Spain Employee Compensation & Benefits
Capital
Madrid
Official Language
Spanish
Currency
Euro
Payroll cycle
Monthly
Quick facts about Spain
Boasting some of Europe’s most beautiful landscapes, Spain is one of the most important economies in the European Union. Madrid and Barcelona are home to important multinational companies, including Amazon, McDonald’s, Microsoft, and Oracle. Known for its work-life balance, Spain is a talent hotspot for companies looking to hire top talent internationally.
This article gives you all the information employers looking to hire in Spain need to understand about mandatory and supplemental benefits, and how an EOR service like Via can help companies remain compliant while expanding internationally.
Mandatory compensation and benefits in Spain
Spanish laws typically favor employees over employers, especially when it comes to offering benefits.
Social Security
Both employers and employees are required to pay into the Spanish social security system for benefits like medical insurance and unemployment.
Employer contributions break down as:
23.6% for Social Security
5.5% for Unemployment
0.2% for Salary Guarantee Fund
0.6% for Professional training
When added up together, the contributions equal 29.9% of each employee’s salary.
Employee contributions break down as:
4.7% for Social Security
1.5% for Unemployment
0.1% for Professional Training
The total for employee social security contributions is 6.4%.
Employee income tax brackets
In Spain, the withholding tax for employees is set up on a progressive tax scale. The deductions from employees' salaries are dependent on their income.
Employee Income tax breaks down as:
Range | % | |
|---|---|---|
0 EUR | 12,450 EUR | 19% |
12,451 EUR | 20,200 EUR | 24% |
20,201 EUR | 35,200 EUR | 30% |
35,201 EUR | 60,000 EUR | 45% |
60,001 EUR | 300,000 EUR | 45% |
300,001 EUR | 47% |
13th month salary and holiday pay
The employer must provide 13th-and 14th-month salaries in Spain, as they are mandatory according to federal law. Most employers choose to split the employee salary payments into 2 installments, with 1 installment in July and 1 installment in December as part of the employee’s annual salary.
Paid leave
In Spain, employees are entitled to 30 calendar days (22 business days) of paid time off per year .
Some employers may opt to give their employees additional leave depending on the collective agreement put into place at the time of hiring.
Public holidays
There are 10 public holidays that employees are always entitled to have off in Spain. There are also some local holidays that are recognized in each region as a holiday as well, especially in Catalonia.
The 10 standard holidays in Spain are:
New Year’s Day
Good Friday
Labor Day
Assumption Day
Spain’s National Day
All Saints’ Day
Spanish Constitution Day
Immaculate Conception
Christmas Day
Christmas holiday
Sick days
In the case of serious illness or accident, employees are entitled to their temporary disability benefit through their social security for sick pay. This rate is 60% of their regular monthly salary.
In cases of common disease or non-work related injury, employees are paid as followed:
1-3 days at 0% of regular salary, unless agreed upon by employer in employment contract
4-15 days at 60% of regular salary paid by employer
16-20 days at 60% of regular salary paid by social security
21 days at 75% of regular salary paid by social security
Maternity leave
New mothers are entitled to 16 weeks of maternity leave in Spain. They have the option to ask for this leave to be increased up to 18 weeks in the event of birth complications.
This breaks down as 6 weeks of mandatory leave that new mothers must take following the birth of the child, with the remaining 10 weeks as either full day absences or 20 weeks of half day absences. The remaining leave must be taken within the first year of the child’s birth.
Employees on maternity leave are paid directly by the social security fund. This is paid as a benefit equal to 100% of the mother’s base pay.
Paternity leave
New fathers are entitled to 16 days of paid paternity leave. For same-sex couples, both parties can take leave after adopting a child. As with maternity leave, 100% of parental leave is paid through the social security fund at the employee’s base pay.
Other leave
The collective agreement between employer and employee will break down any additional leave that employees are entitled to have off.
Some common leave breakdowns are:
2 years of unpaid leave to care for a terminally or seriously ill family member
2 days of unpaid leave to care for a sick family member
2 weeks of unpaid leave for disabilities with a child, foster care, or adoption
2 days of paid leave to mourn the death of a family member
1 day of unpaid leave to move
Up to 15 days of unpaid leave for marriage and honeymoon
Paid leave for jury duty or other public obligations with proof of summons
Overtime pay
Employees in Spain are not allowed to work more than 40 hours in one work week without additional pay. Employees are allowed to work a maximum of 80 total hours of overtime in 1 year. The compensation for overtime must be stipulated in the employment contract.
Working week
The normal work week in Spain is Monday-Friday.
Recommended benefits in Spain
While some benefits in Spain are mandated by the government, employers should consider offering supplemental benefits to their employees to attract top talent and reward their employees for their hard-work.
Pension
There is a mandatory retirement benefit that is set up in Spain through the social security system. However, employers can opt to give their employees an added pension by matching their contributions in the collective bargaining agreement.
Business travel reimbursements/per diems
In Spain, employers are not required to give their employees added reimbursements for travel. Many employers choose to reimburse their employees for travel time and give added bonuses when they commute to the office.
Professional learning resources
Another supplemental benefit that employers in Spain give employees is professional learning seminars. Large companies in particular choose to train their employees through these added resources to ensure they can leverage the latest technology platforms.
Child care stipends
One way to both avoid employees missing work and show them you care about family is to reimburse them for childcare.
Education stipends
Some jobs in Spain require extra education. Employers can pay or reimburse their employees for choosing to further their studies. This supplemental bonus not only rewards employees for continuing their education, but is also a great way to improve company performance by encouraging employees to go back to school in fields related to their job.
Meal vouchers
Another great incentive for employees is to either provide them with meals while they're working or reimburse them for their meals. As Spain has a more spread out day and rewards work/life balance, giving your employees reimbursements for their meals will both reinforce your commitment to maintaining work/life balance and help them cut extra food costs.
How to pay workers and administer benefits in Spain
To pay workers and administer benefits in Spain, employers have a few options:
Open an entity. This is a good choice for companies that have a commitment to expansion. However, the process can be lengthy and costly.
Partner with a global EOR. Partnering with an EOR saves time and money. As your employer-of-record in Spain, an EOR like Via already has established entities and the necessary knowledge to legally hire and pay employees.
Pay them as contractors. Keep in mind that if you hire employees as independent contractors, you will need to make sure they are not treated as full-time employees and follow all Spanish labor and compliance laws to avoid legal repercussions
Partnering with Via for compensation and benefits in Spain
Companies of all sizes want to hire employees in Spain, but don’t know how to navigate the country’s complex social security and benefit system. Via makes hiring Spanish talent and building your global team seamless. With our easy-to-use platform, Via helps you manage local HR processes for direct employment such as work visas & permits, benefits, payroll, background checks, and more. Our team of local labor lawyers and on-the-ground experts ensure that your company remains compliant while expanding abroad. As your employer-of-record/entity in Spain, Via assumes responsibility for all legal compliance, so that you can focus on what matters: recruiting and managing your team.
With Via’s transparent pricing, you can pay full-time employees or contractors in Spain with no hidden set-up fees, no foreign exchange or transaction fees, and no minimums–start with 1 employee and scale up at your own pace.
