Definitive Guide to Hiring in Spain

Hiring in Spain

Hiring employees compliantly in Spain means doing it yourself or using an Employer of Record like Global Expansion. You should be careful using independent contractor agreements in Spain so that you don’t run afoul of employment laws. To hire an employee compliantly and offer them mandatory benefits and compliant agreements, you can:

(a) Establish your own new legal entity, banking, accounting and payroll service in Spain; or

(b) use an Employer of Record like Global Expansion who can handle all of the details for you.

Labor Laws in Spain

Employment laws in Spain  are uniquely suited to the country’s way of life, and crucial to understand if you want to employ local talent in this country. Get the details on Spain employment laws and Spain policies here.

Employee Probation Period

• Probation period is as follows: -
  • 6 months for skilled technicians
  • 2 months for other employees

Annual Leave in Spain

• Each employee has the right to a minimum of one and a half days off per week, which may be accumulated by periods of up to 14 days.
• Workers are entitled to a minimum vacation period of 30 days, which cannot be paid in lieu.
• Employees are entitled to a minimum of thirty (30) days of paid vacation per year, which may differ by contract or collective agreement.

Holidays in Spain

• The Spanish government determines each year the valid holidays
• Each municipality can determine up to 14 holidays
• The following public holidays were set for 2020

Maternity Leave Spain

• Female employees who are pregnant are entitled to 16 weeks paid maternity leave.
• The mother must take six (6) of these full-time weeks right after birth.
• The remaining ten (10) can be exchanged for twenty (20) weeks of part time work if the employee reaches an agreement with the employer.

Paternity Leave Spain

• Fathers are entitled to 16 weeks of paternity leave

Sick Leave in Spain

• The maximum duration of sick leave is 12 months (365 days), which can be extended to another 6 months (180 days) if cure is foreseen in this last period of time
• During the first 3 days of illness, a worker is usually paid by the employer, although the law doesn’t provide for that.
• From day 4 to day 20 included, he/she will get 60% of his/her normal wage, while after day 21 he/she will get 75% of normal wage.
• From day 4 to day 15 included, the wage has to be paid by the employer, after day 16 it is to be paid by the INSS (Social Security System).

Working Hours in Spain

• A typical Spanish working day tends to be from around 8.30am or 9am to around 1.30 pm and then from 4.30pm or 5pm to around 8pm.
• The famous siesta, whilst declining in the larger cities, is still a major part of the working day in Spain.
• Siesta is a mid-afternoon break, usually around three hours, which gives employees a break from work during the intense midday heat.
• In Spain an employee can only be asked to work a maximum of 40 hours per week (calculated annually), and no more than 9 hours per day.

Overtime in Spain

• For part-time workers overtime is paid at the rate of 15% of the normal hours specified in the contract of employment.
• Collective agreements can authorize a higher limit, to a maximum of 60% of normal hours.
• In any case, the total hours worked cannot exceed the normal hours of full-time workers and the rules on rest periods must be respected.
• Overtime is voluntary.
• For Night workers, Overtime work is prohibited.

Termination of Employment in Spain

• The employment relationship can be terminated for various reasons.
• Such reasons include, but are not limited to, mutual agreement of the parties; reasons validly established in the contract, to the extent permitted by the law; resignation; retirement; death or disability of the employee or employer; force majeure; dismissal; and constructive dismissal
• Once any trial period has expired, ordinary employees may only be dismissed with cause (during the trial period, the contract may generally be terminated by either party freely).
• The basic causes for termination can be grouped into disciplinary causes and “objective” causes
• Disciplinary dismissals may be based on grounds such as repeated and unjustified lack of punctuality or attendance at work; lack of discipline or disobedience at work; breach of good faith and abuse of confidence in performing the job; or harassment of the employer or of any person who works at the company by reason of any of the protected grounds.
• “Objective” dismissals are dismissals that do not have to do with the employee’s (“subjective”) misconduct and that are instead based on employee incompetence, employees’ absence from work.

Notice Period in Spain

• There is generally no statutory notice period that an employer has to observe while terminating an employee.
• Notice period is determined by Collective agreements or an employment contract.
• It is usually 15 days for fixed term contracts or dismissals on objective grounds.
• If an employee resigns (whether hired under an open-ended or fixed-term contract), he or she must give the employer the notice defined by an applicable collective agreement or by custom and practice in the workplace concerned (generally, the notice period ranges from 15 days to one month, though some collective agreements require notice period of three months).

Severance in Spain

• In the event of dismissal for an objective reason (i.e. economic reasons, worker's capacity, at the time the written notice of dismissal is delivered to the worker, severance pay shall be simultaneously made available to the worker.
• Severance pay amounts to 20 days' wages per year of service with a maximum of 12 months' wages.
• In the event of less than one year service, a prorated severance pay is given to the worker (e.g. 10 days wages for 6 months).
• On the other hand, if a worker is dismissed for disciplinary reasons, he is not entitled to severance pay.  
• A worker who is dismissed for disciplinary reasons is not entitled to severance pay.

Spain Salary and Wages

13 / 14th Month Salary in Spain

• Yes
• There is no statutory requirement to pay the 13th or 14th month salary.
• However, it is a wide spread practice to divide the payroll in 14 months, where employees will receive double pay in July or August and double pay in December.
• After the economic crash, the government removed the 13th month payment for government employees.
• There is no evidence that the private sector did the same.

