Payroll and HR in: Spain

From its strategic location as a gateway to Europe and Africa to its robust infrastructure and skilled workforce, Spain is an ideal destination for your global expansion. Here’s what you need to know about payroll and HR in Spain to thrive in its dynamic market. 

payroll and hr in spain
Local currency


Dialling code


Pay periods

Monthly plus two additional payments in July and December

World Bank Ease of Doing Business







Spanish and Catalan

Tax year

Jan 1st – Dec 31st



Company tax


Social security

36.85%, employer pays 30.4% and employee pays 6.45%

Wages tax


The basics: Getting started with Spanish Payroll

Spanish Wages and Pay

The Spanish government adjusts the minimum wage each year based on a variety of factors, including national productivity and employment levels. The Ministry of Employment and Social Security sets the minimum wage in Spain at daily, monthly, and annual levels.  

The national minimum wage in Spain for 2024 is €1,134 per month totalling 15,876 per year as per the SMI.

In cases of illness/personal injury, the employee is entitled to temporary disability benefit for sick pay, receiving at least 60% of their regular salary. Let’s get into the specifics: (put below in table)  

1-3 days (3 days) = 0% (no obligation to pay unless the employer agrees to make payment, or it is stated in the CBA) 

4-15 days (12 days) = 60% (60% of the employee contributions base paid by the employer)  

16-20 days (5 days) = 60% paid by Social Security (60% of the employee contributions base paid by social security even if the employer makes the payment on behalf of the social security)  

21+ days = 75% paid by Social Security (75% of the employee contributions base paid by social security even if the employer makes the payment on behalf of the social security).  

Additionally, all sick pay musty be processed in payroll in the month it was incurred. 

The maternity pay is managed and paid by the Social Security System Health Insurance Fund. The social security benefits are paid to employees on maternity leave calculated as monthly benefit equal to 100% of the mother’s base rate. All pregnant women are entitled to healthcare before, during and after birth, and need to visit the healthcare centre with their Sistema Nacional de Salud (National Health Service) user’s card to receive them.  

Low-income families benefit from childcare up to €100 monthly for children under 3 years old, €70 between 3 and 6 years old, and €50 between 6 and 18. 

In Spain, fathers have the right to benefit from paternity leave too. They’re entitled to 16 weeks of paid paternity leave with 100% base salary. But, they must take the first 6 weeks of leave immediately after delivery. 

Spanish Payroll and Employment Deductions

The Spanish income tax is made up of two parts, a national tax and a regional tax. Typically, each figure is the same, however there may be regional variations.  

  • Spanish income tax for incomes up to €12,450: 19%  
  • Spanish income tax for incomes ranging from €12,451 to €20,200: 24%  
  • Spanish income tax for incomes ranging from €20,201 to €35,200: 30%  
  • Spanish income tax for incomes ranging from €35,201 to €60,000: 37%  
  • Spanish income tax for incomes ranging from €60,000 to €300,000: 45%  
  • Spanish income tax for incomes over €300,000: 47%  

However, you should always check with the local Comunidades Automas before making any assumption about the regional rate.  

If you are a Spanish resident, you will be taxed on your worldwide income from your savings regardless of where the savings are based.  Your savings income includes any income from:  

  • Interesting from savings  
  • Dividend payments  
  • Income from life assurance policies 
  • Income from annuities  
  • Gains made from the disposal or transfer of assets 


These Spanish tax rates on savings income are as follows from 2021:

  • Spanish tax rate on savings income up to 6,000: 19%  
  • Spanish tax rate on savings income from 6,000 to 50,000: 21%  
  • Spanish tax rate on savings income from 50,001 to 200,000: 23%  
  • Spanish tax rate on savings income over 200,000: 26%  

The social security rate in Spain is 36.85%. The employer pays 30.4% of the employee’s wage, and the employee pays the remaining 6.45%. The minimum amount to be contributed from your salary changes depends on your salary, but the maximum contribution for 2024 per employee is EUR 4,720.50 per month. The minimum contribution base remains at EUR 1,260 per month.

As self-employed, you must contribute to social security if you earn at least the minimum wage. As of 2023, the minimum annual salary is 15,120 in Spain.  

