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This country guide is for general informational purposes only and should not be construed as legal advice, nor as binding based on your relationship with Lano. When using Lano's solutions, the specifics may depend on your EOR and Payroll setup with our partners. Although we update this guide regularly, it may not reflect current legal developments. Lano Software GmbH disclaims any liability for any actions you take or refrain from taking based on the content contained in this country guide.
For international companies looking to recruit new members for their remote global teams, Spain is a very good place to start the search. Not only are wages in Spain a lot lower than in Northern European countries, but the country’s high unemployment rate also represents a considerable advantage for international recruiters: Many highly skilled workers and talented graduates are currently searching for employment. As job prospects with local companies are little encouraging, international companies will find it fairly easy to find the right candidate to match their expectations.
Although, from a legal point of view, verbal employment agreements are also acceptable – except for part-time and temporary contracts – it is common practice among employers to set up a written contract when hiring a new employee in Spain. By default, employment contracts are considered to be permanent. Fixed-term contracts are only valid if they fall under one of the following two categories: replacement contracts and temporary contracts owing to production overload.
Employment agreements are to be written in Spanish with the possibility of adding an official translation. Salary and further compensation are to be indicated in Euros. Other mandatory information includes:
Identification of both parties
Date of commencement (and employment duration for temporary contracts)
Job description such as group of profession
Base salary as well as other compensation or benefits
Total number of holidays
Notice periods for employment termination
Reference to collective agreements
Probation periods are not mandatory in Spain. However, if an employer does decide to put a new employee on trial, the probation period must not exceed six months for technicians and two months for non-technicians.
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In Spain, working hours greatly vary depending on employment type and collective agreements that are in place for the respective industry. However, the following rules apply to every employee:
The maximum weekly working time is limited to 40 hours. In fact, many companies operate with schedules reduced to 37 or 38 hours per week.
Within one day, an employee cannot work for more than nine hours. However, the common standard is eight hours.
An uninterrupted rest period of at least 36 hours per week is mandatory.
Spanish employees are used to having an extensive lunch break of up to two hours, usually set between 2pm and 4pm.
Overtime work is usually subject to collective agreements. Employees can be compensated for overtime work either by additional pay or by extra time off. According to Spanish labour law, any overtime work exceeding 80 hours within one year is not permitted.
Payments to employees are made on a monthly basis. In most cases, payments are issued at the end of each month.
The minimum wage currently (February 2023) stands at EUR 1,080 per month when counting 14 payments per year.
Necessity and amount of sick pay in Spain depend on the actual number of sick days. During the first three days of sick leave, employees do not receive any payment, neither statutory compensations nor payments made by their employer.
Starting with day four and ending with day fifteen of sick leave, employers are obligated to pay their sick or injured employees 60% of their normal wages. If the employee’s absence from work exceeds fifteen days, compensation is still paid by the employer but can be deducted from the mandatory social security contributions.
After 21 sick days, the compensation rate rises from 60% to 75% of the employee’s monthly wage. The same rate applies when an employee is injured while working for the company. The maximum sick leave is 18 months.
There are many collective agreements in Spain which mandate employers to pay their employees a 13th and 14th salary.
Employees and employers in Spain are subject to the following tax and social security contribution rates (last review February 2023):
25% corporate tax rate
21% VAT (standard rate)
up to 47% *
National income tax rates ranging from 9.5% to 24.5%
Additional regional income tax rates
24.1% general social security such as healthcare
5.5% unemployment insurance
0.2% salary guarantee fund
0.6% for vocational training
Depending on the company’s activity, employers may have to make a contribution to employment injury insurance and employee protection ranging from 1.5% to 7.15%
4.8% general social security funds
1.55% unemployment insurance
0.1% vocational training
* Read more
National income tax rates are set as follows:
9.5%: up to EUR 12,450
12%: EUR 12,450.01 – EUR 20,200
15%: EUR 20,200.01 – EUR 35,200
18.5%: EUR 35,200.01 – EUR 60,000
22.5%: EUR 60,001 – EUR 300,0000
24.5%: above EUR 300,000
Each region sets its own regional tax rates individually. National and regional tax rates combined (on average):
19%: up to EUR 12,450
24%: EUR 12,450.01 – EUR 20,200
30%: EUR 20,200.01 – 35,200
37%: EUR 35,200.01 – EUR 60,000
45%: EUR 60,001 – EUR 300,000
47%: above EUR 300,000
Please note that the social security contributions indicated above do not necessarily reflect the actual employment costs. These may differ depending on the employment contract and due to other factors (e.g. 13th and 14th salary, health insurance allowances, accrual for severance pay, etc.).
Employees in Spain get 30 calendar days of paid annual leave. In addition, employees in Spain enjoy 14 public holidays per year – eight are national and the six remaining ones differ from region to region.
For a woman to be eligible for maternity leave benefits, the following conditions must be met:
the employee must have contributed to social security for at least 180 days over the course of the seven years prior to giving birth
during the employee’s entire work life, the total of days where social security contributions have been made must be at least 360
Maternity leave is 16 weeks, with a minimum of six weeks after birth. In case of multiple births, maternity leave is extended by two additional weeks per child. During this time, the employee receives maternity benefits from social security.
With the start of 2021, paternity leave increased to 16 weeks during which the father receives payments from the State.
Employees have the right to take parental leave until their child is three years old. Mothers of newborn children who decide to continue working are generally entitled to take one hour off each day for breastfeeding.
In case of adoption, employees can claim unpaid adoption leave. The maximum is 16 weeks and can be split between both legal guardians.
Newly married couples can take 15 days of marriage leave. In case of serious illness or death of a family member, an employee can claim two additional days of leave – four if they have to travel in order to fulfill their family duties. An extra day of leave can be granted when the employee moves to a new home.
In addition to employment termination by default – i.e. in case of a fixed-term contract – or voluntary termination by the employee, Spanish labour law provides for the following reasons for employee dismissal:
employee misconduct which results in immediate dismissal without any right to claim compensation from the employer
objective reasons, i.e. economic situation, organisational needs etc.
Unless an employee is dismissed by misconduct, employers have to respect a 15 days’ notice period and offer severance pay. The standard amount for severance pay is the equivalent to what the employee would earn in 20 days multiplied by the employee’s years of service.
This country guide is for informational purposes only and should not be construed as legal advice. The content of this guide contains general information, and although we update this guide regularly, it may not reflect current legal developments. Lano Software GmbH disclaims any liability for any actions you take or refrain from taking based on the content contained in this country guide.
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