Spain has a well-developed system of statutory employee protections, and if you’re hiring Spanish employees for the first time, the rules around leave, benefits, and pay can feel unfamiliar. This guide walks through the key obligations so you can manage your Spanish workforce compliantly, from annual leave minimums to Social Security contributions and the supplementary benefits that employees commonly expect.
Annual leave and public holidays
Spain’s leave entitlements sit above the EU minimum, and the rules around scheduling and carry-over are stricter than many employers expect.
Statutory annual leave
Every employee in Spain is entitled to at least 30 calendar days of paid annual leave per year, which works out to roughly 22 working days. Leave is pro-rated in the first year of employment based on time worked.
One important rule to flag: annual leave can’t be replaced with a cash payment while the employment relationship is active. The only time you can pay out untaken leave instead of allowing the employee to take it is on termination. During employment, employees must take their leave.
Collective agreements in many sectors extend annual leave beyond the statutory minimum, so it’s worth checking whether a relevant agreement applies to your employees.
Public holidays
Employees in Spain are entitled to up to 14 paid public holidays per year. Eight of these are national holidays that apply across the whole country. The remaining six vary by autonomous community and, in some cases, by municipality. The exact number of regional and local holidays an employee receives depends on where they’re based, so your Spanish employees in Madrid won’t necessarily have the same public holiday calendar as those in Barcelona or Seville.
Sick leave
Spain’s sick leave system, known as incapacidad temporal (IT), is funded through Social Security contributions, but the payment responsibility shifts between employer and Social Security depending on how long the employee has been absent.
How the payment structure works
The cost of sick leave is shared between the employer and Social Security, but not from day one:
- Days 1 to 3: These days are typically unpaid at the statutory level. Some employers cover them voluntarily or are required to under a collective agreement, but there’s no universal statutory obligation to pay.
- Days 4 to 20: The employee receives 60% of their regulatory base salary. The employer makes the payment, but Social Security reimburses the employer from day 4 onwards.
- Day 21 onwards: Payment increases to 75% of the regulatory base salary and is paid directly by Social Security.
The regulatory base salary is calculated from the employee’s Social Security contribution base in the month prior to the sick leave, so the exact amount will vary by employee. Many collective agreements improve on these statutory minimums, either by topping up the percentage or by covering the first three days.
Parental leave
Spain has significantly reformed its parental leave system in recent years, moving toward full parity between birth parents, and the current framework is straightforward to administer once you understand the mechanics.
How parental leave works
Each parent is entitled to 16 weeks of fully paid leave, regardless of whether the leave is for birth, adoption, or foster care. This applies to both parents equally.
The structure is as follows: the first 6 weeks must be taken immediately after the birth or adoption and are mandatory. The remaining 10 weeks are flexible and can be taken at any point within the first year of the child’s life. Parents can choose to take those 10 weeks in a single block, in separate weeks, or part-time, subject to giving reasonable notice.
Leave is extended in cases of multiple births, adoption of multiple children, or where the child has a disability.
A key practical point for employers: Social Security funds and pays the benefit directly. It doesn’t come out of your payroll budget. However, you’re responsible for initiating the process on behalf of the employee by applying for the benefit through Social Security. Failing to do this promptly can delay payment to the employee, so make sure your HR processes cover this step.
Other statutory leave entitlements
Beyond annual leave and parental leave, Spanish law grants employees the right to paid time off for a range of personal circumstances.
- Marriage: 15 calendar days of paid leave.
- Bereavement: 2 to 4 calendar days for the serious illness or death of a close family member. The number of days depends on whether travel is required. Note that a legislative reform currently progressing through parliament would extend bereavement leave to 10 working days once finalised. As of 2026, the final text hasn’t been enacted, so employers should monitor this development.
- Moving house: 1 paid day.
- Breastfeeding: Employees who are breastfeeding are entitled to 1 hour per day away from work until the child reaches 9 months. This hour can be split into two 30-minute breaks. Alternatively, the employee can choose to accumulate the entitlement and take it as a continuous block of days at the end of maternity leave.
