Hiring Employees in Spain

I. Key Points in Employment Contracts

Labor Contracts

Contracts must be written in Spanish and can be bilingual. They must exist in written form and be signed by both parties.
Contracts must include: Name; DNI / NIE number; Address; Job category; Salary; Annual vacation; Contract start date; Contract type and duration; Contract working hours; Company collective agreement.

Part – time Employees and Interns: IC Contracts

It is recommended that part – time employees and interns use the Independent Contractor (IC) agreement.

II. Overview of the Statutory Welfare System

Salary Payment

Once a month.

Monthly Minimum Wage

€1,134 per month.

Probation Period

According to local labor laws, our minimum probation period is 0 days. You can extend it to the maximum probation period of 180 days allowed by law.

Employer Costs

Employer costs are generally estimated to be 31.98% of the employee’s salary.
Monthly costs:

• Common contingency costs: 24.18%
• Unemployment rate: 5.50%
• Wage guarantee social fund: 0.20%*
• Temporary illness, incapacity for work, death and survival: 1.50%*
• Professional education: 0.60％*
• Telecommuting allowance: €50.00
• Mandatory disability fund contribution: €41
• 13th – month salary – 1/12 of one – month salary
• 14th – month salary – 1/12 of one – month salary
• Maximum salary: €4,720.50
  Annual costs:
• PRL training: €11
• One – time: Medical examination: €80.00

III. Salary Payment and Statutory Leave Responsibilities

Individual Income Tax

The individual income tax rate ranges from 19% to 47%. Income tax is calculated on a progressive basis. Various other factors such as family status and the number of children may affect the overall tax rate.
Note: These tax rates are updated annually by the government.

• 19%: €0 to €12,450
• 24%: €12,451 to €20,200
• 30%: €20,201 to €35,200
• 37%: €35,201 to €60,000
• 45%: €60,001 to €300,000
• 47%: Above €300,000

Overtime Pay and Maximum Working Hours

• The standard working hours are 8 hours a day and 40 hours a week (1,800 hours a year). The standard working week is from Monday to Friday. Unless otherwise agreed, employees cannot work more than 9 hours a day. Employees can work a maximum of 80 hours of overtime per year.
• Overtime pay is mandatory and may be included in the salary. Time outside of standard working hours also counts as overtime. Employees can work a maximum of 80 hours of overtime.

Statutory Leave

Both full – time and part – time employees are entitled to 23 days of paid time off (PTO) per year. PTO accumulates at a rate of 1.92 days per month. Employees can enjoy annual leave after working for 1 month.
Workers, with prior notice and justifiable reasons, can be absent for any reason within the following periods and are entitled to payment:
a) When getting married, 15 calendar days/natural days of absence.
b) According to Article 37.3.b of the Workers’ Statute, “In case of birth or death of a relative (direct blood or in – law), accident, serious illness, hospitalization or surgery without hospitalization and requiring rest at home, 2 days of absence are allowed. If the worker needs to travel for this purpose, the absence period is 4 days.”
c) In case of the death of a spouse, parent or child (including possible displacement during this period), 4 days of absence.
One day of absence is allowed for changing the usual place of residence (moving).
Note: The minimum legal requirement is 23 days, and the most common leave is 25 days.

Public Holidays

Public holidays in Spain vary by region (municipality). Each municipality allows 14 bank holidays per year. These include:
a) 10 bank holidays set by the Spanish government
b) 2 regional holidays set by the local government
c) 2 municipal holidays set by the municipality
There are 10 national public holidays in Spain: New Year’s Day; Epiphany; Good Friday; Labor Day; Assumption of Mary; National Day of Spain; November 1st: All Saints’ Day; Constitution Day of Spain; Immaculate Conception; Christmas Day.

Other Leave

Maternity Leave

Maternity and paternity leave in Spain are combined under Permiso de Nacimiento. Each parent can take up to 16 weeks of maternity/paternity leave. Both parents must take 6 weeks of leave after the birth of the child. If an employee applies for and is approved for benefits, the INSS (National Social Security Institute) will pay 100% of the employee’s normal salary for parental leave, with a maximum social security base of €4,495.50 per month. To be eligible, employees must have paid social security contributions for at least 6 months in the past 7 years.

