAM IN SPAIN
NO ENTITY, NO PROBLEM
To start growing your team in Spain, you must establish a local entity- including an account with a local bank, a local office and an address registered as a subsidiary. This allows you to manage payroll, tax, benefits and compliance for your employees, but can take several months.
Emerald can hire and payroll your workers, quickly and compliantly with their ready to go entity. Make growing your team simple with Emerald as a global partner.
Pros and Cons of hiring in Spain
With the fourth largest economy in the Eurozone, Spain is a strong option for companies looking to expand into Europe. Cities like Barcelona are home to many Spanish-founded technology unicorns such as Glovo, eDreams and Wallbox.
With great connections to European and Latin American countries (due to their shared language and history), Spain represents a natural choice for international investment. Currently, the Spanish tech industry is one of the largest employment sectors.
To do business in Spain you must secure a certificate for your proposed company name, open a local bank account, obtain a NIF (tax identifier), and complete various declarations. This process can be long and require significant monetary investment, so partnering with a Global Payroll provider is often a good alternative.
The employer must contribute around 30% of the employee’s salary to Spanish social security.
Why Spain is good for remote workers
Spain recently passed new laws and regulations regarding remote working. To be considered a remote worker, an employee must spend at least 30% of their time working remotely for at least three months. Remote workers have the exact same rights as in-person workers and in 2021, roughly 25% of the Spanish workforce used a home office at some point.
Spain also has a Digital nomad visa scheme which allows any approved non-EU citizen to live in the country for up to five years and benefit from reduced income tax of 15% versus the regular 24%. Madrid, Barcelona and Valencia are among the most popular locations.
Spanish employers are required to offer the following benefits to all full-time employees:
- Minimum Wage
- Maternity and Paternity leave
- Annual Leave and Holiday
- Sickness Pay
- Public Health Insurance
- Professional Training
- 13th + 14th Month salary
- Teleworking Allowance
Some employers like to offer additional benefits to improve employee retention and satisfaction.
- Private Healthcare
Spanish employment contracts can be verbal or in writing. However, Spanish labour law does require certain contracts to be in writing, such as part-time contracts, temporary contracts, and those involving special labour relations (such as commercial representations, lawyers, and higher management).
It is best practice to produce a written contract of employment.
The Public State Employment Service (SEPE) should receive a copy of the contract within 10 days of this coming into operation.
- Name (Employee and Employer)
- Time period of contract
- Professional Category
- Place of Work
- Working Hours
- Holiday Entitlement
- Notice Period
- Applicable Collective Agreements
- DNI or NIE number (for foreigners)
A probation period allows both an employer and employee to evaluate the employment match. The probation period is typically 2-6 months and may not exceed six months.
By law, Spanish employers must provide healthcare insurance for employees. Healthcare in Spain consists of both private and public healthcare - some employers offer private as an additional benefit.
Anyone working in Spain must register with the Spanish social security service. Contributions must be made so an employee has access to benefits such as;
- Sickness Pay
- Maternity and Paternity
Both employers and employees must contribute.
Expectant mothers in France are entitled to 16 weeks of maternity leave (Permiso de Maternidad). Of these 16 weeks, six weeks are mandatory after the birth and the other 10 are optional. Up to four weeks may be taken before the birth but in practice, this is usually taken as sick leave.
To be entitled to maternity leave, the mother must be in employment or self-employed and making social security contributions as follows:
|Under 21||No minimum period|
|21 years - 26 years||90 days of contribution|
|Over 26 years||180 days of contribution|
If these requirements are not met than they may still be entitled to a grant of approx. €530 per month.
Paternity entitlements are unified with maternity. Expectant fathers are entitled to the same 16 weeks of leave. The procedure is the same for payment entitlements.
Employees are entitled to sick pay if they have paid into social security for 180 days in five years before illness.
|First 3 days of illness||0%|
|Days 4 - 20||60% of salary|
|Days 21+||75% of salary|
The payment is chargeable to the employer until day 15, when it becomes the responsibility of the social security administration.
Once an employee has been signed off as unfit to work by a healthcare professional such as a doctor, they are entitled to receive sick pay for one year, extendable by a further 6 months.
As the legal employer, Emerald Technology requires the following employee documents to ensure complete compliance:
- DNI Documento Nacional de Identificacion and Passport
- IBAN Proof
- Modelo 145 filled out
- NIE or Residency Card
- IBAN Proof
- Modelo 145 filled out
- Visa if outside the EU
A social security number is also needed to onboard employees.
Resignation and Dismissal
An employee may unilaterally terminate their employment by providing written notice to their employer. Typically, this is 15 working days but will be stated in the contract of employment. During a probation period either party may terminate employment without prior notice with no need to provide a reason for termination.
Termination from the employers side once a probation period has ended cannot take place without a statutory reason such as collective dismissal, retirement, disciplinary dismissal, incapacity, circumstances that prevent the provision of work, objective dismissal. Please be aware this list is not exhaustive.
For all types of dismissal, the employer must deliver a letter of termination to the employee. This letter must include the date of termination and the reasons for the dismissal. An employee has up to 20 days after receiving the letter of termination to initiate a court case for unfair dismissal.
In the case of objective dismissal (despido objetivo), employees are entitled to 20 days of salary for each year of service. With a maximum of 12 instalments.
Unfair dismissal (despido improcedente), employees are entitled to 33 days of salary for each year of service. With a maximum of 24 instalments. There will not be any statutory compensation if the employee ends their employment or if there is a mutual agreement between the employee and the company. However, both parties may voluntarily agree on a specific compensation in order to terminate employment.
Employees are entitled to severance pay if the dismissal was non-voluntary dismissal by an employer for non-disciplinary reasons. The employee is entitled to 20 days of salary per year of service.
Statutory Time Off
Full-time employees in Spain are entitled to a statutory minimum of 25 calendar days’ annual leave per annum. Payment in lieu is not allowed for holidays unless employment is terminated.
It is down to the employer to determine if public holidays are included in the annual leave entitlement.
Public holidays can vary depending on the region in Spain. There are 8 public holidays set by the Spanish government.
- New Year's Day
- Good Friday
- Fiesta de la Hispanidad
- Spanish Constitution Day
- Epiphany of the Lord
- Assumption of our Lady
- All Saint's Day
- immaculate Conception
There are also 4 regional holidays set by the local government and 2 municipal holidays set by the town hall.
Work, Pay and Taxes
The minimum wage applies to all workers in Spain regardless of contract, which is €1,166.66 per month.
Working Time and Overtime
The standard working week in Spain is 40 hours (or nine hours per day), usually Monday-Friday. Many employers give Friday afternoons off, with the time made up by working 8.5 hours from Monday-Thursday.
Any hours beyond 40 are classed as overtime. Overtime is capped at a maximum of 80 hours per year. Employers are required to provide at least 1.5 days of continuous rest per week and it is standard practice to offer Saturday and Sunday as days off.
Salary payments in Spain are often paid in 14 instalments (12 monthly payments and an additional payment in July and December), This can vary among companies and collective agreements
|Cycle||1st- end of the month|
|Payment||Last day of the month|
Employers are required to pay two additional salaries in July and December.
The Spanish tax year runs from January to December. It is the employer’s responsibility to ensure taxes are deducted from an employee’s salary ahead of payment.
|€0 - €12,450||19%|
|€12,450 - €20,200||24%|
|€20,200 - €35,200||30%|
|€35,200 - €60,000||37%|
WORKER MISCLASSIFICATION IN SPAIN
Similar to other countries, Spain has strict rules on classifying individual contractors and full-time employees differently. Misclassifying your workers can put your business at risk of fines.