• Spain has a comprehensive social security system covering over 90% of the population.
• It includes healthcare (plus sickness and maternity), industrial injuries, unemployment insurance, old age (pensions), invalidity and death benefits.
• Social security benefits in Spain are among the highest in the EU, as are social security contributions.
• With the exception of sickness benefits, social security benefits are not taxed.
• Under the general regime, social security contributions are paid on salaries and wages.
• In Spain, the minimum monthly base is EUR 1,166.70 and the maximum is EUR 4,495.50 in 2023.
• However, during the year 2023 an increase in the minimum contribution base is expected, since this comprises the minimum interprofessional salary increased by one-sixth, and an increase of between 4.6% and 8.2% is being negotiated.
• The general contribution rates are 6.45% for employees, depending on the type of contract, and 30.50% for office work). 

Immigration Spain

• Workers who are not from EU countries need to obtain a Work Visa to be able to live and work in Spain. Without a Work Visa a company cannot legally employ non-EU citizens.
• To work in Spain as a highly-qualified worker, you must obtain:
  • a work and residence permit; and
  • work and residence visa.
• There are various types of Work Visas for Spain for different types of jobs and for different lengths of employment.
• Some of the most common types of work visas are:
  • Long-term Work Visas
  • Seasonal Work Visas
  • EU Blue Card
• Long term Visa for highly skilled workers
  • Unless you’re a citizen of the EU/EEA or Switzerland you’ll need a longer-term national visa (visado nacionale) if you intend to live, work, study or carry out research in Spain for longer than three months.
  • To work in Spain as a highly-skilled employee, non-EU citizens need to find a job which is listed as a ‘Shortage Occupation’. This is a job for which there is a lack of suitable candidates within the EU. The employer must then request a Work Visa from the Ministry of Labor.
• Seasonal Workers
  • The process of obtaining a Work Visa for Seasonal Workers is similar to the process for highly-skilled workers.
  • Employers need to apply for the visa on the worker’s behalf from the Ministry of Labor.
  • In addition to this process, seasonal workers need to demonstrate they have suitable accommodation arranged, their travel costs are covered, and that they will return to their country once the job has finished.
  • The visas are valid for the duration of the work contract.
• EU Blue Card
  • The EU Blue Card is for people who spent at least 3 years completing a higher education qualification which allows them to work as a skilled professional.
  • People who have a minimum of 5 years’ professional experience at a high level are also eligible.
  • The gross annual salary resulting from the monthly or annual salary specified in the work contract or binding job offer must be equal to or higher than the relevant salary threshold defined by the Member State (at least 1.5 times the average gross annual salary in the Member State concerned).
  • For 2015, Spain set the minimum salary threshold at: 33 908 EUR.

Value Added Tax (VAT) in Spain

• Spanish VAT is payable on supplies of goods and services carried out in Spanish VAT territory and on imports/intra-EU acquisitions of goods and services. There are three rates for the different types of goods and services, which are as follows:
• Ordinary rate of 21%, applied on regular supplies of goods and services.
• Reduced rate of 10%, applied on basic necessities (e.g. food and agricultural products not included in the ‘super reduced’ 4% rate, dwellings, other qualifying services). Live cultural events and cinema tickets are taxed at the reduced rate of 10% too.
• Super reduced rate of 4%, applied on basic necessities other than those classified under the reduced rate (e.g. bread, milk, books, medicine).
• In the Canary Islands, a specific tax is applied instead of VAT, called the Canary Island General Indirect Tax (IGIC). The ordinary IGIC rate is 7%, and the other IGIC rates are 0%, 3%, 9.5%, and 15% (20% for tobacco). IGIC is similar to VAT, with some significant differences, such as the tax exemption established for telecommunications services. Imports of tangible goods into the Canary Islands are subject to this tax.
• In Ceuta and Melilla, sales tax is applied instead of VAT.

Mandatory Benefits in Spain

• These are mandatory benefits as postulated by law
• Statutory benefits include sick leave, maternity leave, paternity leave, notice period, 13th pay, annual leave, public holiday and severance pay
• It also includes social security benefits such as healthcare (plus sickness and maternity), industrial injuries, unemployment insurance, old age (pensions), invalidity and death benefits.

Payroll Accrual in Spain

Country Accruals Additional Information

Description

Certain persons may be exempt from paying social security contributions, provided that the following requirements are met:

1) There is a social security agreement in force between Spain and the person's home country that allows this possibility.

2)The employment relationship with the home country employer is maintained and the person continues to pay social security

3)contributions to one's home country social security system.

4)The person's stay in Spain is limited to a few years (usually between one to five years, depending on the social security

5)agreement in force between Spain and the home country).

Payroll Accruals Additional Information

Accrued Benefits in Spain

Why use Global Expansion to hire in Spain

Establishing a branch office or subsidiary in Spain can be time-consuming, expensive and complex. With such a robust labor market in place, one must pay great attention to detail when structuring employment because Spain labor laws are complex.

The company also has a responsibility to comply with specific employment practices dictated by Spain law to maintain its good standing as an equal opportunity employer.

Global Expansion makes it easy for you to expand into Spain. We'll help you hire your candidate of choice, handle HR matters and payroll, and ensure that you comply with local laws without the burden of setting up a foreign branch office or subsidiary. In addition, you'll have complete control and direction over your employees.

We enable you to stay in control of everything. Our Spain Global Professional Employer Organization (PEO) and Employer of Record (EOR) solution provides you with peace of mind to focus on running your company and the security to enter new markets.