Unlike employed individuals, freelancers must pay the total amount themselves. The amount you contribute monthly is calculated by multiplying 30.6% by the minimum base amount you want to contribute. The social security contribution ranges from 230 and 500 euros. 

 But, thanks to the new autonomo law, freelancers receive some discounts. You’ll pay a discounted flat rate: the first year 80, the second year is also 80 only if you are making less than minimum wage (SMI) of 1,134 per month. Additionally, if you’re a freelancer younger than 30, you receive an additional 30% discount for another year.  

Below shows what new monthly social security contributions look like in Spain from 2023-2025.  

Monthly Income € 




< 670 




670 – 900 




900 – 1,166.70 




1,166.70 – 1,300 




1,300 – 1,500 




1,500 – 1,700 




1,700 – 1,850 




1,850 – 2,030 




2,030 – 2,330 




2,330 – 2,760 




2,760 – 3,190 




3,190 – 3,620 




3,620 – 4,050 




4,050 – 6,000 









By contributing to the Spanish social security system, you can access certain benefits. Including:  

  • Free public healthcare  
  • Sickness or disability benefit  
  • Maternity and paternity care  
  • Pension  
  • Unemployment benefit  

But, if you are a freelancer you don’t receive unemployment and work-related illness benefit. 

  • 65 years of age is the minimum retirement age is Spain.
  • The maximum state-wide pension is 2,617.53, and the minimum is 642.90. This averages to just over 1,100 per month. 
  • So long as you’ve contributed to social security for the last 36 years (37 from 2027), including the 2 years before applying, you’ll receive the full pension rate. 
  • If you’ve contributed to social security for at least 15 years (including 2 before applying) you’ll receive the minimum state pension rate. 


Spanish payroll and HR compliance

Payroll data

Payroll data management and storage in Spain is subject to various legal and regulatory requirements. The specific processes and systems used may vary from one organisation to another, but there are common practices and regulations that apply across the county.  

In Spain, employees need to submit periodic tax and social security contribution reports to the Spanish tax authorities, as well as the Spanish Social Security. The specific requirements and forms for reporting can change and may vary based on the region and specific circumstances. Common forms of reporting payroll information in Spain include:  

  • Modelo 111: used to report quarterly withholdings for income tax on employment income (IRPF) 
  • Modelo 190: used to report annual summaries of all the income and deductions made throughout the year.  
  • Seguridad Social (Social Security): Employers must also report payroll information and contributions to the Spanish Social Security system. 


It’s essential to stay up to date with the specific requirements and forms for payroll reporting in Spain, as they can change over time.  

In Spain, auto-enrolment in private pension plans is part of the broader pension system designed to encourage participation in private pension schemes. Here’s how auto-pension enrolment works in Spain:  

  • Legal framework: Auto-enrolment in private pension plan is governed by Spanish labour and pension laws. The primary legislation governing this process is the ‘Real Decreto 304/2004’ which established the framework for pension plans in Spain. 
  • Eligibility: Auto-enrolment typically targets specific groups of employees, such as those who are newly hired or meet certain age and employment criteria. The exact eligibility criteria can vary depending on the specific pension plan or company policy.  
  • Opt-out option: When eligible employees meet the criteria for auto-enrolment, they are automatically enrolled in a pension plan selected by their employer. However, employees usually have the option to opt out of the plan if they choose not to participate. They must communicate their decision to opt out in writing.  
  • Contributions: Both the employer and the employee make contributions to the pension plan. The contributions are typically a percentage of the employee’s salary and follow established contribution rates. The specific contribution rates and rules can vary from one pension plan to another.  
  • Tax benefits: Contributions to private pension plans in Spain often come with tax benefits. Employees may receive tax deductions for the contributions they make, which can provide an additional incentive to participate.  
  • Reviews and updates: The auto-enrolment process may be subject to periodic reviews and updates to ensure that it remains in compliance with changing legal and regulatory requirements.

Probation periods: Probation or trial periods are set within collective agreement. However, widespread practice in Spain dictates a probationary period of two months, extending to six months for graduate technicians and senior employees. 

Employees from an EU member nation will not need a work permit or Visa to work in Spain. Anybody else will need to apply for a short-term or long-term Working Visa. The Spanish embassy can help with this. 
Typically, Visas to work in Spain are awarded to highly skilled employees in industries that are considered to have a shortage occupation. This Visa can take up to 8 months to be approved. Proof that an equally qualified EU national is unavailable will be required. 

