Spain: A Guideline to Payroll and Employer of Record

Establish your presence globally with Neeyamo as we help you go beyond borders to manage your global payroll and hire new talent in Spain.

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When we think of olive oil, Italy often springs to mind, given its reputation for extensive olive oil usage and consumption. However, it might come as a surprise to learn that Italy isn't the world's leading supplier of olive oil. In fact, the title belongs to Spain, which produces more than double the quantity of olive oil compared to Italy. Spain not only accounts for nearly half of the world's olive oil production but also boasts a skilled and committed workforce in this industry.

Do your organization’s expansion plans require you to hire employees in Spain? Do you lack a physical entity in the country – a key requisite to hire local talent? Neeyamo assists organizations worldwide with the onboarding and managing employees in Spain -processing payroll, managing local compliance requirements, benefits, and more.

Tools And Instances

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Global Payroll

Neeyamo’s global payroll solution covering 180+ countries

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Global Work

A tech-based EOR solution to manage your extended workforce

Facts And Stats




Euro (EUR)

Official Language


Fiscal Year

01 January - 31 December

Date Format


Country Calling Code


Other Languages

Castilian, Catalan, Galician, Basque, Aranese

Time Zone

Central European Time zones (UTC⁠± 0 TO ⁠+1)

Global Payroll


Handling payroll for a widespread workforce can pose a significant challenge for any organization, and the added complication of compliance can worsen things. If companies spend more time processing payroll, it directly impacts day-to-day operations and their overall productivity. The solution to this problem is - Payroll Outsourcing.

Over the years, Neeyamo has observed these complexities and strived to provide a global payroll solution through a single technology platform - Neeyamo Payroll. Neeyamos global payroll services ease the process for companies looking to outsource their global payroll requirements and aid them in maneuvering the tricky payroll system in Spain.

Neeyamo's Payroll 3.0 has set in motion the era of single-touch payroll, which simplifies and accelerates the pace of the payroll process. Neeyamos payroll software provides the perfect solution for all your global payroll needs – for employees working in primary geographies, the long-tail region, remote or internationally located.

How is payroll done?

Neeyamo acts as your personalized Global Payroll Calculator, ensuring adherence to local regulatory requirements using multi-level controls. Providing timely and accurate payroll, courtesy of our experts worldwide and using a tech-based integrated smart helpdesk solution with seamless support experience manned by payroll experts - Neeyamo has all your payroll needs covered.

Payroll Taxes

Payroll tax is the percentage amount retained from an employee's salary and paid to the government to invest in the general population's welfare. These are statutory in nature and are levied from both the employer and employee. Additional statutory contributions are made by employers towards aiding both short-term and long-term benefits for their employees.

Employee Taxes

Employee Payroll Contributions:

  • 4.70% Social Security
  • 1.55% Unemployment (General)
  • 0.10% Professional Training
  • 6.40% Total Employee Cost

Employee Income Tax

Up to 12,450 EUR 19%
12,451 EUR to 20,200 EUR 24%
20,201 EUR to 35,200 EUR 30%
35,201 EUR to 60,000 EUR 37%
60,001 EUR to 300,000 EUR 45%

Employer Taxes

Employer Payroll Contributions:

  • 23.60% Social Security (minimum monthly base is 1,125.90 EUR, and the maximum is 4,139.40 EUR)
  • 5.50% Unemployment (General)
  • 0.20% Salary Guarantee Fund
  • 0.60% Professional Training
  • 29.90% Total Employment Cost

Pension Reforms Law:

  • The law aimed to improve the social security system's sustainability and benefit adequacy to cope with an aging population and rising number of pensioners, among other things, by establishing a reserve fund, introducing a new social solidarity contribution, and gradually increasing the monthly earnings ceiling for calculating contributions and benefits at a rate higher than inflation.

  • The solidarity payment is 5.5% for wages of 100% to 110% of the maximum taxable wage, 6% for wages of 110% to 150% of the maximum taxable wage, and 7% for incomes of more than 150%.

  • The employee and employer special contribution rates are 0.1 percent and 0.5 percent of monthly covered earnings/payroll, respectively, and will increase gradually to 0.2 percent and 1.0 percent, respectively, by 2029.

Payroll Cycle


Undoubtedly, payroll is a critical process for any organization. Pay cycle in Spain refers to the period for which an organization pays its employees, and this can vary depending on the pay frequency that the organization chooses to adopt.


