Before hiring employees in Spain, there are a few important things you’ll need to know. For starters, Spain groups jobs into different categories and tightly regulates salary ranges, working hours, and yearly vacation days within each of those groups.
Both indefinite and fixed-term contracts for employment can be provided in Spain, but employees typically prefer indefinite contracts because they call for higher compensation packages and provide better job security.
We know this might sound overwhelming—but it doesn’t have to be. A solution like Oyster eliminates the barriers for you. With Oyster, you can automate compliance across 180+ countries, easily managing HR and payroll—all in one, easy-to-use platform.
Get an overview of what you need to know when hiring in Spain below.
13th (June) & 14th (December) but can be prorated to 12 monthly salaries per year (More information on vacation bonuses and 13th/14th month salaries here)
Full-time employees in Spain must average a maximum of 40 hours per week of work, which is calculated on an annual basis. Unless an agreement is in place, employees can’t work for more than nine hours a day. Anyone who is under 18 years of age can only work for a total of eight hours each day. Employees can work a maximum of 80 hours overtime per year, which does not include overtime compensated with rest time.
Both indefinite and fixed term contracts for employment can be provided in Spain. A fixed term employment contract must have a justification for its finite length.
In Spain, the probation period is based on the employee's seniority. “Qualified” technical employees can have a probationary period of six months, whereas “unqualified” employees have a probation period of two months.
Spanish state pension calls for significant contributions from the employer (23.6% of an employee’s salary) while a Spanish employee contributes 4.7% of their salary. Occupational and private pension arrangements exist, but aren’t seen as necessary because of Spain’s generous state pension.
The statutory notice period for contracts in Spain is a maximum of 15 working days or 3 weeks. Longer notice periods in the Employment Agreement are not legally binding.
Employees in Spain are entitled to have a minimum of 23 business days of paid leave per year. The leave can be divided, as long as one of the periods is at least two weeks.
During the first three days of leave, the employer normally bears the costs of the employee’s full salary. From the fourth day, employees in Spain are entitled to receive payment from the social security system. The maximum sick leave in Spain is 18 months.
Maternity leave in Spain consists of 16 weeks’ paid leave at 100% full pay, funded by the social security system. Six of those weeks must be taken after the birth. In order to be eligible for the state paid leave, any employee over 26 years old must have worked over 180 days in the last seven years at any employer. Paternity leave in Spain consists of 16 weeks’ paid leave at 100% full pay, also funded by the social security system.
Employer taxation in Spain totals 31.95% of an employee’s salary and includes social security, unemployment, salary guarantee fund, professional training, and mutual/accident insurance. This applies to a salary cap of EUR 4,070 per month. Spanish VAT may apply depending on your specific circumstances.
Employees in Spain are taxed federally from 19% to 45% depending on their income bracket. Social contributions total 6.4% and include common contingencies, unemployment, and professional training.
In cases of termination due to objective economic or agreed performance issues, employees in Spain should receive 20 days’ salary per year of service with their employer. In cases of termination due to mutual agreement, the employee and employer can reach a separate arrangement.
Setting up a business entity everywhere you want to hire a new employee isn’t scalable—it takes too long and the legal fees are high. At the same time, understanding and adhering to the local labor laws and employee expectations can be complex and time consuming. And it’s hard to find reliable information on up-to-date employment information for all the countries where you’re considering hiring. Not to mention tracking down invoices and managing employee contracts over email and spreadsheets—that gets messy fast.
We can’t afford to take risks when it comes to compliance—we need to make sure we follow the local guidelines, especially when it comes to taxes and legalities.
With Oyster, you can manage HR and payroll, and automate compliance across 180+ countries—all in one, easy-to-use platform.