A termination is treated as being by reason of redundancy if it is based on an “economic, technical, organisational or production” reason. If you are on an indefinite work contract and have been dismissed for objective reasons, you are entitled to a redundancy payment based on 20 days per year worked, or pro rata for any months over or under that. The maximum redundancy amount is 12 months wages. In the event of a fair dismissal, legislation requires that employees are paid a minimum legal compensation of 20 days’ pay for each year of service, up to maximum of 12 months’ pay. 

The Termination process varies according to the Employment Agreement and Collective Agreement in place and is based on the type of contract and reason for termination.  

Notice Period: The notice period in Spain is set at 15 days and if notice isn’t given, employers can give payment in lieu. 

Employee Benefits in Spain

Mandatory Spanish employee benefits

Spain has a comprehensive social secutiry system in place, making benefits available to majority of their population. The statutory benefits guaranteed to Spanish citizens includes:

Common supplementary employee benefits

Alongside their wealth of statutory benefits, it's also common for employers to offer additional benefits to their employees. Common supplementary benefits include:

Spain Statutory Leave and Time Off

In Spain, statutory leave, and employee time off is regulated by a combination of labour laws, collective bargaining agreements, and government regulations. Some of the key types of statutory leave and time off in Spain include:  

Full-time workers:

Full-time employees in Spain are entitled to a minimum of 22 working days, equivalent to 30 calendar days of paid annual leave per year. This is one of the most generous holiday entitlements in the world. The leave is usually taken during the summer months and is often divided into two periods. 

Part time workers: 

  • Paid vacation leave: Part-time workers in Spain are entitled to a paid vacation leave, which is typically calculated on a pro-rata basis, depending on the number of hours they work compared to a full-time employee. The annual leave for full-time employees is usually around 30 calendar days, but for part time workers, it’s adjusted based on their actual working hours.  
  • Public holidays: As a general rule, part-time workers are entitled to take paid time off on Spanish public holidays.  
  • Maternity and paternity leave: Part-time workers are entitled to maternity and paternity leave, which is regulated by Spanish law. The specific duration and conditions for maternity and paternity leave can vary depending on the employee’s contract.  
  • Other leave types: Part-time workers may also be entitled to other types of leave, such as parental leave, marriage leave, or bereavement leave, which can vary depending on their individual circumstances and the company’s policies.  

It’s important to note that Spanish labour laws and employment regulations can change over time, so it’s essential for both employers and employees to stay updated with the latest legal requirements and collective agreements in their specific region and industry.  

Spain has several national and regional holidays, but the exact number of public holidays can vary by region. In general, employees are entitled to paid leave on these dates. 

 Public holidays in Spain can vary by region and are determined by both national and regional authorities. Here is a list of all the public holidays in Spain:  