In Spain, the payroll frequency is monthly, and paid typically on the last day of the month.

13th Month Cycle

13th and 14th month salary payments are mandatory in Spain.

It is common practice for the annual salary to be split into 14 installments to account for the double salary payment, which the employer will pay in July and December, this is stipulated in the employee’s employment contract and collective agreements.

Global Work


EOR Meaning:

An Employer of Record (EOR) service provider helps you eliminate the hassle of handling complexities while onboarding a new employee in an international location. They help bridge the gap that otherwise mandates organizations to have a locally registered entity and a local bank account before making a job offer to an international hire.

An Employer of record (EOR) service provider acts as a legal employer, facilitates salary payments, and manages other statutory requirements such as health insurance, payroll taxes, and employee benefits, ensuring compliance with local tax laws and regulations.

The EOR industry allows organizations to focus on collaborating with the employee in Spain for operational tasks, with the knowledge that they have a cost-effective solution to support their global payroll & HR requirements as they continue their global expansion.

HR Mandates and Practices

Minimum Wage

Effective January 1, 2024, the minimum wage in Spain has been increased to €1,134 gross euros per month, with 14 annual payments.

Workers, especially young people and women, are expected to benefit from this change.


Overtime pay is required if the weekly cap of 40 hours of work is exceeded. A single employee is only permitted to work a total of 80 additional hours a year in overtime. Following collective bargaining agreements, overtime work schedules and remuneration are closely regulated.

Data Retention Policy

Any document of the employees must be related to identification, social security, and contracts; these documents must be recorded for four years.

Hiring and Onboarding Requirements


If you need to hire employees for your business in Spain, you shall register them at the Social Security General Treasurership (Tesorerí¬a General de la Seguridad Social). From that moment, you will have ten days to register your employment contract with the Spanish Institute of Employment (Instituto Nacional de Empleo -INEM). It is illegal to hire workers without any contracts or Social Security; Labor Inspectors may fine you for unregistered employees.


The following documents can be asked/ collected for the onboarding process:

  • NATIONAL EMPLOYEES: Documento Nacional de Identidad (DNI) or ID card document and Social Security Number
  • EU EMPLOYEES: (Número de Identificación de Extranjero – NIE) NIE Number document and Social Security Number
  • NON-EU EMPLOYEES: work permit card (visado de Trabajo y residencia), NIE number document, and Social Security Number


A probationary period should be specified in the contract of employment. If it is not regulated in the applicable collective bargaining agreement, it will generally last:

  • six months for certified technicians; and
  • two months for unqualified employees (or three months in companies with fewer than 25 employees).


National Holidays

Employees are entitled to 14 public holidays per year. Eight holidays are observed countrywide:

In addition, each region decides on four additional holidays of its own and each local council on two.

  • Jan. 1: New Year's Day
  • Jan. 6: Epiphany
  • Mar. 20: San Jose Festival
  • Apr. 6: Maundy Thursday
  • Apr. 7: Good Friday
  • May 1: Labor Day
  • May 2: Madrid Festival
  • May 15: Feast of St. Isidro
  • Aug. 15: Assumption of Mary
  • Oct. 12: Hispanic Heritage Day
  • Nov. 1: All Saint's Day
  • Nov. 11: Our Lady of Almudena
  • Dec. 6: Day of the Constitution
  • Dec. 8: Feast of Immaculate Conception
  • Dec. 25: Christmas

Annual Leave

Employees have a right to a minimum of 30 calendar days’ paid annual leave, which cannot be replaced by financial compensation during employment. On termination of employment, the employer must compensate the employee for any unused annual leave entitlement.

Unused leave does not generally carry forward to the next year, although there are exceptions to this rule (e.g., pregnancy or maternity leave).

However, annual leave can be increased by an individual contract or collective bargaining agreement.

Sick Leave

General Social Security Act, 2015, arts. 216, Employees are entitled to up to 12 months of sick leave. Subject to obtaining a doctor’s certificate, sick leave can be extended by up to a further six months.

For work-related injuries and illnesses:

The employee is entitled to sick pay from the employer equal to 75% of their reference salary (capped) from day one onwards. This amount can be recovered from Mutua Madrileña (a non-profit Spanish insurer).