Regarding breastfeeding breaks:
Employees breastfeeding infants under 9 months old are entitled to take one hour of leave at a time of their choice, which can be divided into two periods, one at the start and one at the end of the working day. If both parents are working, either the mother or the father can take this leave.
Employees can reduce their working hours by half an hour to achieve the same purpose instead of taking this right, or they can decide to take 15 calendar days of paid leave after maternity leave.

Parental Leave

There is no legal provision for parental leave in Spain. However, employees may be entitled to maternity and paternity leave.

Sick Leave

If employees have paid social security contributions for 180 days in the past 5 years, they are entitled to up to 365 days of paid sick leave. Employees can choose to extend the sick leave by another 180 days. If employees have not paid social security contributions for 180 days in the past 5 years, they can take unpaid sick leave.

The first 3 days are unpaid and are considered an eligible period. Depending on the length of the leave, the leave pay is paid by different payers at different rates.

Expatriate Employees

Local minimum wage required for Split Payroll work visa

• Minimum salary: €38,844 per year (may change in real – time according to government requirements).

Labor Law Website

https://www.mites.gob.es/en/index.htm

IV. Dismissal Rules and Compensation Arrangements

Dismissal (Legal Requirements and Best Practices)

Notice Period

The minimum notice period is 15 days, but it may be longer in some cases. No notice is required during the probation period or disciplinary action.

Voluntary Resignation

Employees are allowed to resign at any time.
Compliance requirement: Employees must provide a signed letter of resignation 15 days before the last working day.

Dismissal during Probation Period

Both employers and employees are allowed to terminate the employment relationship at any time during the probation period.

Negotiated Dismissal

Both employers and employees are allowed to agree to terminate the employee’s employment relationship for any reason.
Common reasons:
The employee may be involved in disputes or litigation.
Employees cannot be dismissed without just cause.
The employee has negotiated the termination of the labor contract.

Just Cause Dismissal

Employers are allowed to dismiss employees for misconduct.
Reasons:
Multiple unexcused absences or being late for work
Disobedience or indiscipline at work
Verbal or physical attacks on the employer, colleagues or family members living with the employee
Breach of integrity and abuse of trust at work
Habitual alcohol or drug use that has a negative impact on work
Harassment based on race, ethnic origin, religion or belief, disability, age or sexual orientation, as well as sexual harassment or gender – based harassment against the employer or any other employee

V. Analysis of Favorable Measures and Policies of the Government for Opening Companies Locally and Hiring Local Employees

Incentive Policies

Local Employment Protection Policy

The Spanish Workers’ Statute (Estatuto de los Trabajadores) stipulates that when companies lay off employees, they must give priority to retaining Spanish or EU – nationality employees.

Quota Ratio for Foreign Employees

There are no special restrictions.

VI. Human Resources Analysis and Employment Suggestions

Employment Figures

As of February 2025, the number of employed people in Spain reached 21.196 million (a record high for the same period). Among them, female employment exceeded 10.02 million for the first time, accounting for 47.3%.
Data link: https://zh.tradingeconomics.com/spain/unemployment – rate

Unemployment Rate

In the fourth quarter of 2024, the unemployment rate in Spain dropped to 10.61%, lower than 11.21% in the previous quarter.

VII. Cultural Adaptation

Language

The official language of Spain is Spanish, and English is also quite popular.

Religious Customs

Catholicism has a profound influence (80% of the population). Avoid scheduling important meetings during Holy Week (Semana Santa) or Christmas.
The siesta culture still exists in small and medium – sized cities (some shops are closed from 14:00 to 17:00).

Business Culture

• Relationship comes first: Initial meetings often start with coffee or lunch, and business is discussed after building trust.
• Flexible time: It is common to be 15 – 30 minutes late for meetings, but international companies need to be punctual.
• Negotiation style: Indirect communication, avoid direct rejection (commonly use “Es complicado” to decline).