Autonomous Communities  

2 January 


New Year Holiday 

Andalusia, Aragon, Asturias, Castile and Leon & Murcia 

6 January 




21 February  


Shrove Tuesday  


28 February 


Andalusia Regional Holiday  


1 March 


Baleric Islands Regional Holiday  

Baleric Islands  

13 March  


Melilla Statue of Autonomy  


20 March  


St Joseph’s Day  

Madrid & Murcia  

6 April 


Maundy Thursday  

National except Catalonia & Valencia  

7 April  


Good Friday  


10 April  


Easter Monday  

Baleric Islands, Basque Country, Catalonia, La Rioja, Navarre & Valencia  

21 April 


Eid al-Fitr 


24 April 


Aragon Regional Holiday  


1 May  


Labour Day  


2 May  


Madrid Regional Holiday  


15 May  


San Isidro  


17 May  


Galican Literature Day  


30 May 


Canary Islands Regional Holiday  

Canary Islands  

31 May  


Castile-La Mancha Regional Holiday  

Castile-La Mancha  

8 June 


Corpus Christi 

Castile-La Mancha 

9 June  


La Rioja Regional Holiday  

La Rioja  

9 June 


Murcia Regional Holiday  


13 June 


San Antonio 


24 June  


St John’s Day  

Catalonia & Valencia  

29 June 


Eid al-Adha 

Ceuta & Melilla  

25 July  


National Day of Galicia  


25 July  


Saint James’ Day  

Basque Country, Castile and Leon & Navarre  

28 July  


Day of the Institutions  


5 August  


Our Lady of Africa 


15 August  


Assumption of Mary  


2 September 


Day of Ceuta  


8 September  


Asturias Regional Holiday  


8 September  


Extremadura Regional Holiday  


8 September  


Our Lady Victories  


11 September  


National Day of Catalonoia  


15 September 


Cantabria Regional Holiday  


9 October 


Valencian Regional Holiday 


12 October 


Fiesta Nacional de Espana 


1 November 


All Saints’ Day  


9 November 


Virgin of Almudea 


3 December  


San Francisco Javier 


6 December  


Constitution Day  


8 December 


Immaculate Conception 


25 December 


Christmas Day  


26 December 


St Stephens Day  



Employees are entitled to paid leave to attend a family member’s funeral. The duration of this leave may vary based on the specific circumstances of the relationship. 

Employees may be entitled to special leave for personal reasons, such as relocation, caring for a sick family member, or other urgent situations. The specific terms and duration of the leave may vary. 

Trade union representatives are entitled to leave for union activities and negotiations, as established in the collective bargaining agreements. 

A pregnant employee is entitled to 16 weeks of paid maternity leave when there is a newborn, with the potential to increase depending on certain circumstances. For twins, the term rises to 18 weeks, this rises to 20 weeks for triplets. There is also an additional two-week period for children with disabilities.

The 16 weeks of maternity leave consists of two periods:  

Compulsory leave for the first 6 weeks after birth. 

Remaining leave for the additional 10 weeks of a full absence or 20 weeks of half-day absences, which may be taken anytime up to one year later (with at least 15 days’ notice). 

Anyone contributing to the social security system benefits from paid maternity/paternity leave and child benefits. Maternity benefits include medical, prenatal, and postnatal care for pregnant women. Mothers also receive 100% of statutory base pay for 16 weeks of pregnancy leave. In addition, the benefit includes 2 daily paid half-hour breaks for mothers who breastfeed for express milk. 

Also known as ‘permiso de paternidad’ provides fathers with certain rights and benefits when it comes to taking time off from work after the birth or adoption of a child. Here are some key points regarding Spanish paternity leave:  

  • Duration: Fathers are entitled to 16 weeks of paternity leave which can be taken immediately after the birth of a child. The logic is to punish the women’s career less.  
  • Benefits: During paternity leave, fathers are entitled to receive a percentage of their regular salary as a benefit. The specific amount and calculation method may vary depending on company and the employees working contract.  
  • Sharing with the mother: In some cases, paternity leave could be shared between the father and mother, allowing both parents to take time off work to care for the child.  
  • Documentation and Notification: To take advantage of paternity leave, fathers were typically required to provide the necessary documentation to their employee and follow the notification procedures specified by their company or collective agreement. 

Setting up a legal entity in Spain

Setting up a legal entity in Spain can be a complex process, depending on the type of business you want to establish.   Here are the common legal entity options in Spain and the steps to set them up:

This is the simplest form of business ownership. You operate the business as an individual and there’s no legal distinction between your personal and business assets. To achieve this, you need to register with the local tax authority and obtain a tax identification number (NIF).  


This is a popular choice for small to medium-sized businesses and requires at least one shareholder (can be outside of the Country) and a minimum share capital of €3,000. 

The steps to complete this include: Registering the company’s name with the Central Commercial Registry, draft the company’s articles of association and deed of incorporation and have them notarised. Then you must apply for a tax identification number (NIF) for the company and register the company with the Tax Office and Social Security.  

This is suitable for large businesses and requires at least one shareholder and a minimum capital of €60,000. The steps to set this up are similar to an S.L, but a higher minimum capital is needed.  

If you have a foreign company and want to establish a presence in Spain, you can set up a branch or subsidiary. Then, register the branch or subsidiary with the commercial registry tax office and appoint a legal representative and provide financial statements from the parent company.  

Suitable for businesses with a cooperative structure but you must register the cooperative with the Central Cooperative Registry, draft and notarise the cooperatives bylaws and obtain a tax identification number (NIF) for the cooperative.  

Country nuances

Interested in expanding into Spain?

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