Hire employees in Spain

Quick answers

The questions leadership teams ask first, answered directly. Detail follows further down the page.

Hiring routes compared

Foreign companies have to weigh speed, setup cost, corporate tax exposure and labour liability. Here is how the three routes stack up.

What an employee costs in Spain

Every employee is enrolled in the General Social Security Regime, administered by the TGSS. Contributions are a percentage of the monthly contribution base (gross salary including prorated bonuses), capped at about €4,720.50 a month or €56,646 a year. The employee's own share is around 6.5%.

For a Madrid software engineer on €55,000 gross, budget roughly €74,000 all-in, of which about €17,600 is statutory contributions. Ask us for a cost model with the current contribution cap applied.

Payroll and tax

Spanish payroll runs monthly, usually paid between the 25th and the last business day. The defining feature is the 14-payment structure (14 pagas) under Article 31 of the Workers' Statute: twelve monthly salaries plus two extraordinary payments, customarily in June and December. Where the convenio allows, the two bonuses can be prorated into 12 equal payments; the social security base is identical either way. Every employee gets an itemised payslip (nómina).

Filing and withholding

Employers report hires, exits and sick leave to the TGSS in real time through Sistema RED, and the TGSS calculates the monthly settlement itself. The employer withholds personal income tax (IRPF), remitted monthly or quarterly on Form 111, at a rate set from the employee's Form 145. IRPF is progressive with a state and a regional scale: roughly 19% up to €12,450, 24% to €20,200, 30% to €35,200, 37% to €60,000, 45% to €300,000, and 47% to 50% or more above that by region. Qualifying inbound hires can opt into the special inpatriate regime (the Beckham Law) and pay a flat 24% on Spanish employment income up to €600,000 for six tax years, if they apply within six months.

Statutory minimum wage

The government sets the national minimum wage (Salario Mínimo Interprofesional, SMI) each year by Royal Decree after consulting unions and employer federations, expressed as a monthly figure over 14 payments with a prorated 12-payment equivalent. In practice the convenio sets a higher floor: the IT and consulting agreement puts Group 1 roles at €24,000 to €38,000 or more. Salaries above it can carry an absorption clause so future increases are netted against the voluntary supplement.

Leave and mandatory benefits

• Paid vacation. 30 calendar days (22 working days) per year under Article 38 of the Workers' Statute; many convenios give 23 to 25 working days. It cannot be paid out in cash during employment, only in the final settlement. The calendar must be fixed two months ahead.
• Public holidays. 14 paid, non-recoverable days: 8 national, 4 set by the autonomous community and 2 by the municipality.
• Extraordinary payments. Two statutory bonuses a year, in June and December unless prorated.
• Sick pay. For non-work illness, days 1 to 3 are unpaid unless the convenio says otherwise, the employer pays 60% of the base from day 4 to 15, then the TGSS or mutua pays 60% to day 20 and 75% from day 21.
• Birth and childcare leave. 16 weeks for each parent, equalised, paid at 100% by social security up to the maximum base. The first 6 weeks are mandatory after birth; the remaining 10 are flexible within the first year. Unpaid parental leave of 8 weeks per child runs until the child turns 8.
• Family leave. 5 business days for hospitalisation of a close relative, 4 days a year for family emergencies, 15 calendar days for marriage.
• Occupational health. A prevention plan, an accredited external prevention service and an annual medical offer are mandatory.
• Equality and pay transparency. Every employer, regardless of size, must keep a gender pay registry. From 50 employees you also need a registered equality plan, a whistleblowing channel and a 2% disability employment quota.
• Working time. 40 hours a week on an annual average, often 37.5 to 38.5 under the convenio, 9 hours a day, 12 hours between shifts and 1.5 days of weekly rest. Overtime is capped at 80 hours a year. Daily clock-in records for every employee are mandatory, and a written digital disconnection policy is required.

