Employer of Record in Spain

Basic information

Capital: Madrid

Time zone: GMT+1

Language: Spanish

Currency Code:EUR

Human Resources at a Glance 

Contract Terms

– Names and details of employers and employees

– The employee’s date of birth

– posts

– Duties and Responsibilities

– Place of work

– Employment status (full-time, part-time, or temporary)

– The start and end dates of the contract

– Salary level

– Date of payment

– working hours

– Leave entitlements

– Termination of Employment

Guidelines Regarding Probation Period/Trial Period

If a probationary period is agreed upon (provided that the worker has not previously performed the same duties with the company under any type of employment contract, in which case the probationary period will be invalid), it must be made in writing.

The duration of the probationary period can be specified in the respective collective bargaining agreement and can range from 3 to 6 months. However, as a general rule, in the absence of any provision in the collective labor agreement, the probationary period may not exceed:

-Six months for specialists from universities and colleges

-All other employees for two months

-For enterprises with less than 25 employees, the probationary period for employees who are not college or college degree or above shall not exceed three months

If the term of a temporary fixed-term labor contract is less than six months, it shall be one month. In addition, training contracts, indefinite employment contracts to support entrepreneurs, and special employment contracts (domestic workers, senior managers, etc.) all have their specific probationary periods.

During the probationary period, the employer or the employee is free to terminate the contract without giving any reason or proving any reason, without prior notice, and without the right to claim any compensation from the employee or the employer. Workers can be transferred to higher-level positions for a maximum period of six months. They must rejoin their original work team or be promoted at the end of six months. There can be no probationary period if the worker has already held the same position in the employer, or in the case of contractual subrogation.

Regulations and Rules Regarding Working Hours

Spanish working time regulations state that employees (the Workers’ Code) must: The working week (annual average) must not exceed 40 hours. (Maximum working hours may vary according to collective bargaining agreements) may not exceed nine hours per day. Have at least 12 hours of rest before starting the next day’s work.

In August, the working week may not exceed 36 hours (“jornada intensiva”). The remaining 4 hours of each week (16 hours total for August 1 month) will be completed throughout the year. If the employee is willing to work 40 hours per week in August, it is advisable to sign an agreement of mutual understanding in this regard.

Break period: Employees who need to work more than 6 hours without interruption are entitled to a break of at least 15 minutes. Exceptions to these rules may apply to employees in certain industries and other specific employment relationships (senior executives, security guards, or hotel staff). Employees are entitled to a minimum of one and a half days of uninterrupted rest per week, up to a maximum of fourteen cumulative days, which includes Saturday afternoons or Monday mornings and all Sundays, as applicable.

Payroll Cost 

Employer costs are typically estimated at 31.98% of an employee’s salary.

Monthly cost

-Common Risks – 24.18%*

-Unemployment – 5.50%*

-Wage Protection Fund – 0.20%*

-Temporary illness and inability to work, death and survival – 1.50%*

-Professional Education – 0.60%*

-Work-from-home allowance – €50.00

-Mandatory disability fund contribution – 41 euros

-13th month salary – 1/12th month salary

-14th month salary – 1/12th month salary

 *The maximum salary is a donation of 4,720.50 euros

Annual cost

PRL training – 11 euros

One-time fee

Medical examination – 65.00 euros

Termination

Grounds 

Terminations must comply with complex rules and regulations in the employee’s country. Dismissal is always handled by the employer with the main stakeholders. This may include interim expenses for a particular dismissal case and necessary or recommended steps.

Dismissals in Spain can be complicated. An employer outside of the probationary period does not have the right to terminate an employee at will, and the dismissal must be justified.

– Employees are voluntary

– The parties agreed by consensus

– The employer is unilaterally based on:

– Probation period

– Objective reasons

– Disciplinary dismissal – The job is not for performance – The contract expires

Notice Period

The Labor Code requires a party seeking to terminate an employment agreement to give at least 15 days’ notice to the other party prior to termination. The parties to the contract may agree on a longer notice period.

Redundancy/Severance Pay

Disciplinary dismissal does not mean that the employee is entitled to compensation in the form of any severance pay from the company, unless a court ruling declares the dismissal unfair.