Sick pay for non-work-related injuries and illnesses:

  • days one to three – there is no statutory requirement for either the employer or the state to pay the employee;
  • days four to 20 – the employee is entitled to sick pay from the employer equal to 60% of their reference salary (capped). This amount cannot be recovered from the state, and
  • from day 21 onwards – the employee is entitled to sick pay from the employer equal to 75% of their reference salary (capped). This amount can be recovered from the state.

After 18 months’ sick leave, the employer will no longer be obliged to pay sickness-related social security contributions for the employee.

Maternity Leave

Pregnant employees are entitled to 16 weeks of maternity leave and two extra weeks per child in cases of multiple births. Of these 16 weeks, six must be taken by the mother immediately after the child's birth; the rest can be taken before childbirth if the mother chooses to do so. During the remaining ten weeks, both parents may take maternity leave simultaneously or successively, provided no more than 16 weeks of leave is taken in total between the two parents. 

The social security system pays the employee's subsidy during maternity leave, which is equal to 100 percent of the employee's social security contribution base.

Pregnant employees also have the right to paid leave for prenatal examinations and preparation for childbirth. 

Paternity Leave

Fathers of newborns are entitled to 16 weeks of paid paternity leave. The first six weeks must be completed immediately after childbirth, while the remaining ten weeks can be taken anytime prior to the child's first birthday.

The 16 weeks are 100% paid by the state and non-transferable, which means that if one parent decides not to take time off, the other parent cannot take advantage of it - Art 48(7) of the Workers’ Statute.

Other Leave

Training Leave: Employees with at least one year’s service with their employer are entitled to 20 hours of paid time off per year to undertake vocational training linked to their employer’s area of activity.

Marriage Leave: Employees can take 15 days of paid leave for marriage. It starts on the first working day following the wedding day.

Moving House Leave: The employees can take one day of paid leave for moving or shifting residence.

Serious Illness Leave: (ART. 37.3 Worker’s Statute) Employees can take leave for two days in case of the birth of a child or the death, accident, or illness of a close relative and can also take four days if travel is required.

Parental Leave: Employees with at least one year’s service may take unpaid leave for the purpose of caring for a child, with a maximum duration of three years from the date of birth or court order, but only if more than four years have passed since the last unpaid leave. 

For the first year, the employee’s position will be reserved, and for large families, this will last for a maximum of 15 months. However, in special cases, this period could be extended to a maximum of 18 months.

Adoption Leave: Parents who adopt or act as foster parents are entitled to up to 16 weeks of leave when:

  1. the child is aged under six, or
  2. the child is aged over six but suffers from a physical or mental disability.

The first six weeks after birth, foster care, or adoption will be mandatory. The remaining ten weeks may be enjoyed in weekly periods, accumulated or interrupted, within the twelve months following the judicial resolution by which the adoption is constituted or the administrative decision of custody for the purposes of adoption or foster care.

The employee is entitled to two extra weeks per child in the event of multiple adoptions and fostering. If both parents work, they can share this leave, which can be taken either concurrently or successively. If taken concurrently, the total length of absence cannot exceed the maximum permitted.

In the event of disability of the son or daughter at birth, adoption, in custody for adoption or foster care, the employee will have an additional duration of two weeks, one for each of the parents. The same extension will proceed in the case of birth, adoption, custody for adoption, or multiple foster care for each son or daughter other than the first.

Pay – If the employee satisfies the social security eligibility requirements, they will be entitled to social security benefits equal to 100% of their average monthly salary

Handicapped Family Member Leave: The Statute of Workers also guarantees employees unpaid leave of up to two years to take care of a close family member in the event the family member is handicapped or is deemed by the health authorities to be unable to execute the most basic activities of daily living without help from a third person.

Voluntary Unpaid Leave: Employees with at least one year of seniority in the company have the right to be recognized as having the possibility of taking a voluntary leave of absence for a period of no less than four months and no more than five years. This right may only be exercised again by the same worker if four years have elapsed since the end of the previous voluntary leave.  

Temporary employees are entitled to unpaid leave on the same basis as permanent workers

Voting Leave: Employees are entitled to comply with paid leave for a public obligation or to execute union duties and worker representation. 

Employees are entitled to take up to four (4) hours without loss of pay to vote, provided polling stations on the day of the election are open during employees’ working hours.

Job Research Leave: When the termination of the contract for objective reasons is proposed, the worker is entitled to paid leave of six hours per week during the notice period in order to look for a new job.