Collective agreements frequently expand on these entitlements, particularly for bereavement and family care leave.
Mandatory pay elements
13Th and 14th month payments
Spain requires employers to pay two additional monthly salary payments per year, commonly called the summer bonus (paga de verano) and the Christmas bonus (paga de navidad). These are mandatory and are in addition to the employee’s regular monthly salary.
By default, these bonuses are paid in July and December respectively, but the timing and amount are often governed by the applicable collective agreement. If you and the employee agree in writing, these payments can be prorated and spread across 12 monthly instalments instead of paid as two lump sums. This is common in practice and makes payroll easier to plan.
Social security and employee protections
What social security covers
Both employers and employees contribute to Spain’s Social Security system. For employees, these contributions fund access to healthcare, the public pension, and maternity and paternity benefits, among other contingencies. The system covers both common contingencies (illness, maternity, pension) and occupational contingencies (workplace accidents and occupational disease).
One protection worth knowing about is FOGASA (Fondo de Garantía Salarial), a state fund that guarantees payment of wages and statutory severance if an employer becomes insolvent. Employees don’t need to do anything to access this protection; it’s built into the Social Security framework.
Private health insurance
Private health insurance isn’t a legal requirement in Spain, but it’s a widely expected benefit, particularly in professional and tech sectors. Many employers offer it as part of their total compensation package.
From a tax perspective, private health insurance premiums are deductible for the employer and, for the employee, are exempt from personal income tax up to €500 per year per person (or €1,500 per year for employees with disabilities). This makes it one of the more tax-efficient benefits you can offer Spanish employees.
Occupational pension plans
Spain doesn’t have a mandatory private pension system. Retirement income is provided through the public pension, which employees accumulate through their Social Security contributions over their working life. Occupational pension plans, where an employer contributes to a private pension scheme on the employee’s behalf, do exist but aren’t legally required. Some employers in competitive sectors offer them as part of a benefits package, but you’re not obligated to do so.
Working with an EOR in spain
If you’re hiring in Spain without a local legal entity, one practical route is to work with an Employer of Record (EOR). An EOR becomes the legal employer of your Spanish staff, handling payroll, Social Security registration, leave administration, and compliance with the applicable collective agreement. This removes the need to set up a Spanish subsidiary before you can make your first hire.
When evaluating EOR services, it’s worth looking at how the provider handles parental leave processing with Social Security, collective agreement compliance, and the speed of onboarding.
FAQ
Do I have to pay employees during the first three days of sick leave in Spain?
Not under the base statutory rules. Days 1 to 3 of sick leave are typically unpaid at the legal minimum. However, many collective agreements require the employer to cover these days, and some employers do so voluntarily. It’s worth checking the collective agreement that applies to your employees before assuming these days are always unpaid.
Can Spanish employees carry over unused annual leave to the next year?
Spanish law doesn’t provide a general right to carry over annual leave, and unused leave can’t be replaced with pay during employment. However, there are exceptions where leave couldn’t be taken due to incapacity or maternity or paternity leave. In those cases, the employee retains the right to take the leave after returning. Some collective agreements include carry-over provisions, so the rules may vary depending on the sector.
Are the 13th and 14th month payments separate from salary or included in it?
They’re in addition to the employee’s regular monthly salary, not included within it. A Spanish employee on a given annual salary expects to receive that salary across 14 payments, not 12. If the contract states an annual salary without specifying whether the bonuses are included or extra, Spanish courts will typically interpret this in the employee’s favour. Make sure your contracts are explicit on this point.
Does the 16-week parental leave apply to both parents equally?
Yes. Since Spain’s 2021 reforms, both parents are entitled to 16 weeks of fully paid leave on equal terms, regardless of gender or how the family was formed (birth, adoption, or foster care). The benefit is paid by Social Security, not by the employer, though the employer must apply on the employee’s behalf. The first 6 weeks are mandatory and must be taken immediately; the remaining 10 weeks can be used flexibly within the child’s first year.