Severance pay resulting from objective termination is a tax-free payment of 20 days of service per year. This adds up to 12 months’ salary. If the judge finds the dismissal unfair, or if the company admits that the dismissal was unfair in the mediation room or in court, the relevant tax-free severance pay is 33 days of service per year, up to 24 months’ wages.

Severance pay is calculated based on two criteria: length of service and daily wage. In the case of objective or unfair disciplinary dismissal, severance pay is calculated by multiplying seniority by daily pay and number of days (20 days for objective dismissal and 33 days for unfair dismissal). The calculation of the daily wage takes into account the last 12 payments, and the company should include all wage concepts, including pay in kind and overtime pay. As a result, bonuses, incentives, and occasional payments are all included. Only the concept of additional pay should be excluded. Stock options are wages and are included in the compensation calculation.

Payment & leaveCompensation & Holidays

Salary Payment 

Employers in Spain must pay employees monthly or more frequently, depending on the employment contract or collective bargaining agreement. The total annual remuneration will be divided into 14 months:

12 months’ salary

June 13th month

14th month of Christmas

The 13th and 14th months must be paid between the 15th and 20th of each month. If an employee does not work for the entire month, it is calculated and prorated.

All payments must be made by check or direct bank deposit, and for payments by check, the employer must provide a pay stub indicating the amount of the payment and tax withheld, signed by the employee.

Payslip Payroll

Employees typically receive an official monthly payslip (“nómina”) at the end of each month. This legal document certifies the contractual relationship with the employer and the exchange of services provided and payments. The employee must sign two copies, one of which is kept by the employer and the other is kept with the employee. The payroll is divided into three different sections:

-The title must contain information about the employer and employee

-A body with information about working hours, earnings, and deductions

-The footer contains information about the rate used when calculating the payment

Annual Leave

Annual leave is stipulated in a collective bargaining agreement or individual contract and must not be less than 30 calendar days (usually equivalent to 23 working days). It may not be replaced by financial compensation. Leave entitlements for less than one year of service will be reduced proportionately. Whenever possible, each company’s holiday calendar is determined by mutual agreement between the worker and the employer.

Sick Leave

Employees are entitled to up to 365 days of paid sick leave if they have contributed 180 days to social security within the last 5 years. Employees have the option to extend their sick leave by 180 days. If an employee has not contributed to social security for 180 days in the last 5 years, the employee may be placed on medical leave without paycheck.

The first three days are unpaid and considered the qualification period. The amount paid for this type of leave and who pays it varies depending on the length of the leave.

Compassionate & Bereavement Leave

The employee is entitled to 5 days of paid leave if (i) the person residing with the employee, (ii) the employee’s civil partner, and (iii) a relative has suffered a serious accident or illness that requires inpatient or outpatient surgery for recovery at home.

Workers have the right to take time off work to care for a family member:

-The maximum term is three years

-Care for each child for one year (extendable by collective bargaining agreement) Care for persons related by blood or second degree marriage or similar, who are unable to care for themselves due to age, accident or illness and who are not engaged in paid work.

Maternity & Parental Leave

In Spain, maternity and paternity leave are combined into Permiso de Nacimiento. Each parent can take maternity/paternity leave for up to 16 weeks. Both parents must take compulsory leave for the first 6 weeks of the child’s life.

The INSS (National Institute of Social Security) pays parental leave, paid at the employee’s regular salary, up to a maximum social security base of 4495.50 euros/month, if the employee applies and is accepted. To be eligible, employees must have contributed to social security for at least 6 months in the last 7 years.

Regulations on breastfeeding times

Breastfeeding women have the right to be absent from work for one hour at a time when the infant is less than nine months of age, which can be divided into two periods, one at the beginning of the working day and the other at the end of the working day. Both parents can enjoy this leave if both are working.

The employee may choose to replace this right with a reduction of half an hour of working time ,or if the employee wishes, replace the leave after maternity leave with 15 calendar days of paid leave.

In Spain, there is no law that covers parental leave. However, employees may be eligible for maternity and paternity leave.

Tax and Social Security Information for Employers

Personal Income Tax

Individuals residing in Spain for tax purposes are generally required to pay personal income tax (PIT) on their worldwide income, regardless of where it originated. This income is taxed at a progressive rate after statutory deduction. Non-residents only contribute NRIT on their Spanish-sourced income.

Public Holidays 2024