Gender Violence Leave: Suspension of the contract for women victims of gender violence. 

In the case foreseen in letter n) of section 1, paragraph 1 of article 45 of the Workers' Statute, the period of suspension shall have an initial duration that may not exceed six months unless it appears from the judicial protection proceedings that the effectiveness of the victim's right to protection requires the continuity of the suspension. In this case, the judge may extend the suspension for periods of three months, with a maximum of eighteen months.

Menstrual Leave: As per the labor code, Spain’s parliament approved legislation granting female employees government-paid leave to recover from severe menstrual pain.  

The new provision, or the act, will be applicable from June 1, 2023.  

Women in Spain will have the right to three days of menstrual leave a month, with the option of extending it to five days.

Sick leave due to termination of pregnancy: A situation of temporary incapacity is also recognized for a woman who interrupts her pregnancy, while she receives medical care from the Public Health Service and is unable to work.  

If the termination of pregnancy is due to an accident at work or occupational disease, it will be considered as a situation of sick leave due to professional contingencies (accident at work) 

The benefit will be paid by the social security from the day after the day of sick leave, and the employer will pay the full salary for the day of sick leave. 

The woman’s pregnancy benefit is paid from the first day of the 39th week unless she is at risk during pregnancy. 

New sick leave for pregnant women: The woman’s pregnancy benefit is paid from the first day of the 39th week unless she is at risk during pregnancy. 

Women having the same qualifying periods as that required for the childbirth and childcare benefit 

  • If she is under 21 years of age at the date of the start of the leave: None 
  • If aged between 21 and 26: 90 days within the immediately preceding seven years or 180 days in the entire working life 
  • If over 26 years of age: 180 days within the immediately preceding seven years; or 360 days in the entire working life.

Social Security will pay the benefit from the day following day one of the sick leave until the date of childbirth, and the employer will pay the full salary corresponding to day one of the sick leave. 

Accident at work: Women will be entitled to paid sick leave and benefit from social security if there is an accident at work.


Notice Period

The minimum notice periods are set out in the law as follows:

  • dismissal on objective grounds (i.e., for economic, technical, or organizational reasons): 15 days;
  • expiry of the agreed term or completion of the agreed work (temporary contract): 15 days, provided the contract is over a year long.
  • Dismissals on disciplinary grounds do not require notice.
  • Collective bargaining agreements and individual contracts may contain different rules regarding notice periods.

Severance Pay

Only when an employer terminates an employment arrangement without cause is severance pay relevant (in this case, the severance pay would be for the same amount the employee would earn if they had been given notice).

An employment contract may be terminated by an employer either with the provision of a notice period or immediately with the payment of an indemnity in place of notice. It is also possible to combine the two, in which case a notice term is served and then an indemnification is paid for the remaining time.

Based on the employee's annual income at the time of termination, which includes contractual and statutory fringe benefits, the indemnification in lieu of notice is determined. Additionally, if an employer wishes to end a contract, it must adhere to the following legal requirements:

The reasons for the dismissal must be stated in a written notification from the employer to the employee.

Up to a maximum of 12 months' salary, the employer must offer compensation in the amount of 20 days' salary for each year of service, payable upon delivery of the written notice.

The contract must be terminated with thirty days' notice to the employee, starting from the moment the employee receives a formal notification.

If the dismissal is deemed unfair, the employer must pay up to 42 months' salary in damages or 45 days' pay each year of service (if hired before February 12, 2012, and 33 days after this date).



Foreign nationals may enter, remain, and work in Spain with a work visa. The employee must apply in person for the work visa, and applications must be made at least 90 days before departure.

Prior to hiring a candidate or filling a position requiring a high level of competence, firms must apply for a work visa from the Ministry of Labour. The work and residence visa will thereafter be issued by the Embassy or Consulate upon approval of the application by the Ministry of Labor.

For seasonal employees, there is a particular Work Visa in Spain, although the process for obtaining a visa is the same. Seasonal workers, however, must demonstrate that they have lodging plans, travel expenses are covered, and they will be returning to their home country after the task is finished.

Employee Background Checks

Legal and Background Checks

Background checks can be only be provided by the employee or candidate. The company is not entitled to request the criminal record of a job candidate during the recruitment process. It is not legally possible to demand a criminal record certificate from candidates, except in those exceptional cases in which, authorized by law and with the due guarantees, such a measure is contemplated.

Last updated on January 19, 2024

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