Termination and notice periods

Since the 2021 labour reform every contract is presumed permanent (contrato indefinido); temporary contracts survive only for production circumstances or to replace an absent worker. Probation must be in writing and is capped at 6 months for qualified technical staff and 2 months for others (3 in firms under 25 people), unless the convenio sets otherwise. During probation either side can end the contract with no cause, notice or severance. After that, the Workers' Statute gives you two lawful grounds and a costly third outcome.

• The dismissal letter carries the case. A disciplinary letter (carta de despido) must set out the precise facts, dates and infractions. Objective severance must be paid when the letter is delivered. Get the form wrong and the dismissal is unfair regardless of the merits.
• Conciliation first. The employee files with the regional conciliation service (SMAC) before any lawsuit. Most cases settle there at the 33-day rate, tax-exempt up to €180,000.
• Null dismissals. Dismissing anyone who is pregnant, on birth leave or on family care leave is void (despido nulo): reinstatement with full back pay. Employee representatives are protected during their term and for a year after.
• Final settlement. Every exit needs a finiquito covering final salary, untaken vacation, prorated bonuses and severance.
• Collective thresholds. Ten dismissals in 90 days in a firm under 100 staff (10% from 100 to 299, 30 from 300) triggers an ERE with a 15 to 30 day consultation period.

Can I use independent contractors?

Only for genuinely independent specialists, and Spain enforces some of the strictest classification rules in the EU. Article 1 of the Workers' Statute presumes employment where there is dependency (you set schedules, KPIs or supervision), alienation (the results and profits belong to you and the worker bears no business risk) and you supply the tools, email and hardware. An autónomo earning 75% or more of their income from you is an economically dependent worker (TRADE) with a registered contract, and that status offers no protection if you direct daily tasks. When the Labour Inspectorate finds a false autónomo, the TGSS reclaims four years of employer and employee contributions with a 20% to 50% surcharge and interest, fines of €3,750 to €12,000 per worker apply under LISOS, the worker becomes a permanent employee with retroactive seniority and convenio pay, and systemic cases reach Article 311 of the Penal Code, which carries prison terms for directors. An EOR is the compliant alternative for anyone who works like an employee.

The legal framework in brief

Spanish employment law runs on a strict hierarchy: EU law, the Constitution, the Workers' Statute, then the sector or provincial convenio, which the individual contract may only improve on. The statutes you will hear most:

• Workers' Statute (Estatuto de los Trabajadores, RDL 2/2015). Contract types, probation, wages, working time, dismissal and severance.
• Collective agreements (convenios colectivos). Binding by sector and province; set wage tables, hours, overtime and job groups.
• General Social Security Act (LGSS, RDL 8/2015). Contribution bases, health cover, temporary disability, birth leave and pensions.
• LISOS (RDL 5/2000). The infringements and sanctions code the Labour Inspectorate enforces.
• Labour Reform (RDL 32/2021). The presumption of permanent contracts and the narrow temporary exceptions.
• Remote Work Law (Law 10/2021). A written remote work agreement and expense compensation once 30% of hours are remote.
• Occupational Risk Prevention Law (Law 31/1995). Prevention plan, external prevention service, medical checks.
• Equality laws (Organic Law 3/2007, RD 901/2020 and 902/2020). Equality plans from 50 staff and a pay registry for all.
• GDPR and LOPDGDD (Organic Law 3/2018). No covert surveillance, device monitoring only under a published policy, the right to digital disconnection.
• Whistleblowing Law (Law 2/2023). An internal reporting channel from 50 employees, with fines up to €1,000,000.

Where the talent is

Spain is the fourth-largest economy in the EU. It produces over 35,000 STEM graduates a year, and senior technical talent costs roughly 30% to 50% less than equivalent roles in the UK, Germany or the United States. The Startup Act has made Barcelona, Madrid and Málaga leading destinations for international engineering centres and multilingual customer experience operations.

This guide is general information, not legal, tax or immigration advice. Spanish employment, social security and tax rules change regularly through Royal Decree, collective bargaining and labour court interpretation. Confirm current figures with a qualified adviser or with Dryft before acting. Last reviewed September 2026.