Spain

Currency CurrencyEuro (EUR) Working Time Work Week40 hours Employer Taxes Employer Taxes 29.9%

Hire in Spain

Get the best talent in Spain. Let Lano do the heavy lifting. We’ll help you hire the best full-time employees or contractors, saving you from the pain of establishing a legal entity. No need to worry about complex local laws or tax requirements. From compliant contracts to global payroll, we’ve got you covered. 

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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.

Basic Facts about Spain

  1. official state name Kingdom of Spain (Reino de España)
  2. capital Madrid
  3. population 46.75 million
  4. languages Spanish, Catalan
  5. currency Euro (EUR)
  6. time zone UTC +1
  1. Show public holidays
    01 Jan New Year
    02 Apr Good Friday
    01 May Labour Day
    12 Oct Fiesta Nacional de España (National Day Of the Kingdom of Spain)
    01 Nov All Saints’ Day
    06 Dec Constitution Day
    08 Dec Immaculate Conception
    25 Dec Christmas Day

    In addition to these national holidays, there are several regional and local holidays including Easter Monday which is only observed in some parts of the country.

Employment Contract

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.

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) 
  • Workplace
  • Job description such as group of profession 
  • Base salary as well as other compensation or benefits
  • Working hours 
  • Total number of holidays
  • Notice periods for employment termination
  • Reference to collective agreements

Probation Period

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.

Working time

Working Hours and Breaks

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

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. 

Payroll

Payments to employees are made on a monthly basis. In most cases, payments are issued at the end of each month.

Minimum Wage

The monthly minimum wage in Spain is EUR 950 (as of 2021) which equals a minimum daily pay of EUR 33.66. The minimum annual wage is EUR 13,300 – mandatory 13th and 14th salary included. 

Sick Pay

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.

Bonuses

There are many collective agreements in Spain which mandate employers to pay their employees a 13th and 14th salary.

Taxes and Social Security Contribution

Employees and employers in Spain are subject to the following tax and social security contribution rates (as of 2021):

taxes
employers

25% corporate tax rate

21% VAT (standard rate)

employees

Individual income tax rates

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 300,00; 47%: above EUR 300,000

social security
employers

29.9% of employee’s salary including:

23.6% 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%

employees

6.35% of employee’s salary including:

4.7% general social security funds

1.55% unemployment insurance

0.1%  vocational training

Employee Benefits

Annual Leave

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.

Maternity Leave and Paternity Leave

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. 

Parental Leave

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. 

Additional Leave and Benefits

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. 

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Employment termination

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.
  • collective layoff 

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. 

Hiring in Spain?

Not sure if you should start with a contractor or go ahead and hire a full-time teammate in Spain? The Lano platform makes it easy to go from freelance to full-time employee. Get expert guidance from the Lano team to compare your options and keep growing.